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The blogosphere has been abuzz since last week about Comcast’s (CMCSA) new policy limiting the amount subscribers can download. Starting October 1st, Comcast will limit users to 250 GB of total downloads per month. Violators will first get a warning if they exceed the cap. A second “offense” within 6 months will risk loss of service for a year.

I continue to be amazed at the ISP business. The telecablecos are the only companies I know that limit the use of what they provide, instead of selling you more of it. As I wrote some months ago, the reason is largely due to the fiction of unlimited usage banging up against the reality of limited network design and oversubscription models.

I could rail at how unfair Comcast is being, or how out of touch they are with Internet users, or how ridiculous it is to punish people for exceeding usage limits they can’t measure. But I’ll leave that to other, better minds.

Instead, I’ll point out how Comcast isn’t even solving the right problem. The trouble with its network isn’t so much capacity in bytes. It’s peak speed.

[Let's ignore for the moment that the Internet is a two-way connection mechanism, and think like a telecableco, where the purpose of ISPs is to shove stuff downstream to you. We know different, but bear with me here.]

Ever take a shower at the same time as someone else in your house? What was the result? Yup, low water pressure, and a singularly annoying experience. Now imagine that on a neighborhood scale. Five people on your street decide to get clean at the same time and all you get is a dribble out of the shower head.

So what’s the solution? Well if you’re Comcast, you limit the size of the swimming pool your subscribers can have. Huh?

How many bytes you download is much less important than when you download them. If a thousand people try to stream a movie (shower) at the same time, they only use up 5 GB or so, but the experience sucks, because the speed (water pressure) is reduced for all. Conversely, download 250 GB (fill your pool) overnight when hardly anyone else is online, and you not only get a fast download but you don’t bother others.

Instead of limiting bytes–a poor proxy for usage–Comcast might be better served by limiting speed. Then they’d be in a position to charge different prices for different speed tiers. This would be relatively easy to do by capping modem speeds, would allow more accurate network capacity planning, and would solve the actual problem, namely congestion at busy times.

In other words, charge for water pressure (or size of water pipe), not the amount of water you use. If you want better pressure, pay extra. An alternative would be time-of-day charging, like traffic on interstates, bridge tolls, and electricity usage. (I suspect that would get too complicated for consumers, but you never know.)

Honestly, Comcast isn’t dumb. So why are they capping total bytes? Two explanations spring to mind, both only small contributors in my view:

  1. It’s easier to simply monitor total usage and kick people off. (Admittedly, most subs won’t run afoul of the new limits any time soon.)
  2. They’re clinging desperately to the fixed price, all you can eat model of bandwidth, and are loathe to change it unless their competitors do (that assumes they have competitors, of course).

But the real reason is that Comcast and their ilk want to be in the water business, not the pipe business.

Anybody think that the new usage caps won’t apply if the content you’re downloading comes from Comcast? Like, say with the new Network DVR service some of the telecablecos are itching to charge you for? You bet.

I have no doubt that if Comcast provided most of the video and other content you consume over its connections, their congestion problems would magically disappear. They’d probably even be advising you to build a bigger swimming pool.

And reminding you to fill ‘er up.

Disclosure: I hold no position in any of the stocks mentioned here.

Source: Comcast Limits User Downloads: Wrong Solution