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What happens when capacity is filled?

July 23, 2012

As the turn of the millennia fell upon us and the country was obsessed with the Information Superhighway, a massive amount of broadband capacity was built. Tech and Telecomm exceeded 25% of the market cap weighting of the S&P500. Today with new technologies and new hardware connections, we are no longer in a glut of capacity for connectivity. Today there is a need to begin rationing access through price manipulation.

Today’s chart shows the cumulative distribution of broadband traffic per user in the U.S. in April 2012, by broadband technology.

With growing adoption of online video streaming, the data demand of U.S. consumers continues to increase at a rapid pace. According to “Measuring Broadband America”, a study recently published by the FCC, the median monthly data consumption per broadband subscriber ranges from 12 GB (DSL) to more than 28 GB (Cable). In other words: every second broadband cable subscriber uses AT LEAST 28 GB per month. That is a lot of traffic to handle for internet service providers and as the report shows the ever-growing hunger for data is starting to affect performance: In peak hours (between 8pm and 10pm) download speeds across all ISPs dipped in what can be described as an internet traffic jam. Some ISPs, such as Comcast, are now starting to scrap unlimited data plans and return to usage-based billing.




From → business, Strategy

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