TL;DR: Bandwidth Caps are a joke.
When you were younger, your dad gave you a nice old car. Got decent mileage, nothing amazing, and it got you from point A to point B. One day you get a letter from the dealership promising you a great Trade-in on the latest sports car. All the salesman talks about the entire time is how fast this car is and how sexy you’re going to look driving it. After you sign, you take this car home, you show it off to your friends, you’re feeling great but when you go to drive it, you realize that this sexy sports car only has a one gallon gas tank. Pissed off, you go back to the dealership to ask the Salesman what’s up, and he politely tells you that you’re simply driving too much because there isn’t enough gas to go around.
It sounds crazy, but that’s exactly what’s happening in Wireless communications right now. AT&T has gotten much more aggressive about throttling heavy data users, the practice of dramatically reducing a users connection speed if they abuse the network. The only problem is that at the same time they’re dramatically increasing the throughput, they’re also dramatically decreasing the amount of bandwidth you can use.
This is antithetical to innovation for a number of reasons, the primary one being that the cost of routing data over these networks is actually decreasing over time. As with any technology, over time, the cost of administrating networks decreases with innovation.
At the core of the carrier network are large switches, massive beasts of iron that are designed to deal with tremendous amounts of traffic (things like the CRS-3 from Cisco which can move the Entire library of congress every second). At the edge of the network, AT&T is employing LTE as its wireless standard which allows them to ship more data, faster to more users than their previous technologies.
Let’s do some quick math: for the sake of argument let’s assume that 40M of AT&T’s 100M customers are using iPhones. The cutoff point of the recent AT&T throttling attempts has been about 2GB/month. If every user hit that threshold (which they don’t) AT&T would be dealing with 80M GB of data every month. On an hourly basis that breaks down to 111,000 GB. Granted, some hours have higher usage than others, but 111,000 GB is not a lot of data for a nationwide carrier to address in an hour, or 1.8 Terabytes per second. The CRS-3 from Cisco is designed to handle 322 Terabits per second, which is more than enough to deal with this traffic. At the edge of the network, AT&T has 260 million points of presence (POPs). Each POP has a number of T1′s in the base that provide backhaul, and right now, that’s the choke point. Again, it’s not the center of the network; there’s more than enough capacity there. The bottleneck is at the edge in the cell towers, but it’s worth discussing how those bottlenecks got there.
The real limitation with LTE is the backhaul that’s running into the bottom of the CellPhone towers, and that my friends is the Crux of the issue. The biggest problem I have with how AT&T is behaving has to do with the nature of the outcry. How can the world’s largest bandwidth company, that provides Dense Wideband Division Multiplexing at Astronomical speeds between datacenters NOT provide bandwidth to its cellphone towers? How can a bandwidth company have a bandwidth shortage?
The answer is so obvious but so surprising that its actually difficult to stomach. AT&T is hardly the only carrier performing throttling, but this throttling is an excuse to delay upgrading the network to meet the demands of the users. It is clear that AT&T could alleviate the network issues that they’re having through strategic investments and would simply rather throttle users to increase the return on their investment. This is an extremely profitable short term strategy, but it is a recipe for disaster long term. AT&T actually profits more when people use their equipment than when they don’t. This push away from unlimited data and towards buckets of data is nothing but naked greed.
In summary: AT&T and other carrier throttling has little to do with their actual network capabilities and much more to do with maximizing the profitability of the infrastructure that’s already in the ground. And who can blame them?
This is exactly how our Telecom world is supposed to function according to the FCC.
(I have purposely tried to avoid the issue of Spectrum in this post, but I believe that Spectrum is not the limiting factor in wireless network architecture).