The real cost of P2P

Should you read slashdot, you must have already seen its readers complaining about their ISP traffic shaping policies. When working in the ISP industry it is painful to see the lack of understanding those ‘techies’ are displaying.

In the UK, if anything ISPs are guilty of bad advertising misleading customers with ‘up to’ speeds and obscure fair usage policies and trying to market their product on price instead of quality (but Internet is a commodity market nowdays, so it is to be expected)

Customers should be clearly told that DSL product sold are contended. Previously dialup products were as well, but the impact with dialup was much more noticeable with the inability to get online.

The recent increase in content (video even more than P2P) has recently caused many of them to realise that they had oversubscribed their infrastructure to the point they could not deliver to their customers what they came to expect.

Once down to the wall, ISPs had only a few options :

  • raise price to reflect the cost of running the service at a low contention (and we all know that it is impossible)
  • apply traffic policing globally (everyone is slowed down the same way to modem speed).
  • apply targeted traffic policy (P2P users here you are)

As it is hard to tell a customer, who may cancel its contract returning a then useless free router, that he can no longer have fast email and web surfing, the path of least resistance is to throttle P2P traffic which is an important part (but not all) of an ISP traffic, freeing capacity for other services and allowing to delay infrastructure upgrade. (The cost of implementing traffic shaping is recovered if it allows to delay a network upgrade if only for a month!)

For information, an ISP for a DSL service can be simplified as:

  • the ‘last mile’ cost from the home to the exchange
  • the cost of the space used, power consumed and hardware located at the exchange
  • the cost of moving the traffic within the country (fiber, etc.)
  • the cost of the space used, power consumed and hardware located at national point of presence
  • the cost of moving the traffic to other ISPs
  • the cost of supporting the customer (ie: taking unrelated calls about their virus or other issues)
  • the cost of collection the client payment
  • all other generic business

For quite few small/medium ISPs, the transit cost (the cost an ISP will pay for another bigger ISP to take its traffic somewhere worldwide) is more than the income that the customer provides. Most ISPs are making a loss trying to become big enough to be acquired.

P2P being notably known to not really care about locality, one can see why it is the target of shaping (with the fact that the biggest torrent are often providing copyrighted material for which end users may or may not have a license to see/use).

In that context it is not surprising that the industry is facing issues and trying to find more income streams (see my rant on Phorm).

Thomas Mangin
Technology Enthusiast