Data Crunch Crisis

I was reading an article in Slashdot today that got me thinking. I remember seeing an article about how Netflix represent 1/3 of network bandwidth in North America. Working for a media company that is both a content provider and Internet service provider, it is challenge to balance the problem, and I think it is only to get worse. There is a looming bandwidth crisis on top of competitive pressures that are going to put a huge wedge between certain commercial entities trying to get to the consumer.

A lot of the net neutrality discussion along with the use of packet shaping is less about “fairness” and more about who is going to pay. On the one side you have content suppliers becoming more and more innovative. YouTube offering 4K video, Netflix dominating the market, etc. and “new” ideas about your content available anywhere with cloud enabled platforms and applications. They are pushing the envelope on high bandwidth data, assuming if their data centres can push it, consumers will have access to it.

Now on the other side you have the service providers. With current levels of broadband reaching a market parity on price, providers cannot pass on additional costs to their customers for fear of losing their customer base. They seek to recover those costs elsewhere, ergo their argument for net neutrality.

My question is, will it all come crashing down? Will the market find an equilibrium, like it normally does, before a disaster? I don’t think though that companies who core business is an ISP will survive long. Companies will need to subsidise their consumer connectivity one way or another, because people will not pay the direct cost. They will, like with a lot of discretionary income, simply choose alternatives. Even then there are parallels to other core services. Who pays, upfront, the direct costs of their phone or electricity?

Is there a bandwidth crisis? Well, I personally believe, just like the Great Horse-Manure Crisis of 1894, that we will find a way around it, but like all these things, it will come at a cost. Some of the current organisations that are familiar to us will fall by the wayside and others will rise up to take their place. It will be an interesting landscape over the next 1-2 years I think as the reality of the increased bandwidth demand puts market pressures in places we aren’t expecting. For someone, who is innovative enough, will make a mint.