Mobile’s Dirty Little Secret: The Threat Of Network Overload

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Mobile’s Dirty Little Secret: The Threat Of Network Overload

It isn’t talked about much in the industry, but there is a serious downside to mobile data really taking off. If subscribers start embracing messaging, streaming video and Web browsing on cellphones, it will overload wireless networks. In a blog post today, Michael Mace, an industry consultant and former Chief Competitive Officer and VP of Product Planning at Palm (NSDQ: PALM), addresses the issue head-on. He writes: “It’s very hard to confirm exactly what mobile data is doing to the networks because the operators don’t like to discuss this sort of thing in public. But the number of data-capable phones is definitely growing faster than network capacity, so overload is just a matter of time. I’ve gotten several off-the-record comments from friends in the industry saying that the operators are worried about the problem and are quietly trying to throttle traffic, especially to online multimedia services that consume a lot of bandwidth.”

Mace dug up an old statistic from 2005, which predicted that the typical 3G network would be overloaded if only 40 percent of subscribers used video just eight minutes a day. I suppose the networks can say they are thankful that watching TV hasn’t taken off as anticipated because the same report suggested networks would be clogged in 2007.

The big question is what can be done about this?

More after the jump

In order to provide more bandwidth, a carrier needs better technology (4G), more spectrum, or a denser network in which each cell tower serves fewer people—all of those options are expensive. Mace doesn’t address any of those, and instead is a bit more practical about what can be done immediately. His first suggestion, which is does not really recommend, is to throttle back the usage by those who are using the network too much. A recent example of this was when T-Mobile USA started selling the G1. In the fine print, it said that data consumption would be limited to 1 gigabyte, and then usage would be throttled back. There was an immediate backlash by consumers, who claimed that a data-driven device like the G1, shouldn’t have a data cap. The next day, T-Mobile lifted the cap and said it was reviewing its policies. Mace advises against this approach: “The most damaging approach is that one that operators seem to be leaning toward now, covertly throttling traffic. They can probably get away with that for a while, but eventually people online will compare notes, figure out that network performance is being systematically distorted—and then the class-action lawyers (in the US) and government regulators (in Europe) will be unleashed.” Instead, he says honesty is the best policy, and that carriers should not try to advertise their networks as comparable to wired networks, and instead offer two-tiered pricing based on usage.

But are there other options worth exploring? What about compression technologies? Or what about alternatives to streaming video to the phone? For instance, Qualcomm’s MediaFLO technology uses broadcast technology to deliver TV to the phone. Likewise, with the switch to digital TV, broadcasters are looking at delivering TV to the phone, as well, which wouldn’t clog up the wireless network. But perhaps these solutions aren’t perfect either. The technologies provide live TV, rather than streaming TV, so users don’t have the choice of watching something when they want to. Of course, a lot of 4G proponents, such as Clearwire (NSDQ: CLWR) and Sprint (NYSE: S), are calling LTE and WiMax as the technology solution for the mobile Internet. However, the carriers will still have to have the spectrum to support it.

Tricia Duryee

@triciad Dec 8, 2008 12:51 PM ET

Posted In: Entertainment, Gaming, Music, Social Media, Video, Technologies / Formats, 3G, Broadband, WiMax, Companies, T-Mobile

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Gary

As an ex telco guy, I can confirm it's a potential issue, however despite what the network engineers and architects will tell you in 10 years in this industry I've never seen data use collapse a network. What is more distressing for a content provider (or even a content manager within a telco) is the lack of stability in vending platforms and robust consistent billing.

Networks are built to "gold" standard and rarely break, content infrastracture and billing is built as cheaply as possible and often consists of unsupported hardware and software sitting under someones desk and it's no longer acceptable.

Shawn Kahandaliyanage

Dirty little secret indeed! Mobile data industry insiders have known this for a while, but somehow it is rarely addressed in the technology press. So bravo. The bottom line is that short of any quantum leaps in physics, the only way carriers can increase total available network capacity in a big way is to build more towers, buy more spectrum, or both. Either way, it will require substantial capital expenditure that few can afford. WiMax/LTE will improve the situation incrementally, but it’s not the game-changer that it’s touted to be because it’s simply not orders of magnitude more efficient than current 3G technologies (technically, we’re quickly converging on the Shannon freq, so we can’t count on next-gen protocols to deliver orders more capacity). And there’s salt in the wound: carrier terrestrial networks (the one that connects the base stations together), are also approaching their limits. So the carriers will have to start dragging more fiber, which adds to the cap ex (Sprint is already starting to face this in conjunction with their WiMax deployment).

So the economics is pretty simple. Demand for mobile data is going to vastly outstrip supply, therefore prices will remain high and may even rise. Any data-heavy mobile service must factor this reality into both their technical and business models. We’re taking an alternative approach with our mobile video service called Poptiq. We do asynchronous background loading of video over WiFi to the user’s phone based on what we know about their viewing preferences (what topics/shows they like watching, etc). The result is a superior viewing experience for the user (higher quality video and no dealing with network buffering/dropouts) delivered at a much lower cost basis. We think this is the right equation, but no doubt there are other alternatives as well.

Cheers, Shawn

Jamie Poitra

I suspect compression already happens in one level or another. Its certainly already happening on the web browser end of things. Most websites now transmit data from the server to the browser after it has been gzip compressed by the server. This results in a smaller amount of data being sent for a given webpage. The ContentNext sites themselves do this.

But the efficiency or inefficiencies of the network protocol has a lot to do with network saturation as well. TCP/IP which most of the internet is based off can be pretty verbose at times which results in more traffic for a given request than is maybe necessary. But changing from TCP/IP to something else has pretty big ramifications and probably isn't going to happen anytime. So the general solution is ever bigger amounts of bandwidth to push the data through which is an infrastructure issue.

Add to that the various protocols for sending data via a radio that sit on top of the base TCP/IP protocol, AND the issues involved with the various possible frequencies of radio signal and there's a lot of stuff to deal with. I don't envy the guys and girls who get to try and figure out how to continually improve this area of technology.