Researchers looking at coming ‘crisis’ in data congestion expect usage-based pricing

Industry experts researching business and technical solutions to “an approaching crisis” in data congestion say usage-based pricing may become the norm. Last month, experts gathered in Cape Town, South Africa, for the Institute of Electrical and Electronics Engineers (IEEE) International Conference on Communications (ICC) to discuss how the telecommunications industry can cope with what they say are exponential levels of growth in data usage on mobile and fixed networks. “We are already in a state of crisis. Some people don’t know this, and others do know it but try to ignore it,” Reinaldo Valenzuela, director of wireless research at Bell Labs at Alcatel-Lucent, and a presenter at the ICC, said in a phone interview. “If indeed data were to continue to grow along the trends that some people are predicting, the costs will also grow at some fraction of that rate, but revenue will not because people pay a flat amount per month.” Telecom companies are in an increasingly uncomfortable business position, Valenzuela said. As the cost of providing high-speed data on mobile phones increases, customers remain unwilling to pay more than $50 to $70 per month on data plans. He said about two per cent of mobile phone customers use extremely large quantities of data, but pay flat rates. In the end, it costs the telcos more to provide the data than what they collect from the customer. Duncan Stewart, the technology, media and telecommunications director of research for Deloitte Canada, said there is no combination of solutions that will solve the problem posed by network congestion. “No amount of solutions will really solve this problem. The number of users and the kind of traffic they are going to be using on the network is such that network congestion isn’t going to go away even as we look at new technologies,” he said. He said the most effective solution to managing traffic is using market signals and charging consumers according to usage, followed by a move to next-generation LTE and WiMax networks. “Cellphone companies are going to signal to people how much stuff costs and manage bandwidth use by charging more. If you want to use a lot of data, you’re going to have to pay more than you do today,” Stewart said. The number of people sharing service areas, the time of day the data is downloaded, and the speed of the signal could also affect pricing, Stewart added. Valenzuela said users would very quickly adapt to new forms of usage-based pricing and data management. If it costs $100 to download a movie in the middle of the day and $1 to do the same in the middle of the night, people will be willing to change their habits, he said. Valenzuela added that another solution is to enforce different layers of latency for downloading content on mobile networks. He said equipment will evolve to further enable the differentiation between types of traffic and applications—so that time-sensitive actions can be given priority. But Ibrahim Gedeon, Telus Corp.’s chief technology officer, said charging consumers according to data usage is a “band-aid solution” to a technical problem. “If you start paying attention to like your power or water bill, then you use less. But it doesn’t fix the technology question,” he said. Still, he said usage-based pricing may be necessary. Gedeon said Canadian networks are not facing congestion right now, but it’s only a matter of time. He said Canada’s first challenge will be congestion on the “air interface,” or the link between a mobile station and an active base station. He said Telus has been looking towards using a combination of more efficient LTE and faster, next-generation WiFi technology to deal with expected congestion. Valenzuela also proposes to increase the number of base stations, so that fewer users would connect to a single station at the same time. “It’s an extremely effective . You are not increasing the throughout per base station, but you’re increasing the throughput per square kilometer. But it’s at the cost for the service provider to build the base stations,” he said. Valenzuela said research is also being conducted to enable users between two base stations to share the signal—instead of the existing system of receiving one signal while removing the other to cancel out interference. Steven D. Gray, vice president corporate research at Huawei Technologies and a presenter at the ICC last month, said telcos need to focus on increasing revenue while reducing capital and operational expenditures brought on by network growth. Gray is working on increasing the efficiency of content distribution networks (CDN)—a possible solution he says is drawing attention from several telecom companies. CDNs store copies of data at various points in a network to maximize access so that users can access copies of requested data instead of the original data, avoiding a bottleneck. “The main problem with today’s networks is that they are really not designed for being able to address multimedia traffic,” he said. Gray said video content dominates Internet traffic, which can be redirected in more efficient ways through next-generation routing, relieving congestion. But Gray cautioned that deploying next-generation routers will not be easy. “There’s a recognition that things need to be done significantly different in the future to be able to address this problem. There is no quick fix to it,” he said. kfournier@thewirereport.ca

Researchers looking at coming ‘crisis’ in data congestion expect usage-based pricing

News | June 15, 2010

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