UK DSL Networks Getting Crammed

LONDON -- DSL providers usually don't guarantee the speeds they advertise. But the ISPs here are testing their customers' patience as they try to contend with wholesale rate hikes and increased retail price competition.

Speaking of competition, the U.K. has overtaken France as Europe's largest broadband market, racking up 9.8 million broadband lines, according to Point Topic Ltd. (See UK Tops Euro Broadband.)

With demand so high, service providers are frantically trying to outdo each other by offering customers lower prices and higher bandwidths -- without upgrading the capacity of their networks to deal with all the extra traffic. The result: Users end up with contention ratios of up to 50:1 -- where every user is sharing bandwidth with up to 49 other people.

ISP PlusNet plc 's "Beginner's Guide to Contention" likens broadband users to greedy pizza eaters in a buffet -- there's only so much to go around, so users should "appreciate that bandwidth is a limited resource" and "adopt a responsible attitude." Of course, the buffet could provide more pizza.

Part of the problem is the way service providers get their pizza. When ISPs buy a pipe from BT Group plc (NYSE: BT; London: BTA), they're paying the incumbent based on the amount of capacity they use. So the temptation is to cram in as many users as possible on the same limited amount of capacity before they upgrade to a bigger pipe.

As Richard Thomas, CEO of Net Evidence (SLM) Ltd. , notes, "Providers are basing their services on things like [BT's] IPStream where the cost of the central office is huge. If you're running that, it's tempting to max out the bandwidth."

NetEvidence, which provides a network performance reporting service, monitors around 2,000 sites and is seeing disgruntled broadband users realize their connections aren't performing the way they expected.

Thomas points out that contention problems have coincided with a change in BT Wholesale's pricing model. Under the standard model, ISPs paid BT £40,000 (US$70,600) per year for a 155-Mbit/s central office, which would accomodate around 8,000 users, and then an additional fee for each ADSL line. But under the capacity-based pricing scheme introduced in 2004, the cost of the same 8,000-line central office rose to a flat rate of £316,200 ($558,157) per year, no matter how many users are actually connected -- hence the cramming.

BT also introduced a usage-based model, which works on the assumption that the average user will consume 20 kbit/s, equating to 200 megabytes per day. As the daily average has inched up to 300 and 400 megabytes, ISPs are losing more and more money on subscribers.

"Consumers will put up with a lot," Thomas says. But "the people who are downgrading from leased lines are getting fed up with it... We've watched sites where they've replaced leased line with DSL and you can see the quality drop."

Thomas says one of the biggest problems is the way ISPs are marketing their services, downplaying the limitations of the technology -- distance from the exchange, slower upstream, delay, and so forth -- to sell speed by the pound. "They're so darned cheap," he says. "They're taking a complex network and trying to sell it simply." Companies who are sold DSL as being "leased line at a fraction of the cost" are "let down when they start to see they can't run class-of-service over it."

Ethernet service providers like Exponential-e Ltd. and THUS plc (London: THUS) are going back to using E1s as backup for corporate branch offices that don't need high-speed Ethernet connections, because, although they're more expensive, they provide uncontended capacity. (See THUS Deploys Overture.) Thomas says he's seen people returning to ISDN lines because their broadband connections were unable to carry voice -- a trend that should alarm providers looking to roll out VOIP.

Some ISPs -- for example, Demon -- offer business-grade services that claim contention rates of 5:1 or 1:1. But its consumer service is contended at 50:1, and customers have responded by airing their frustration on Websites like slowdemon.co.uk. Similarly, broadband user forum ADSLguide.org shows providers like PlusNet, Tiscali SpA , Claranet Ltd. , et. al., getting the thumbs down from users.

Service providers that fare better tend to be local loop unbundlers like Easynet Ltd. that can upgrade the exchanges themselves as needed. But local loop unbundling (LLU) has been slow to take off -- there are only 122,000 unbundled lines in the U.K. -- and even then there have been hiccups.

Bulldog Communications Ltd. 's well documented problems with connectivity and customer service culminated in an investigaton by industry regulator Ofcom ; and LLU provider Be Un Limited , which began trialing 24-Mbit/s ADSL2+ services in September, has also been having a hard time with its customers.

"We definitely had some issues early on in terms of making sure we had all the right pieces in place," says Dana Pressman, Be's managing director. The provider was unprepared for the amount of bandwidth customers would be consuming and decided to pull back its marketing efforts to concentrate on getting the service up and running.

"We've been seeing a much higher usage than what we would've anticipated based on our projections and talking to other service providers," says Pressman. "We're seeing about four times what we expected."

The growth of high-bandwidth applications has exacerbated the capacity problem. "Once you start to introduce applications like games and VOIP, which aren't bursty, it changes the nature of the traffic," says Thomas at NetEvidence. ISPs have attempted to rein in bandwidth by capping monthly usage, but the nature of applications themselves has changed. No longer are users just surfing the Web and checking email; they're running always-on applications: streaming audio/video, VOIP, gaming, file sharing... the list goes on.

Point Topic expects 2006 to the year of local loop unbundling in the U.K., and BT has recently cut its LLU rates to stimulate competition, so users will be looking to the new infrastructure to clear the traffic problem in the coming months. (See BT Cuts LLU Prices.)

— Nicole Willing, Reporter, Light Reading

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materialgirl 12/5/2012 | 4:09:42 AM
re: UK DSL Networks Getting Crammed Dear Seven:
I hear your message, BUT, the earlier 155Mbps connection was for some $70k/yr plus an unknown per user fee. This jumped to some $550k/yr. You can drive a truck through that difference. Without knowing that per user fee, it seems as though the "new" network could theoretically charge 2-3x what the original network did, and still undercut the new scheme by 2x. That should be a business.
yarwell 12/5/2012 | 4:09:47 AM
re: UK DSL Networks Getting Crammed you probably have a point. Providing untold riches of bandwidth worked fine while the pipes were empty but the huge growth in subscriber numbers has not been matched by an increase in capacity.

BT's CBC scheme shifted the charging from being based on the end user link capacity to a flat rate user link. This means it now only costs about -ú8 to connect a consumer at 2M rather than about -ú40 - hence the retail products at -ú15-25 for 2M.

The standard charging regime, which is still available, is uncompetitive at higher speeds.

We should also remember that the regulator OFCOM has pegged BT's IPStream prices up at a certain level to allow LLU to grow to a stated target of 1M lines. Those of us without LLU operators on our exchanges (ie 4500 of the 5500 ADSL exchanges) get to pay consequently more for IPStream and have no LLU competition from which to benefit.
paolo.franzoi 12/5/2012 | 4:09:51 AM
re: UK DSL Networks Getting Crammed

The reason is pretty straightforward. If you spend a lot of money to build a network to lower the price of an existing service, then the returns are horrible. Not only will you not get back the money you spent, the incumbent (who has now recovered all of his costs) will just lower their prices.

materialgirl 12/5/2012 | 4:09:51 AM
re: UK DSL Networks Getting Crammed Dear Steve,
Thank you for the info. What I do not get is this: BT jacks their 155Mbps rates from $70k/yr plus a per user fee, to a $558k/yr flat fee for 800 users, and we do not get an onrush of gold seekers trying to undercut this sudden, anti-Moore's law 8x fee increase. Users want it, ISPs want to keep uers and make money, a huge arbitrage seems to exist, and we have no takers. Am I missing something?
Petabit 12/5/2012 | 4:09:53 AM
re: UK DSL Networks Getting Crammed A good point. That probably goes towards explaining the high upload figures, but it doesn't explain the high download figures.

What I don't get is, if your contract specifies 50:1, why are you complaining when you get 50:1?

jmbieee 12/5/2012 | 4:09:53 AM
re: UK DSL Networks Getting Crammed I think that the Next Generation Network needs a new Reference Model, like the proposal described in the paper:


We can take as a reference the strategy utilized by virtual circuit networks: when the X.25 protocol at layer 3 made it technically impossible to increase the network speed, the switching had to be done at layer 2 with Frame Relay and later at layer 1 with ATM.
Petabit 12/5/2012 | 4:09:53 AM
re: UK DSL Networks Getting Crammed Oooo a scare story about how contention rates are rising in the UK ADSL network. Which would be interesting if it were in any way true.

The original ADSL platform as rolled out by BT used a fixed 50:1 contention ratio for residential services at the DSLAM - the cards offered 200 512k connections on the front, and had a 2M connection at the back. BT would add a second card if the first one got over 75% full, so residential users would never really see much above 30:1 contention.

The newer generations of DSLAMs allow much more flexible settings for contention ratios, and so BT allowed the ISP to control the ratio of access bandwidth to ATM backhaul pipe size. The ISP can buy whatever size of backhaul pipe they like, and then contend it how they like. Most ISPs have stuck to about 50:1 for residential and 20:1 for business users. Plus.net were one of the frist ISPs to offer lower contention rates last year, and at the time it was pointed out that it was going to lead to problems managing their customer expectations.

No, the real problem with the UK ADSL network is the rise in peer to peer traffic especially BitTorrent. Plus.net publish their bandwidth statistics (http://portal.plus.net/support... and they are well worth studying. Note that on their all-you-can-eat tarrif (Premier) the traffic bare drops at night. Think about it, who is heavily using their network connections at 4 in the morning? In the vast majority of cases the owner is asleep. Add to that piece of data the statement by Plus.net that the top 2% of their users use 60% of the network bandwidth. And that those 2% are using (on average) 130GB a month - that corresponds to an constant load of 400kb/s. How on earth do you average 400k a second, averaged over 24 hours if you aren't running BitTorrent.

kentishman 12/5/2012 | 4:09:53 AM
re: UK DSL Networks Getting Crammed I wonder how much of the 4 a.m traffic originates from Spammers? The number of Hijacked computers is quite amazing in my experience. Recently a friend of mine who I built a computer for 2 years ago told me he upgraded to Tiscali broadband 6 months previously and for the past couple of months his internet connection had been little to non existent.

I agreed to investigate the prroblems and it quickly became clear that his computer had been Hijacked and it had one of those nasty rootkit Hijacks running on it. Fortunately I managed to install the Microsoft Antispyware program and this removed the problem. This situation seems a common problem from my experience people upgrade to Broadband but do not put in place the security needed to keep out the spammers.

stephencooke 12/5/2012 | 4:09:55 AM
re: UK DSL Networks Getting Crammed Materialgirl:
"So exactly where is the choke-point? Somewhere around where 155Mbps lines go into COs, but where? Does this mean a market exists that is not being addressed?"

My understanding of the UK's CO's (called "Exchanges") is that it is entirely copper on the access side with fiber coming out the back (ie: towards the network). It seems that what BT is offering ISPs is a bandwidth-capped STM-1/STS-3. Increasing the bandwidth available to the ISP is what BT sells (eg: an STM-4/OC-12 linecard). I don't see any technical reason mentioned for not having additional bandwidth available. It seems purely economic (ie: the ISP can get more, they just have to pay for it).

I am sure 21CN will make these things easier to deal with from BT's point of view later on. The issue I see is that, if businesses want to stay on leased lines, E1's, E3's, etc. that the OPEX business case that 21CN is based on may have trouble delivering in the timeframes that they have predicted.

materialgirl 12/5/2012 | 4:09:55 AM
re: UK DSL Networks Getting Crammed So exactly where is the choke-point? Somewhere around where 155Mbps lines go into COs, but where? Does this mean a market exists that is not being addressed?

With so many telecom service competitors in the U.K., it seems odd that such a lack of capacity exists. If customers want more capacity, is there no money in a business to provide it? Why does everyone just rely on BT? Do we have access networks, nationwide backbone networks, and no metro networks in between?
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