The road to ubiquitous wireless broadband - or something close to ubiquitous - is fraught with challenges. One of them, of course, has been finding a sure-fire way to convince people to use it as a supplement to, or extension of, or possibly even substitution for their fixed broadband activities.
Another challenge has been the fear that they might actually do that.
Consider this case study spotted on the blog of British comic book and science fiction writer Warren Ellis. Mr Ellis found himself without a DSL modem and temporarily replaced it with an HSDPA USB modem from 3 UK to keep up with his online activities. One of the drawbacks of this arrangement, he noted, was 3's 7-GB monthly bandwidth cap.
'On a normal day, I'd grab a TV program-, an album's worth of music - and that's getting on for a gig's worth of material right there - spend an hour on Bloglines getting up to speed with the world, which usually involves watching more video and streaming more audio, move a LOT of email with images and documents, watch a handful of online communities, do research,' he reported. 'And before you know it, rough calculations start reaching the 3-GB/day level.'
There's a couple of interesting takeaways for anyone in the wireless business. One: when fixed-line fails, people will turn to wireless to pick up the slack. Two: when they do, they are going to have preconceived expectations about what they can do with it and how much of it they can do.
Granted, Mr Ellis may fit the profile of 'early adopter/heavy user' rather than the average 3G user. A survey from iPass, released last month, that measures both enterprise Wi-Fi usage and 3G broadband usage, found that users who exceed 2-GB of usage a month account for less than half a percent of the sampled user base. On average, by Q4 2007, wireless broadband usage worked out to just 190-MB per user per month, iPass says - well within the limits of a 7-GB cap. And most of those users were using wireless as a convenient quick-access option, not emergency DSL replacement.
That said, the type of data usage that Mr Ellis describes is the kind that wireless broadband vendors and operators wax lyrical about when they talk about 4G - real internet access, not walled-garden portal sites offering ringtones and news snippets. In which case, monthly data caps start looking like a barrier.
To be sure, usage caps are becoming increasingly commonplace. Fixed-line broadband providers utilize them in the name of fighting P2P users eating up their bandwidth. In the mobile world, data volumes already exceed voice on hundreds of mobile networks, and now that HSPA and EV-DO have really spurred things along, the traffic growth is in danger of overwhelming backhaul links.
But users don't think in those terms, which is why flat rates ultimately generate more business than per-KB pricing. Indeed, the more you look at the future evolution of wireless, with WWANs, WLANs and WPANs connecting billions of devices moving all kinds of IP data, including legit commercial multimedia, usage caps are counterintuitive. Customers would use the service less, not more. It makes more sense to build out capacity to deal with the bandwidth hogs than to impose limits on everyone.
Yes, I know, easier said than done. But it has to be done sooner or later. And enforcing usage caps comes with its own price tag, such as installing the equipment necessary to track usage, billing system upgrades, and extra call center expenses from all the customers who don't understand how metered usage works.
In any case, it will be interesting to see how mobile Wimax players now rolling out services handle this. They have traffic management issues like everyone else, but unlike cellular, they're built for IP, and flat rates will be a tempting market differentiator. We'll see how sustainable that business model is, but it's hard to imagine an all-IP wireless broadband world flourishing when operators are limiting how much of their service anyone can use.