The dirty little secret in the ISP world is our ability to oversubscribe traffic on our networks. If we examine the typical WISP business model we find that quite a few concurrent users can be “pushed” down a single T1 line. If we then take into account that at no one period of the day will there ever be every single customer we have using the network we find that one T1 line (with a capacity of 1,54Mbps) can carry far more broadband users (broadband as defined by speeds of 200Kbps) than the straight math would lead you to suspect.

1554Kbps/200Kbps=7.77 concurrent users

Even if the numbers above were close to reality and we could count on a 10 to 1 over subscription rate we find that the maximum amount of customers per T1 would max out somewhere around seventy-seven! If we then assume that we are billing each customer at $39.95/month total gross revenue would come in at a little over $3K/month. Considering that in many parts of the country a T1 line is now well below $1K/month everything would look pretty rosy! Of course, there are other costs that would need to be accounted for, cost of equipment, payroll, insurance but no matter.

What happens when the oversubscription rate drops?

Two well documented trends we are seeing in the end users on-line usage is the length of time they are staying connected and the amount of bandwidth being consumed in a 24 hour period.

Among many of the contributing factors influencing bandwidth usage is streaming media as Internet radio moves into the mainstream but also as video advertisements soar to astronomical heights. Granted, the streaming music doesn’t take up an enormous amount of bandwidth even though as the push for increased quality becomes more mainstream we will see a rise in this rate, the amount of people using this technology is quickly growing. It isn’t unusual to see a large proportion of people in any given workplace using Internet radio and while each individual user is only consuming a very small amount of bandwidth relatively speaking, the entire organization is consuming a continuous stream of a 200Kbps on Internet radio traffic alone. Add VoIP calls (using a continuous stream of 100Kbps per call while rapidly being adopted by the business mainstream) along with the other day to day Internet traffic and you can easily see how a small to medium sized company will saturate a T1 line for an entire 10 to 12 hour workday.

But what happens when everyone goes home at night?

The study, conducted in partnership with Frank N. Magid Associates, surveyed 27,841 Internet aged 13 and over on 25 different publisher Web sites. It found 51 percent of respondents watch online video at least once a month; 27 percent watch Internet video at least once a week; and five percent watch it on a daily basis.

The full article this quotation is from can be found here:

This follows up on the reports that web pages themselves were becoming significantly larger in size, containing more graphics and advertisements per page which contributes to much longer load times.

I think we can clearly infer that the trend is towards using more bandwidth and using it in very different ways than we could count on in the past.

From a historical perspective we used to be able to account for a “burst and release” pattern where users might grab a web page or download a relatively speaking small file and then stop for a few minutes freeing us the portion of their connection for someone else to use. Those days are rapidly coming to a close.

What does this mean to an ISP or more importantly a WISP?

The immediate effect is that the infrastructure needs to be designed so as to make it easily scalable. This is critical to the continued growth while keeping the existing user base satisfied. The second variable is that the access point/base stations deployed MUST be able to handle a continuous stream of small packets – something that most equipment cannot handle.

Let’s take a look at some of the specifications WiMAX is planning to provide. According to this article from Daily Wireless Alvarion has officially released information about their WiMAX equipment.

As you can see from the chart below, this is going to be some pretty impressive equipment.

WiMax System Performance

Range < 4 miles 4-6 miles > 6 miles
Base-station cost (’04 pricing) $5k – $20k for WISP class $20k+ for carrier same same
CPE price < $300 same same
Adaptive modulation scheme 64 QAM 16 QAM ½ QPSK up to 16 QAM
Data throughput (20 MHz channel*) 75 Mbit/s 50 Mbit/s 17 Mbit/s to 50 Mbit/s depending on link quality
No. of business users (T1 level) 1 206 138 46 to 138
No. of residential users (512 kbit/s) 2 1,552 1,035 345 to 1,035
Source: Intel
Assumes two 10MHz bands in the base station as benchmark for comparison purposes. Over-subscription rate is 5x for business and 12.5x for residential. Also takes into account overhead (efficiency), which for 802.16 is 85% independent of number of users.

Chart courtesy of Daily Wireless

What I have a slight problem with is the claims as to how many users can be services from a single basestation. According to the chart above, within the four mile range limit we should be able to see an awesome 75Mbps of throughput. I am not sure how this would translate into 206 T1 class business users based on the subscription rates I see as rapidly approaching. In fact, if you are willing to believe that we are near a one to one subscription rate the best we could expect to see would be somewhere in the neighborhood of 50 T1 class users per basestation at the theoretical best.

Somehow I don’t think the equipment will be able to handle the flood of continuous packets these businesses will be expecting to be able to pass but I will say that Alvarion has surprised me on many occasions before and this might be one more time to add to my list. As far as the claim that one of these basestations will be capable of handling 1552 residential users (at 512Kbps service levels) that is something I find very hard to accept. I have no idea what oversubscription rates are being used to quote that but the term “optimistic” certainly comes to mind in much the same way 802.11b will deliver 11Mbps.

I can’t wait to see what kind of effect IPTV and devices like the SlingBox are going to have on this model but I can tell you that as we move forward our customers are going to demand more bandwidth and in a continuous mode.

This is what Lightreading has charted and is predicting for the future.

Will you be ready?

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