Need, Want, Can Afford

Abstract

We present the first study of broadband services in their broader context, evaluating the impact of service characteristics (such as capacity, latency and loss), their broadband pricing and user demand. We explore these relationships, beyond correlation, with the application of natural experiments. Most efforts on broadband service characterization have so far focused on performance and availability, yet we lack a clear understanding of how such services are being utilized and how their use is impacted by the particulars of the market. By analyzing over 23-months of data collected from 53,000 end hosts and residential gateways in 160 countries, along with a global survey of retail broadband plans, we empirically study the relationship between broadband service characteristics, pricing and demand. We show a strong correlation between capacity and demand, even though subscribers rarely fully utilize their links, but note a law of diminishing returns with relatively smaller increases in demand at higher capacities. Despite the fourfold increase in global IP traffic, we find that user demand on the network over a three year period remained constant for a given bandwidth capacity. We exploit natural experiments to examine the causality between these factors. The reported findings represent an important step towards understanding how user behavior, and the market features that shape it, affect broadband networks and the Internet at large.