[Zsd-news] ZSD Newsletter

[Ian Forbes]

Hi All


NEW ADSL REGULATIONS PUBLISHED BY ICASA

ICASA ("The Independent Communications Authority of South Africa") have
published a set of regulations governing the provision of ADSL Internet
access in South Africa. (The regulations can be accessed via a link on
their homepage, http://www.icasa.org.za/).

At first sight the regulations promise better, cheaper ADSL access.
Significant aspects include that "local" bandwidth should not be capped,
"port prioritization" is prohibited and IP addresses must not be reset
every 24 hours.

However there has been wide spread criticism of the regulations from
various parties in the industry. They point out that:

- The regulations are poorly drafted and subject to being interpreted in
different manners.

- The regulations are very specific about certain aspects of the ADSL
service based on the current business model as deployed by Telkom. They
do not allow for alternative business models.

- While they clearly regulate aspects of the service at a retail level,
(ie what the minimum levels of service to the customer are), they do not
regulate aspects of the business on a wholesale level. Thus ISP's are
required to meet certain criteria such as un-capped "local" bandwidth in
their retail products, while Telkom are still free to charge them on a
per GB basis for wholesale supply of the same commodity.

Alternate providers in the ADSL market, such as large ISP's like
Internet Solutions and the "Second Network Operator" (SNO) are faced
with having to comply with very specific regulations when they might
prefer to offer products based on a very different set of criteria.

One party which has, to date, been silent on the new regulations, is
Telkom. Personally I believe that we can predict two outcomes from the
process:

1) ADSL is going to get cheaper for the end user. This process has begun
already with recent price reductions and Telkom has already issued a
trading update on the New York Stock Exchange indicating that they
expect this to have an effect on their revenues.

2) Notwithstanding the above, Telkom is set to remain the dominant
player in the market for the foreseeable future.


WHO USED ALL MY BANDWIDTH?

The new regulations have not been implemented yet and we are right in
the middle of the month end "capping" season. At this time of the month
we get many calls from customers who have discovered they are close to,
or have exceeded their monthly bandwidth allocation.

The question we get asked, time and time again, is "who used all the
bandwidth". At some customers we have proxy/firewall servers installed
on the site and we can extract detailed reports to answer the question.
Others do not have these facilities and we can be of less assistance.

However, on many occasions, we find that the answer to the question is
that the bandwidth was consumed by playing "Internet Radio" stations.
Other streaming media applications, such as Internet enabled security
camera's  can also add to the problem. Downloading of audio and video
material, eg MP3's, "podcast" broadcasts and video's from various legal
and illegal sources also contributes to the problem.

The bottom line, it is usually cheaper to buy batteries for your
portable radio than it is to listen to radio stations over the Internet
via your ADSL line.


THE BANDWIDTH VOLUME-VALUE DILEMA

Applications like the streaming media ones discussed above consume high
bandwidth relative to the value of the content or service that they
deliver. While other applications, like Internet banking, consume very
little bandwidth but offer a very high value of service.

To get some kind of indication of the "value" of a service or content,
consider the inconvenience caused if it stops working. Failure of a
streaming media service may mean you cannot listen to the radio, while
failure of an Internet banking service may mean the staff salaries are
paid late.

These two groups of application can often live happily side by side,
sharing the same resources. The high value/low volume applications
consume so few resources that there is ample capacity left for the low
value/high volume applications. When the lines become congested, the
high volume applications tend to stop working before the low volume ones
leaving just enough bandwidth to keep the low volume applications
working (perhaps at a slower rate than normal).

It is common for Internet Service Providers (ISP's) to sell a service
for a "flat rate" fixed monthly fee. It is typical in these situations
for a small fraction of the subscriber base (eg 5%) to consume a very
high portion (eg 80%) of the resources.

It is important for all parties that the quality of service to the low
volume customers to be maintained. The services used by the low volume
customers must be of "high" value to them, or they would not be prepared
to pay their subscriptions. The revenue from their subscriptions cross
subsidizes the resources consumed by the high volume customers. If the
quality of service dropped, the low volume customers would cancel. The
costs to the high value customers would go up and many of them would
cancel too. Eventually there would be too few customers left to keep the
service running.

Thus ISP's will often employ techniques to limit the activities of the
high volume consumers so as to ensure the quality of service enjoyed by
the low volume consumers. These techniques include the likes of "traffic
shaping" and "bandwidth caps".

There are some things to be learnt from the above:

- If you have a high value application and you wish to run it on a
consumer grade, flat rate, low cost service, you must ensure that your
application does not consume too many resources.

- If you have a high volume, high value application, be prepared to pay
for a premium rate service. This is likely to be several times the cost
of the consumer grade service. (It should be noted that business voice
traffic is one that fits the definition of "high volume" and "high  value".)

- Beware of anybody who promises a service which exploits a loophole in
the system to allow you to consume high volumes of traffic on a consumer
grade service. Even if this works in the short term, the quality of
service is not sustainable and you will be disappointed in the long run.

The new ADSL regulations fly in the face of the above. They specifically
prohibit "port prioritisation" and "caps" - which are steps Telkom
introduced to protect low volume consumers. The implication is that
ICASA does not properly understand the market they are trying to
regulate. I have no doubt that the industry will find a way around the
regulations. If they don't the ADSL service as we know it will cease to
be available.


Regards

Ian