ISPs costs have not risen with increased traffic Internet 'myths' put to the test in new report
07 October 2011
Internet Service Providers (ISP's) are exaggerating the cost of meeting the ever-increasing demand for data, according to a new report.
The report by Plum Consulting says that, although some ISP's argue their costs are 'ballooning' because of increasing internet traffic, they have concluded that this is not the case.
For traditional fixed line services in particular, the costs of carrying traffic are only a small part of ISP's total revenue. More importantly this percentage is expected to stay the same or decline in future.
Mobile networks are acknowledged as slightly different, according to the report, the cost of adding capacity is higher but mobile network technology has seen improvements and these costs have fallen.
Online content providers
The same report also picks up on a number of other related internet economy 'myths'. Including the idea that applications and content providers 'cause' traffic and they 'free ride' on networks. Content providers include, for example, the BBC and its iPlayer application. The report itself was commissioned by content providers including the BBC, Channel 4, Skype and Yahoo!.
It puts forward the idea that it's consumers that cause the traffic in accessing these services rather than the content and application providers themselves. It also points out that these providers often invest in internet access infrastructure and actually stimulate demand for internet access in the first place.