December 4th, 2008

Posted by Andrew Nusca

Google is by far the largest user of Internet bandwidth, its share of bandwidth usage is rising rapidly, and its bandwidth use is orders of magnitude greater than its payment for its cost, according to a new study by NETCompetition.org, a site committed to Net Neutrality “pro-competition Internet forum funded by broadband companies.”

According to the study, Google used 16.5 percent of all U.S. consumer Internet traffic in 2008, and that share is estimated to grow to 25 percent in 2009 and 37 percent in 2010. Why? According to the study, because Google’s search bots regularly copy every page on the Internet, some as frequently as every few seconds, and Google’s YouTube streams almost half of all video streamed on the Internet.

Furthermore, the study estimates Google’s payment to fund just the U.S. consumer broadband Internet segment to be approximately $344 million in 2008 or 0.8 percent of U.S. consumers’ flat-rate monthly Internet access costs of $44.0 billion. Thus Google’s 16.5 percent share of all 2008 U.S. consumer bandwidth usage, is roughly 21 times greater than Google’s 0.8 percent share of U.S. consumer bandwidth costs — or  what the study calls a roughly “$6.9 billion subsidy of Google” by U.S. consumers.

Do you buy this argument? I’m not sure I understand how this is possible, but perhaps you readers versed in this kind of thing can explain it in the comments.

According to the study, researchers used Cisco traffic usage data combined with market share data from Hitwise and Comscore to estimate Google’s share. Google’s bandwith costs are (of course) estimated based on publicly-disclosed operating cost data. (The precise methodology can be found on page 4 of the study.)

The 27-page study can be found here as a PDF. The press release, after the jump:

For Immediate Release December 4, 2008

Contact: Scott Cleland 703-217-2407

First-Ever Study of U.S. Consumer Internet Usage and Cost Finds
Google Uses 21 Times More Bandwidth than it Pays For

Google uses 16.5% of U.S. consumer Internet capacity today,
rising to an estimated 37% in 2010

MCLEAN, Va. – Today Precursor LLC released a first-ever research study of U.S. consumer Internet bandwidth usage and costs with the objective of estimating how much bandwidth Google uses and pays for. The data confirm the study’s core hypotheses, that: Google is by far the largest user of Internet bandwidth, Google’s share of bandwidth usage is rising rapidly, and that Google’s bandwidth use is orders of magnitude greater than its payment for its cost.

The study estimated Google used 16.5% of all U.S. consumer Internet traffic in 2008, and that share is estimated to grow to 25% in 2009 and 37% in 2010. What drives this conspicuous bandwidth consumption is Google’s search bots regularly copy every page on the Internet, some as frequently as every few seconds, and Google’s YouTube streams almost half of all video streamed on the Internet.

The study estimated Google’s payment to fund just the U.S. consumer broadband Internet segment to be approximately $344 million in 2008 or 0.8% of U.S. consumer’s flat-rate monthly Internet access costs of $44.0 billion. Thus Google’s 16.5% share of all 2008 U.S. consumer bandwidth usage, is ~21 times greater than Google’s 0.8% share of U.S. consumer bandwidth costs ? or an implicit ~$6.9 billion subsidy of Google by U.S. consumers.

This research study of Google’s usage vs. cost is relevant to the current broadband policy debate, because Google is the driving force behind InternetForEveryone.org which is pushing “to adopt a national plan to bring open, high-speed Internet connections into every home, at a price all of us can afford.” Internet connections could be more affordable for everyone, if Google paid its fair share of the Internet’s cost.

*  ”It is ironic that Google, the largest user of Internet capacity, pays the least relatively to fund the Internet’s cost; it is even more ironic that the company poised to profit more than any other from more broadband deployment, expects the American taxpayer to pick up its skyrocketing bandwidth tab,” said Scott Cleland, President Precursor LLC, and author of the study.

“The core conclusion of the study is that any sustainable national broadband policy must ensure that the heaviest Internet users pay their fair share of Internet infrastructure costs. It is neither economically rational nor equitable for the biggest users of, and beneficiaries from, shared resources to not share fairly in the recovery of costs,” Mr. Cleland added.

Since Google often compares the Internet to the public highway system, the study also examined how the U.S. highway system apportions costs among business users and consumers. Any analysis of public highway funding will show that businesses/trucks, which put the most cost burden on the highways, pay substantially more than consumers/cars ? the exact opposite of Google’s recommended broadband model, where consumers shoulder most all of Google’s costs for using and profiting off the Internet — more than any other entity.

*  The study highlights the inconsistency in Google’s position supporting government ownership/regulation of the Internet like the U.S. highway system but not adopt the economic model and fairness of the highway system — where the heaviest users that cause the most costs — shoulder their fair share of the costs.

The study’s methodology is straight-forward, transparent, well documented and replicable so Google or others can provide improvements or alternative estimates — and so other countries can estimate if Google uses more of their country’s Internet capacity than it pays for.

*  The study’s author, Precursor President Scott Cleland, said: “While I expect the study to generate a healthy debate over the methodology, assumptions and estimates, any rigorous analysis of the data will lead to the same incontrovertible conclusion of this study — that Google’s U.S. consumer Internet bandwidth usage share vastly exceeds its payment share of the cost.”

*  The study was conducted over the last several months by Scott Cleland, President of Precursor LLC, a leading techcom research and consulting firm. +  Cleland was formerly an Institutional Investor Magazine top independent telecom analyst in 2004 and 2005.
+  Cleland also has a high-profile track record in spotting big anomalies in Internet traffic. In late 2000, Cleland was the first analyst to expose that Internet traffic was in reality growing 90% slower than what the market assumed, heralding the bust of the telecom bubble that wiped out over $1 trillion in market capitalization in 15 data-dependent companies.
+  Precursor now provides research for companies and Cleland is Chairman of NetCompetition.org a pro-competition Internet forum funded by broadband companies.

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December 3rd, 2008

Posted by Andrew Nusca

An interesting article in Slate by Jacob Leibenluft the other day asks a simple question:

Do you save more energy keeping your laptop plugged in during use, or should you use your charger only after the battery runs out of juice?

It’s a complicated question, with even more complicated answers, since different manufacturers give slightly different answers: Lenovo and Dell reportedly say your battery should be fine if your computer stays plugged in; HP says you should remove the battery if you are running on AC power for weeks at a time; Apple suggests you should unplug and run off the battery every once in a while.

So who’s right?

Assuming you use the same energy plugged in and not, you’re probably better off staying plugged in, because energy is lost in the process of charging the battery, storing the electricity, cialis purchase and then powering the computer from the battery, according to Leibenluft.

A report (.pdf) prepared by the Natural Resources Defense Council five years ago estimated that running a laptop from AC power is about 20 percent more energy-efficient than doing it off a battery.

But that was five years ago, ages in tech time. Leibenluft reports: “Even if battery charging systems have improved since then, common sense suggests that using AC power requires less energy.”

The article takes the green angle, noting that just by using a laptop (and not a desktop), you’re already saving money, since laptops are far more efficient and require less energy to manufacture than their boxy counterparts.

If you contend that keeping a laptop plugged in damages the life of the battery, it’s an even tougher call: Batteries require an awful lot of energy to manufacture, and there’s an environmental cost to recycling a spent one, so what’s worse in the long run?

But that’s the global view. What about the energy bill you pay for at the end of each month?

The final tally can also be affected by this caveat: most laptops are set up to use less energy when they aren’t plugged in, since battery life is at a premium, so as soon as they start receiving AC power, they’re more inclined to kick it up a notch, performance-wise (brighter screen and so forth). So if you’ve never touched your laptop’s power settings before, chances are it uses more energy when it’s plugged into the wall.

So who’s right in this debate? It’s still unclear, and the vampire suck of your computer’s power adapter only makes matters worse.

December 3rd, 2008

Posted by Mary Jo Foley

Blogger Paul Thurrott has written a couple of interesting posts about the difference between “simple” and “easy” in the context of Windows 7.

Sure, Windows 7 is still in the pre-beta phase, meaning the user-interface elements still will be tweaked considerably before the product is released to manufacturing. But Thurrott raises a number of points that left me nodding my head in agreement.

I am a Windows user by choice, not simply because I blog about Microsoft. When I saw the recent demos of Windows 7 — with its JumpLists, AeroPeek, AeroSnaps and lots of other eye candy — I was torn. I want some of what’s coming in Windows 7, such as fewer UAC prompts, simpler backup and restore, better peripheral handling. But I really do not care if I get more fancy bells and whistles that just clutter my desktop.

Thurrott blogged:

“Windows 7 basically takes Windows one step closer to the design aesthetic of the Mac, where form is valued over function. I’m not sure this is the right strategy. Simplicity, taken in isolation, may seem like a good idea. But I’m afraid that in Windows 7, Microsoft is sacrificing too much in its bid to be more like Apple. And it’s the users of Windows who will pay the price.”

If you are a PC user like me, you definitely will pay the price. I value ease of use far more than fancy graphics. The two don’t have to be mutually exclusive — and given the direction Microsoft ends up taking once it provides testers with the Superbar — maybe they won’t.

(Given Beta 1 of Windows 7, which many are now expecting around January 13, is supposed to be feature-complete, I’m expecting we’ll get to see what the Superbar will look like real soon now. Me? I still think we might see Win 7 Beta 1 on or around December 17, but in either case, it’s not too long until we see the latest Windows 7 look and feel.)

If I wanted a Mac-like environment, I’d buy a Mac. I want an computing environment that helps me get my work done and doesn’t require a how-to manual to figure out which icon does what. Maybe Microsoft could introduce “Windows 7 Luddite Edition” cialis professional vs cialis for those of us who value function over form?

What’s your take? Do you think Microsoft is too focused on making Windows 7 in Mac OS X’s image?

On a related note, for more Windows 7 analysis — in podcast form with yours truly and The Register’s Software Editor Gavin Clarke — check out the latest edition of “MicroBite.”