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Wednesday, June 25, 2008

Will broadband providers throttle femto backhaul traffic?

I've heard a couple of suggestions at the Avren Femtocell conference in London over the last 2 days that a key part of the business model is that "the customer pays for their own backhaul". I've also heard various suggestions that laptop 3G traffic (dongle or embedded) might be offloaded onto the femtocell & fixed broadband.

Where this falls down is in situations where the broadband provider and the femtocell provider are different companies. So perhaps Orange femtos linked to BT ADSL, or AT&T femtos on Comcast cable.

There are two issues here:
  • Extra traffic load for the ISP
  • Competitive or net-neutrality arguments about value transiting "my pipes".

(a third issue - how the mobile operator gets QoS on 3rd-party broadband, is also involved).

Now if the femto traffic is just "best efforts" mobile voice being offloaded, I wouldn't expect most of the broadband providers to worry about the incremental traffic load. But if it's 3GB a month of "dongle" traffic from a PC, going to a mobile broadband provider, that's a different issue. In that case, I'd expect to see traffic-shaping being used, perhaps throttling femto traffic to 100kbit/s or whatever level is applied to other bandwidth-hogging services like BitTorrent.

The competitive argument is a trickier one, and will vary according to markets. In countries where all the main operators have both fixed and mobile arms, any attempt by one to unilaterally block (or charge for) another's femto traffic could lead to a nuclear-style "mutually assured destruction" scenario.

But in other markets where there are dominant ADSL or cable providers that don't have mobile arms, I'd expect some to become pretty aggressive about their femto traffic-management policies. It's not as if it's hard to spot femto backhaul traffic on the network, as it goes to a fixed IP address of the gateway & will have a recognisable profile.

We may see some broadband ISPs attempt to negotiate with mobile operators to guarantee QoS on their lines, for a a price. Some may even return some proportion of cash to the end user, so they don't end up "paying the operator's backhaul costs".


Anonymous said...

I really dont see femto-cell technology taking off with consumers unless its sold as a phone and broadband package together and priced appropriately. Why would I want to pay for an extra "router" as an add-on to my existing ADSL package with another provider just to improve home mobile-phone coverage? And then only to find I then have to pay further or use up my download allowance on the broadband connection for any calls. Its just not going to fly in that way.

Sell me it as a combined ADSL and mobile phone package with cheaper calls at home and you'll be more likely to have me as a consumer - even with an initial fee for the equipment.

ADSL/cable and mobile from the same company seems to be the way I would expect it to work with less hassle.

Dean Bubley said...

In theory, combined broadband + femto/mobile seems to make intuitive sense, I agree.

However, the likelihood of that type of bundling being accepted by consumers will vary strongly depending on where you live.

In the US, where most people have a choice of only 1 or 2 broadband providers, everyone uses cable TV, and there is patchy coverage for mobile, I can see bundles making sense.

Other places like the UK are much more tricky. There are perhaps 30 broadband ISPs, 5 mobile operators, cable only in some areas, 1.6 mobile subs/person, lots of prepay mobile and a prevalance of satellite-based digital TV. Bundling and "family plans" are much less attractive.

Also, much depends on whether the femto proposition is about home coverage for phones, or for 3G data devices. Again, in much of the world outside the US, the driver is macro offload of 3G data at 2.1GHz, not just voice-at-home.