Editor’s Note: The following is a revised and update version of our original article from April 2007.
In a recent article titled, “The White Lies ISPs Tell about Broadband Speeds,” we discussed some of the methods ISPs use when overselling their bandwidth in order to put on their best face for their customers. To recap a bit, oversold bandwidth is a condition that occurs when an ISP promises more bandwidth to its users than it can actually deliver hence, during peak hours you may actually be competing with your neighbor for bandwidth. Since the act of “overselling” is a relative term, with some ISPs pushing the limit to greater extremes than others, we thought it a good idea to do a quick follow-up and define some parameters for measuring the oversold condition.
So what is an acceptable contention ratio?
From a business standpoint, it is whatever a customer will put up with and pay for without canceling their service. This definition may seem ethically suspect, but whether in the bygone days of telecommunications phone service or contemporary Internet bandwidth business, there are long-standing precedents for overselling. What do you think a circuit busy signal is caused by? Or a dropped cell phone call? It’s best to leave the moral debate to a university assignment or a Sunday sermon.
- Rural customers in the US and Canada: Contention ratios of 10 to 1 are common (2007 this was 20 to 1)
- International customers in remote areas of the world: Contention ratios of 20 to 1 are common (2007 was 80 to 1)
- Internet providers in urban areas: Contention ratios of 5 to 1 are to be expected (2007 this was 10 to 1) *
* Larger cable operators have extremely fast last mile connections, most of their speed claims are based on the speed of their last mile connection and not their Internet Exchange point thresholds. The numbers cited are related to their connection to the broader Internet and not the last mile from their office (NOC) to your home. Admittedly, the lines of what is the Internet can be blurred as many cable operators cache popular local content (NetFlix Movies, for example). The movie is delivered from a server at their local office direct to your home, hence technically we would not consider this related to your contention ratio to the Internet.
The numbers above are a good, rough starting point, but things are not as simple as they look. There is a statistical twist as bandwidth amounts get higher.
From the customers perspective of speed, contention ratios can actually increase as the overall Internet trunk size gets larger. For example, if 50 people can share one megabit without mutiny, it should follow that 100 people can share two megabits without mutiny as the ratio has not changed. It is still 50 to 1.
However, from observations of hundreds of ISPs, we can easily conclude that perhaps 110 people can share two megabits with the same tolerance as 50 people sharing one megabit. What this means is that the larger the ISP, the more bandwidth at a fixed cost per megabit, and thus the larger the contention ratios you can get away with.
Is this really true? And if so, what are its implications for your business?
This is simply an empirical observation, backed up by talking to literally thousands of ISPs over the course of four years and noticing how their over subscription ratios increase with the size of their trunk while customer perception of speed remains about the same.
A conservative estimate is that, starting with the baseline ratio listed above, you can safely add 10 percent more subscribers above and beyond the original contention ratio for each megabit of trunk they share.