The Promise of Streaming Video: An Unfunded Mandate

By Art Reisman, CTO,

Art Reisman CTO
Art Reisman is a partner and co-founder of APconnections, a company that provides bandwidth control solutions (NetEqualizer) to
ISPs, Universities, Libraries, Mining Camps, and any organization where groups of users must share their Internet resources equitably. What follows is an objective educational journey on how consumers and ISPs can live in harmony with the explosion of YouTube video.

The following is written primarily for the benefit of mid-to-small sized internet services providers (ISPs).  However, home consumers may also find the details interesting.  Please follow along as I break down the business cost model of the costs required to keep up with growing video demand.

In the past few weeks, two factors have come up in conversations with our customers, which has encouraged me to investigate this subject further and outline the challenges here:

1) Many of our ISP customers are struggling to offer video at competitive levels during the day, and yet are being squeezed due to high bandwidth costs.  Many look to the NetEqualizer to alleviate video congestion problems.  As you know, there are always trade-offs to be made in handling any congestion issue, which I will discuss at the end of this article.  But back to the subject at hand.  What I am seeing from customers is that there is an underlying fear that they (IT adminstrators) are behind the curve.   As I have an opinion on this, I decided I need to lay out what is “normal” in terms of contention ratios for video, as well what is “practical” for video in today’s world.

2) My internet service provider, a major player that heavily advertises how fast their speed is to the home, periodically slows down standard YouTube Videos.  I should be fair with my accusation, with the Internet you can actually never be quite certain who is at fault.  Whether I am being throttled or not, the point is that there are an ever-growing number of video content providers , who are pushing ahead with plans that do not take into account, nor care about, a last mile provider’s ability to handle the increased load.  A good analogy would be a travel agency that is booking tourists onto a cruise ship without keeping a tally of tickets sold, nor caring, for that matter.  When all those tourists show up to board the ship, some form of chaos will ensue (and some will not be able to get on the ship at all).

Some ISPs are also adding to this issue, by building out infrastructure without regard to content demand, and hoping for the best.  They are in a tight spot, getting caught up in a challenging balancing act between customers, profit, and their ability to actually deliver video at peak times.

The Business Cost Model of an ISP trying to accommodate video demands

Almost all ISPs rely on the fact that not all customers will pull their full allotment of bandwidth all the time.  Hence, they can map out an appropriate subscriber ratio for their network, and also advertise bandwidth rates that are sufficient enough to handle video.  There are four main governing factors on how fast an actual consumer circuit will be:

1) The physical speed of the medium to the customer’s front door (this is often the speed cited by the ISP)
2) The combined load of all customers sharing their local circuit and  the local circuit’s capacity (subscriber ratio factors in here)
3) How much bandwidth the ISP contracts out to the Internet (from the ISP’s provider)

4) The speed at which the source of the content can be served (Youtube’s servers), we’ll assume this is not a source of contention for our examples below, but it certainly should remain a suspect in any finger pointing of a slow circuit.

The actual limit to the am0unt of bandwidth a customer gets at one time, which dictates whether they can run a live streaming video, usually depends  on how oversold their ISP is (based on the “subscriber ratio” mentioned in points 1 and 2 above). If  your ISP can predict the peak loads of their entire circuit correctly, and purchase enough bulk bandwidth to meet that demand (point 3 above), then customers should be able to run live streaming video without interruption.

The problem arises when providers put together a static set of assumptions that break down as consumer appetite for video grows faster than expected.  The numbers below typify the trade-offs a mid-sized provider is playing with in order to make a profit, while still providing enough bandwidth to meet customer expectations.

1) In major metropolitan areas, as of 2010, bandwidth can be purchased in bulk for about $3000 per 50 megabits. Some localities less some more.

2) ISPs must cover a fixed cost per customer amortized: billing, sales staff, support staff, customer premise equipment, interest on investment , and licensing, which comes out to about $35 per month per customer.

3) We assume market competition fixes price at about $45 per month per customer for a residential Internet customer.

4) This leaves $10 per month for profit margin and bandwidth fees.  We assume an even split: $5 a month per customer for profit, and $5 per month per customer to cover bandwidth fees.

With 50 megabits at $3000 and each customer contributing $5 per month, this dictates that you must share the 50 Megabit pipe amongst 600 customers to be viable as a business.  This is the governing factor on how much bandwidth is available to all customers for all uses, including video.

So how many simultaneous YouTube Videos can be supported given the scenario above?

Live streaming YouTube video needs on average about 750kbs , or about 3/4 of a megabit, in order to run without breaking up.

On a 50 megabit shared link provided by an ISP, in theory you could support about 70 simultaneous YouTube sessions, assuming nothing else is running on the network.  In the real world there would always be background traffic other than YouTube.

In reality, you are always going to have a minimum fixed load of internet usage from 600 customers of approximately 10-to-20 megabits.  The 10-to-20 megabit load is just to support everything else, like web sufing, downloads, skype calls, etc.  So realistically you can support about 40 YouTube sessions at one time.  What this implies that if 10 percent of your customers (60 customers) start to watch YouTube at the same time you will need more bandwidth, either that or you are going to get some complaints.  For those ISPs that desperately want to support video, they must count on no more than about 40 simultaneous videos running at one time, or a little less than 10 percent of their customers.

Based on the scenario above, if 40 customers simultaneously run YouTube, the link will be exhausted and all 600 customers will be wishing they had their dial-up back.  At last check, YouTube traffic accounted for 10 percent of all Internet Traffic.  If left completely unregulated, a typical rural ISP could find itself on the brink of saturation from normal YouTube usage already.  With tier-1 providers in major metro areas, there is usually more bandwidth, but with that comes higher expectations of service and hence some saturation is inevitable.

This is why we believe that Video is currently an “unfunded mandate”.  Based on a reasonable business cost model, as we have put forth above, an ISP cannot afford to size their network to have even 10% of their customers running real-time streaming video at the same time.  Obviously, as bandwidth costs decrease, this will help the economic model somewhat.

However, if you still want to tune for video on your network, consider the options below…

NetEqualizer and Trade-offs to allow video

If you are not a current NetEqualizer user, please feel free to call our engineering team for more background.  Here is my short answer on “how to allow video on your network” for current NetEqualizer users:

1) You can determine the IP address ranges for popular sites and give them priority via setting up a “priority host”.
This is not recommended for customers with 50 megs or less, as generally this may push you over into a gridlock situation.

2) You can raise your HOGMIN to 50,000 bytes per second.
This will generally let in the lower resolution video sites.  However, they may still incur Penalities should they start buffering at a higher rate than 50,000.  Again, we would not recommend this change for customers with pipes of 50 megabits or less.

With either of the above changes you run the risk of crowding out web surfing and other interactive uses , as we have described above. You can only balance so much Video before you run out of room.  Please remember that the Default Settings on the NetEq are designed to slow video before the entire network comes to halt.

For more information, you can refer to another of Art’s articles on the subject of Video and the Internet:  How much YouTube can the Internet Handle?

Other blog posts about ISPs blocking YouTube

NetEqualizer News: March 2010

March 2010 NetEqualizer News

NetEqualizer News – IPv6 and the NetEqualizer and the Next NetEqualizer Release
Enjoy another issue of the NetEqualizer Newsletter. This month, we discuss NetEqualizer’s compatibility with IPv6 and our newest NetEqualizer release. As always, feel free to pass this along to others who might be interested in NetEqualizer or AirEqualizer news.

In this issue:

  • IPv6 And The NetEqualizer
  • Cool New NetEqualizer Tool Alert
  • What To Do About YouTube?
  • NetEqualizer Advanced Tips & Tricks 
  IPv6 And The NetEqualizer
A couple of weeks ago, a customer called and mentioned that they were being forced to purchase new equipment from a competitor of ours, as their equipment is not firmware upgradeable to IPv6. I am guessing that other vendor is hoping for one of those “y2k windfalls”, where they have a captive audience with no choice but to purchase expensive upgrades.
For those of you who currently own or are thinking of purchasing a NetEqualizer product, please do not think you will lose your investment when you go to IPv6. When you are ready for IPv6 in 2010, the NetEqualizer will be too! We are happy to inform you that we have tested our IPv6 patch and expect clear sailing for all customers to upgrade to this when the time comes.
All that will be required to apply this patch is that you are current on NSS (yearly software upgrade & support). If you are not sure if you are current on NSS, please email us at with your serial number, and we will check for you.
We plan to release our IPv6 patch in Q2 2010. We will also roll it into a Release in Fall 2010. We will update you via this Newsletter when the IPv6 patch is available.
For more information on why you might care about IPv6, Wikipedia has a good reference article on the subject at
  ***Cool New NetEqualizer Tool Alert***
    New API planned for Release in Fall 2010 to control User Quotas and more!

In our Latest Release (4.2.x), we have removed our User Limit Utility from the NetEqualizer Main Menu Page. Please note: for those of you that depend on it, we will continue to support our User Limit/ Quota Utility that was developed 5 years ago.
We have done this because we have thought of a better way to offer this feature to you. Rather than us trying to guess at everything you might need, we are going to let you create Custom IP Quota Actions & Reports that work for you.
As a teaser to this upcoming release, we have listed proposed templates (program calls for the upcoming API) below:
start_capture(IP) Will begin collection data on an individual IP. Data will include bytes downloaded and bytes uploaded. After calling this routine you will be able to get instant updates of data consumed by that IP.
status_ip(IP) Will return a current readout of data downloaded and uploaded on the specified IP, since the issue of the start_capture command.
reset_ip(IP) Will reset all counters for upload and download.
stop_capture(IP) Will stop data counters on this IP until the next start_capture is issued.
time_of_capture(IP) Will return the time of the last start_capture command.
With this API it will now be possible for you to write your own utilities to check bandwidth usage by user and also to take action when quotas are reached. It will allow you to easily customize a user-friendly statistics page for your customers to preview, much like checking your phone minutes from a web site or mobile phone.
We are also considering ways to enable you to share your custom utilities with other NetEqualizer users. At a minimum, we will do something similar to what we do today with common questions & answers in our NetEqualizer Support Archive on our blog. Look for more details in upcoming issues!
Estimated release date for the new API will be Q3 2010. If you have feature requests for this utility, please submit them to us at
  What To Do About YouTube?
We get a lot of questions about how to handle YouTube, as this has proliferated across the world as the medium to share video. Enclosed is a link to our new blog article, which explores the business cost model behind video. We think it is an interesting read for small-to-mid size ISPs, consumers, and anyone that feels frustrated with sizing a network to accommodate video.
  NetEqualizer Advanced Tips & Tricks
This month we are publishing a compilation of NetEqualizer Tips & Tricks that was put together by a long-time NetEqualizer customer (since 2006), Mario Crespo of Adeatel S.A, a wireless Internet provider in the rural zone of Ecuador, South America. Mario graciously offered to put these into one document, using some of the best of that he found in various articles and newsletters from the NetEqualizer website and NetEqualizer blog site.
Mario’s hope was to help others quickly and easily find some advanced Tips & Tricks. Thanks Mario for thinking of your fellow NetEqualizer users!
If you have something to add to this compilation, please email it to us at
Contact Information
phone: 303-997-1300

APconnections Partners AiBridges
Camada 7
Candela Technologies
Extensive Networks
Grupo Imaginación Cibernética
Telefonía Pública y Privada S.A.
Tranzeo Wireless Technologies
NetEqualizer News Blog Ever wanted to comment or ask a question about something you’ve seen in the NetEqualizer Newsletter? Now you can at the NetEqualizer News Blog. We’ve set up the blog to help us stay connected with our customers, as well as help our customers stay connected with us. We’ll include updates and news on NetEqualizer and AirEqualizer products, as well as our take on industry news. Here’s where you can find it:


Hotel Property Managers Should Consider Generic Bandwidth Control Solutions

Editors Note: The following article caught my attention this morning. The hotel industry is now seriously starting to understand that they need some form of bandwidth control.   However, many hotel solutions for bandwidth control are custom marketed, which perhaps puts their economy-of-scale at a competitive disadvantage. Yet, the NetEqualizer bandwidth controller, as well as our competitors, cross many market verticals, offering hotels an effective solution without the niche-market costs. For example, in addition to the numerous other industries in which the NetEqualizer is being used, some of our hotel customers include: The Holiday Inn Capital Hill, a prominent Washington DC hotel; The Portola Plaza Hotel and Conference Center in Monterrey, California; and the Hotel St. Regis in New York City.

For more information about the NetEqualizer, or to check out our live demo, visit

Heavy Users Tax Hotel Systems:Hoteliers and IT Staff Must Adapt to a New Reality of Extreme Bandwidth Demands

By Stephanie Overby, Special to Hotels — Hotels, 3/1/2009

The tweens taking up the seventh floor are instant-messaging while listening to Internet radio and downloading a pirated version of “Twilight” to watch later. The 200-person meeting in the ballroom has a full interactive multimedia presentation going for the next hour. And you do not want to know what the businessman in room 1208 is streaming on BitTorrent, but it is probably not a productivity booster.

To keep reading, click here.

Four Reasons Why Peer-to-Peer File Sharing Is Declining in 2009

By Art Reisman

CTO of APconnections, makers of the plug-and-play bandwidth control and traffic shaping appliance NetEqualizer

Art Reisman CTO

I recently returned from a regional NetEqualizer tech seminar with attendees from Western Michigan University, Eastern Michigan University and a few regional ISPs.  While having a live look at Eastern Michigan’s p2p footprint, I remarked that it was way down from what we had been seeing in 2007 and 2008.  The consensus from everybody in the room was that p2p usage is waning. Obviously this is not a wide data base to draw a conclusion from, but we have seen the same trend at many of our customer installs (3 or 4 a week), so I don’t think it is a fluke. It is kind of ironic, with all the controversy around Net Neutrality and Bit-torrent blocking,  that the problem seems to be taking care of itself.

So, what are the reasons behind the decline? In our opinion, there are several reasons:

1) Legal Itunes and other Mp3 downloads are the norm now. They are reasonably priced and well marketed. These downloads still take up bandwidth on the network, but do not clog access points with connections like torrents do.

2) Most music aficionados are well stocked with the classics (bootleg or not) by now and are only grabbing new tracks legally as they come out. The days of downloading an entire collection of music at once seem to be over. Fans have their foundation of digital music and are simply adding to it rather than building it up from nothing as they were several years ago.

3) The RIAA enforcement got its message out there. This, coupled with reason #1 above, pushed users to go legal.

4) Legal, free and unlimited. YouTube videos are more fun than slow music downloads and they’re free and legal. Plus, with the popularity of YouTube, more and more television networks have caught on and are putting their programs online.

Despite the decrease in p2p file sharing, ISPs are still experiencing more pressure on their networks than ever from Internet congestion. YouTube and NetFlix  are more than capable of filling in the void left by waning Bit-torrents.  So, don’t expect the controversy over traffic shaping and the use of bandwidth controllers to go away just yet.

Can your ISP support Video for all?

By Art Reisman, CTO,

Art Reisman CTO

Art Reisman

As the Internet continues to grow with higher home user speeds available from Tier 1 providers,  video sites such as YouTube , Netflix,  and others are taking advantage of these fatter pipes. However, unlike the peer-to-peer traffic of several years ago (which seems to be abating), These videos don’t face the veil of copyright scrutiny cast upon p2p which caused most p2p users to back off. They are here to stay, and any ISP currently offering high speed Internet will need to accommodate the subsequent rising demand.

How should a Tier2 or Tier3 provider size their overall trunk to insure smooth video at all times for all users?

From measurements done in our NetEqualizer laboratories, a normal quality video stream requires around 350kbs bandwidth sustained over its life span to insure there are no breaks or interruptions. Newer higher definition videos may run at even higher speeds.

A typical rural wireless WISP will have contention ratios of about 300 users per 10-megabit link. This seems to be the ratio point where a small businesses can turn  a profit.  Given this contention ratio, if 30 customers simultaneously watch YouTube, the link will be exhausted and all 300 customers will be experience protracted periods of poor service.

Even though it is theoretically possible  to support 30 subscribers on a 10 megabit , it would only be possible if the remaining 280 subscribers were idle. In reality the trunk will become saturated with perhaps 10 to 15  active video streams,  as  obviously  the remaining 280 users are not idle. Given this realistic scenario, is it reasonable for an ISP with 10 megabits and 300 subscribers to tout they support video ?

As of late 2007 about 10 percent of Internet traffic was attributed to video. It is safe to safe to assume that number is higher now (Jan 2009). Using the 2007 number, 10 percent of 300 subscribers would yield on average 30 video streams, but that is not a fair number, because the 10 percent of people using video, would only apply to the subscribers who are actively on line, and not all 300. To be fair,  we’ll assume 150 of 300 subscribers are online during peak times.  The calculation now  yields an estimated 15 users doing video at one time, which is right on our upper limit of smooth service for a 10 megabit link, any more and something has to give.

The moral of this story so far is,  you should  be cautious before promoting unlimited video support with contention ratios of 30 subscribers to 1 megabit.  The good news is, most rural providers are not competing in metro areas, hence customers will have to make do with what they have. In areas more intense competition for customers where video support might make a difference, our recommendation is that  you will need to have a ratio closer to 20 subscribers to 1 megabit, and you still may have peak outages.

One trick you can use to support Video with limited Internet resources.

We have previously been on record as not being a supporter of Caching to increase Internet speed, well it is time to back track on that. We are now seeing results that Caching can be a big boost in speeding up popular YouTue videos. Caching and video tend to work well together as consumers tend to flock a small subset of the popular videos. The downside is your local caching server will only be able to archive a subset of the content on the master YouTube servers but this should be enough to give the appearance of pretty good video.

In the end there is no substitute for having a big fat pipe with enough room to run video, we’ll just have to wait and see if the market can support this expense.

How Much YouTube Can the Internet Handle?

By Art Reisman, CTO, 

Art Reisman CTO

Art Reisman


As the Internet continues to grow and true speeds become higher,  video sites like YouTube are taking advantage of these fatter pipes. However, unlike the peer-to-peer traffic of several years ago (which seems to be abating), YouTube videos don’t face the veil of copyright scrutiny cast upon p2p which caused most users to back off.

In our experience, there are trade offs associated with the advancements in technology that have come with YouTube. From measurements done in our NetEqualizer laboratories, the typical normal quality YouTube video needs about 240kbs sustained over the 10 minute run time for the video. The newer higher definition videos run at a rate at least twice that. 

Many of the rural ISPs that we at NetEqualizer support with our bandwidth shaping and control equipment have contention ratios of about 300 users per 10-megabit link. This seems to be the ratio point where these small businesses can turn  a profit.  Given this contention ratio, if 40 customers simultaneously run YouTube, the link will be exhausted and all 300 customers will be wishing they had their dial-up back. At last check, YouTube traffic accounted for 10 percent of all Internet Traffic.  If left completely unregulated,  a typical rural  ISP could find itself on the brink of saturation from normal YouTube usage already. With tier-1 providers in major metro areas there is usually more bandwidth, but with that comes higher expectations of service and hence some saturation is inevitable. 

If you believe there is a conspiracy, or that ISPs are not supposed to profit as they take risk and operate in a market economy, you are entitled to your opinion, but we are dealing with reality. And there will always be tension between users and their providers, much the same as there is with government funds and highway congestion. 

The fact is all ISPs have a fixed amount of bandwidth they can deliver and when data flows exceed their current capacity, they are forced to implement some form of passive constraint. Without them many networks would lock up completely. This is no different than a city restricting water usage when reservoirs are low. Water restrictions are well understood by the populace and yet somehow bandwidth allocations and restrictions are perceived as evil. I believe this misconception is simply due to the fact that bandwidth is so dynamic, if there was a giant reservoir of bandwidth pooled up in the mountains where you could see this resource slowly become depleted , the problem could be more easily visualized. 

The best compromise offered, and the only comprise that is not intrusive is bandwidth rationing at peak hours when needed. Without rationing, a network will fall into gridlock, in which case not only do the YouTube videos come to halt , but  so does e-mail , chat , VOIP and other less intensive applications. 

There is some good news, alternative ways to watch YouTube videos. 

We noticed during out testing that YouTube videos attempt to play back video as a  real-time feed , like watching live TV.  When you go directly to YouTube to watch a video, the site and your PC immediately start the video and the quality becomes dependent on having that 240kbs. If your providers speed dips below this level your video will begin to stall, very annoying;  however if you are willing to wait a few seconds there are tools out there that will play back YouTube videos for you in non real-time. 

Buffering Tool 

They accomplish this by pre-buffering before the video starts playing.  We have not reviewed any of these tools so do your research. We suggest you google “YouTube buffering tools” to see what is out there. Not only do these tools smooth out the YouTube playback during peak times or on slower connections , but they also help balance the load on the network during peak times. 

Bio Art Reisman is a partner and co-founder of APconnections, a company that provides bandwidth control solutions (NetEqualizer) to ISPs, Universities, Libraries, Mining Camps and any organization where groups of users must share their Internet resources equitably. What follows is an objective educational journey on how consumers and ISPs can live in harmony with the explosion of YouTube video.

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