Broadband Haircut: Economics Meets Technology

I love it when I can blend my passion (for technology) and my training (in economics). Over the past six weeks, I’ve been doing just that – as I’ve tried to constrain household Internet usage. Six weeks ago, we began a voyage that has been years in the making: we’ve finally given ourselves a ‘broadband haircut’. And the keys to our (hopeful) success have been research, data collection, and data analysis.

Background

We have been paying far too much for broadband data services. And we’ve been doing this for far too many years. For us, our broadband voyage started with unlimited plans. Unlike most people, I’ve spent many years in the telecom business. And so I’ve been very fortunate to pay little (or nothing) for my wireless usage. At the same time, most household broadband was priced based upon bandwidth and not total usage. So we have always made our decisions based upon how much peak data we required at any given point in time.

But things are changing – for myself and for the industry.

First, I no longer work for a telecom. Instead, I work for myself as an independent consultant. So I must buy wireless usage in the “open” marketplace. [Note: The wireless market is only “open” because it is run by an oligopoly and not by a monopoly.]

Second, things have changed in the fixed broadband marketplace. Specifically, sanctioned, local access “monopolies” are losing market – and revenue. There is ample evidence to unequivocally state that cable companies charge too much for their services. For many years, they could charge whatever they wanted as long as they kept the local franchise in a particular municipality. But as competition has grown – mostly due to new technologies – so has the eventual downward pressure on cable revenues.

Starting a few years ago, cable companies started to treat their fixed broadband customers just as wireless operators have treated their mobile customers. Specifically, they started to impose data caps.  But for many long-term customers, they just kept paying the old (and outrageously high) prices for “unlimited” services.

“But the times, they are a changin’.”

Cord Cutting Has Increased Pressure

As more and more content delivery channels are opening up, more customers are starting to see that they are paying far too much for things that they don’t really want or need. How many times have you wondered what each of the ESPN channels is costing you? Or have you ever wondered if the H&G DIY shows are worth the price that you pay for them?

Many people have been feeling the way that you must feel. And for some, the feelings of abuse are intolerable. Bundling and price duress have infuriated many customers. Some of those customers have been fortunate to switch operators – if others are available in their area. Some customers have just cut the cord to bundled TV altogether.

And this consumer dissatisfaction has led to dissatisfaction in the board rooms of most telecom companies. But instead of reaching out to under-served customers and developing new products and new markets (both domestic and overseas), most telecom executives are looking for increases in “wallet share”; they are trying to bundle more services to increase their revenue. Unfortunately, the domestic markets are pretty much tapped out. “Peak cable” is upon most operators.

Nevertheless, some boards think that punishing their customers is the best means of revenue retention. Rather than switching to new products and new services, some operators have put debilitating caps on their customers in the hopes that they can squeeze a few more dollars from people that are already sick and tired of being squeezed. The result will be an even further erosion of confidence and trust in these corporations.

Making It Personal

Six weeks ago, we decided that it was time to cut the cord. We’ve been planning this for eighteen months. However, we had a contract that we needed to honor. But the instant that we dropped off our set top devices at Comcast, they brought out their real deals. In a matter of moments, we had gone from $125 per month (w/o fees) to $50 per month (w/o fees). So we took that deal – for one year. After all, we would be getting almost the same bandwidth for a tremendously reduced price. Ain’t competition grand?

But like most people, we didn’t know how much data we used while we were on an ‘unlimited’ plan. And in fairness, we didn’t care – until we started to see just how much data we were using. Bottom line: Once we had to pay for total consumption (and not just for peak consumption), we started to look at everything that would spin the consumption ‘meter’. And when we got the first email from Comcast indicating that we had exceeded their artificial, one terabyte (per month) cap [that was buried somewhere deep within the new contract], we began a frantic search for ‘heavy hitters’.

Make Decisions Based Upon Data

Our hunt for high-bandwidth consumers began in earnest. And I had a pretty good idea about where to start. First, I upped my bet on ad blocking. Most ad blockers block content after it has arrived at your device. Fortunately, my Pi-hole was blocking ads before they were downloaded. At the same time, I was collecting information on DNS queries and blocked requests. So I could at least find some evidence of who was using our bandwidth.

After a few minutes of viewing reports, I noted that our new content streaming service might be the culprit. But when we cut the cord on cable TV, we had switched to YouTube TV (YTTV) on a new Roku device. And when I saw that device on the ‘big hitter’ list, I knew to dive deeper. I spent a few too many hours ensuring that my new Roku would not be downloading ad content. And after a few attempts, I’ve finally gotten the Pi-hole to block most of the new advertising sources. After all, why would I want to pay traffic fees for something that I didn’t even want!

The Price Of Freedom Is Eternal Vigilance

As is often the case, the first solution did not solve the real problem. Like President G.W. Bush in Gulf War II, I had prematurely declared success.  So I started to look deeper. It would have helped if I had detailed data on just which devices (and clients) were using what amounts of bandwidth.  But I didn’t have that data. At least, not then. Nevertheless, I had a sneaking suspicion that the real culprit was still the new content streamer.

After a whole lot of digging through Reddit, I learned that my new Roku remote did not actually shut off the Roku. Rather, their ‘power’ button only turned off the television set. And in the case of YouTube TV, the app just kept running. Fundamentally, we were using the Roku remote to turn the TV off at night – while the Roku device itself kept merrily consuming our data on a 7×24 basis.

The solution was simple: we had to turn off YouTube TV when we turned off the TV. It isn’t hard to do. But remembering to do it would be a challenge. After all, old habits do die hard. So I took a piece of tech from the electrical monopoly (ConEd) to solve a problem with the rapacious Internet provider.  A few months ago, we had an energy audit done. And as part of that audit, we got a couple of TrickleStar power strips. I re-purposed one of those strips so that when the TV was turned off, the Roku would be turned off as well.

What’s Next?

Now that we have solved that problem, I really do need to have better visibility on those things that can affect our monthly bill. Indeed, the self-imposed ‘broadband haircut’ is something that I must do all of the time. Consequently, I need to know which devices and applications are using just how much data. The stock firmware from Netgear provides no such information. Fortunately, I’m not running stock firmware. By using DD-WRT, I do have the ability to collect and save usage data.

To do this, I first need to attach an external USB  drive to the router. Then I need to collect this data and store it on the external drive. Finally, I need to routinely analyze the data so that I can keep on top of new, high-bandwidth consumers as they emerge.

Bottom Line

Economics kicked off this effort. Data analysis informed and directed this effort. With a modest investment (i.e., Pi-hole, DD-WRT, an SSD drive, and a little ingenuity), I hope to save over a thousand dollars every year.  And I am not alone. More and more people will demand a change from their operators – or they will abandon their operators altogether.

If you want to perform a similar ‘broadband haircut’, the steps are easier than they used to be. But they are still more difficult than they should be. But there is one clear piece of advice that I would offer: start planning your cable exit strategy.