Study: Google uses 21X more bandwidth than it pays for

Study: Google uses 21X more bandwidth than it pays for

Summary: 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.

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Does Google use more bandwidth than it pays for?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.

Read the full study here.

Precursor is an industry research and consulting firm, specializing in the converging techcom sector. Precursor offers rare forward-looking expertise and national credibility at the nexus of: capital markets, public policy and techcom industry change. www.precursor.com

NetCompetition.org is a pro-competition Internet forum funded by broadband companies. www.NetCompetition.org

Topics: Browser, Broadband, Google, Networking

Andrew Nusca

About Andrew Nusca

Andrew Nusca is a former writer-editor for ZDNet and contributor to CNET. During his tenure, he was the editor of SmartPlanet, ZDNet's sister site about innovation.

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110 comments
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  • Seems like a vested interest commissioned this study.

    What has googlebots copying web pages from websites got anything to do with consumer bandwidth?

    And the claim that google is copying certain websites every second is just plain nonsensical.

    With comments such as those I believe this was a commissioned by someone with a vested interest in removing the ruling that requires ISPs to treat all packets equally.

    Flawed study based on those two facts alone.

    And what is with the comment with youtube? If a user demands a youtube video then of course that video is going use the users bandwidth. I don't see how this is googles fault?
    Bozzer
    • Probably not a vested - commercial - interest.

      Google is among the large corporations, also including Microsoft, which are attempting to compel the public to fund its internet use. That's the main purpose and most significant effect of "net neutrality".

      Perhaps a public interest funded the study?

      Perhaps not. The public doesn't have sufficient funds invested in lobbying to counter the all the misleading statements.
      Anton Philidor
      • If you don't want to 'fund its internet use'...

        ..then don't use Google's services! Don't use Google search. Don't use GMail. Don't use YouTube or Picasa. Don't use Firefox. Then Google won't be using any of your precious bandwidth and you won't be 'funding' them a dime.
        jepzilla
        • I don't use...

          ... Google search, GMail, YouTube, Picasa, and FireFox. But even if I used all of them I wouldn't be paying Google. Not unless I clicked on an ad.

          But I would be paying Google if I shared the costs of the capacity used to provide its downloads. And that's the intention of the so-called "net neutrality" legislation.

          If Google pays the broadband companies for the resources it uses, fine. But Google is paying lobbyists $ millions to shift the costs to others, including me. And that should be opposed.
          Anton Philidor
          • No idea what you are talking about...

            Everyone pays for the bandwidth they use, in what they pay to their own ISP. Google pays for their connections to the internet just like every other company, and that is both for their outgoing requests and all incoming requests.

            The ISPs want to regain their walled gardens by charging external sites for access to their customers.

            Anyone who thinks this is a good idea is either smoking too much hash or is under the employ of the ISPs. Consumers have the right to surf to whatever site they wish, without the site incurring any more charges than they already pay to their own ISPs.

            Now if a business has a problem with THEIR server bandwidth being used excessively by Google's bots, then they can complain to Google and have their pages indexed less frequently. I think you'll find few businesses want to be indexed less frequently.
            jdriddle
          • What you talkin about Willis?

            Google pays for thier bandwidth just like everyone else does. Those opposing net neutrality at the folks who want to lock in the money. They want to limit your access so that your money stays with them. If they had a product that could compete on the open market they would not be trying to do that. This goes completely against what the internet is supposed to be. It is pretty obvious they are the folks who fund the this study and wrote the results before the study was done. I have to ask what are they trying to hide that they need to corral people into their little world?
            Al_nyc
        • Wireless account

          My Alltel account is $60/mo for 3.1g speed. I don't pay anybody but Alltel and I use Google for whatever I need and Gmail is my mail acct. I doubt if Alltel which is 13 bil in debt is paying Google for the time I use with their services or my bill would be like Verizon at $112
          atari8bit@...
          • RE: Wireless account

            I think you are getting ripped off by Alltel. My Verizon 20/5mbps runs me about $60 a month. I don't know where you are getting the $112 figure.

            And, BTW, did not Verizon just buy Alltel, or ws that just the wireless business?
            Lynne's Honey
          • I believe that is correct..

            if I remember my news items, that is. Verizon bought out Alltel. In fact I think I saw a note about it on my account site.

            I only pay .15 cents a month on my "[b]U[/b]" prepaid plan; I have to make one 15 cent call per month to keep from incurring a non-usage fee of arround 4 dollars. I wouldn't call that a ripoff, I've never found a better deal anywhere. I only use my cell phone for driving emergencies.

            I never needed it that much for IT business calls either, the contractor always provides the phone for that.
            JCitizen
        • Firefox and Google

          How is Firefox a Google service? Did something go down that I missed? Firefox ASAIK is open-source, and a descendant of Netscape.

          I remember Navigator 3.0 ... I loved Netscape Navigator so much. Until Firefox came along. Even still, Navigator is a great browser.
          midenginedrift
      • It is a vested interest interest study.

        nt.
        Bozzer
        • You're right. Should have realized.

          The broadband companies are acting in the public interest only coincidentally.

          But with the cost of lobbying, a self-interested public ally may be the best alternative to a self-interested exploiter of the public like (in this situation) Microsoft and Google.
          Anton Philidor
    • google DOES re-copy pages every second

      "[i]And the claim that google is copying certain websites every second is just plain nonsensical.[/i]"

      Not really... I'm not actually sure how rapidly it re-loads/archives pages it updates most rapidly but I know that even the content of my not-very-known blog on my very little-known homeserver (at http://salamanteri.homelinux.net/wordpress/ ) is updated on google within only couple minutes after I have posted a new entry there... So considering that I would find it rather surprising if te reloading rate of larger pages with constant updates were NOT in range of only second(s).

      Other than this I have very little to say on this subject except that people should remember that google does not pay back to society and people only in money but also by simply existing with it's high-value services available for everyone to use. Value of these services might easily be forgotten or under-estimated by bureaucrats.
      robsku
  • So, what you're basically saying is ...

    Google should in fact be paying, (and with the economy the way it is, may in fact end up paying), 21 * 244 million, or $5,124,000,000 a year for it's bandwidth ..

    Tell me THAT won't dip into it's profits ...

    Ludo
    Ludovit
    • That is not surprising

      seeing that Google wants the taxpayers to pick up the cost of opening up the airwaves for them.
      GuidingLight
      • Oops. meant to place that in general <nt>

        :(
        GuidingLight
  • The basic flaw...

    of this study is that it assumes the cost (cost of creating, maintaining and operating the infrastructure) of bandwidth is the same as the aggregate total of what all individual consumers are charged for internet access. This is like saying the wholesale price of milk per gallon is that same as what shoppers pay at the grocery or convenience store. This is totally moronic. Google would obviously pay wholesale prices for bandwidth. Consumers pay retail with tons of markup to cover marketing, billing, etc.

    A cheap solution that doesn't work is neither.
    Say What?
    say_what
    • Other flaw..

      If I stream a movie from google, this article seems to
      imply that google should be paying for all the band
      width, not me?

      It is a two party communication.
      jacksodj@...
      • One point

        The issue is, that yes, it is a two party communication, YOU, however, already ARE paying for your part of the communication, unless you are ganking internet service off someone else. You pay for net access somehow, so you are paying for the whole deal. And now companies like Google and M$ want the government, that is the collective "us" to pay for increasing broadband access, delivery and subsidize availability. Not them, who are the ones to profit most widely from the expansion, us, the tax payer. Sounds like the same thing that got Ma Bell in trouble. Make a heap of money off of a service that you got the government to pay to set up for you and that costs you very little to produce.
        shadowwalker1@...
        • We all benenfit.

          You seem to think that the consumer will not benefit from increased bandwidth. You are wrong. We will benefit.
          Al_nyc