Congestion on the Last Mile

It has long been recognized that networked services contain weak-link vulnerabilities. That is, the performance of any frontier device depends on the performance of every contributing component and service. This column focuses on one such phenomenon, which goes by the label “congestion.” No, this is not a new type of allergy, but, as with a bacteria, many users want to avoid it, especially advanced users of frontier network services. Congestion arises when network capacity does not provide adequate service during heavy use.

Congestion slows down data delivery and erodes application performance, especially for time-sensitive apps such as movies, online videos, and interactive gaming. Concerns about congestion are pervasive. Embarrassing reports about broadband networks with slow speeds highlight the role of congestion. Regulatory disputes about data caps and pricing tiers question whether these programs limit the use of data in a useful way. Investment analysts focus on the frequency of congestion as a measure of a broadband network’s quality. What economic factors produce congestion? Let’s examine the root economic causes.