It’s common to hear that oversubscription is the cause of slow broadband—but what does that mean? Oversubscription comes into play in any network when the aggregate subscribed customer demand is greater than the available bandwidth.

The easiest way to understand the concept is with an example. Consider a passive optical fiber network where up to 32 homes share the same neighborhood fiber. In the most common GPON technology, the customers on one of these neighborhood nodes (called a PON) share a total of 2.4 gigabits of download data.

If an ISP sells a 100 Mbps download connection to 20 customers on a PON, then in aggregate, those customers could use as much as 2 gigabits of data, meaning there is still unsold capacity—meaning that each customer is guaranteed the full 100 Mbps connection inside the PON. However, if an ISP sells a gigabit connection to 20 customers, then 20 gigabits of potential customer usage have been pledged over the same 2.4-gigabit physical path. The ISP has sold more than eight times more capacity to customers than is physically available, and this particular PON has an oversubscription ratio of 8.

When people first hear about oversubscription, they are often aghast—they think an ISP has done something shady and is selling people more bandwidth than can be delivered. But in reality, an oversubscription ratio recognizes how people use bandwidth. It’s highly likely in the example of selling gigabit connections that customers will always have access to their bandwidth.

ISPs understand how customers use bandwidth, and they can take advantage of the real behavior of customers in deciding oversubscription ratios. In this example, it’s highly unlikely that any residential customer ever uses a full gigabit of bandwidth—because there is almost no place on the web that where a residential customer can connect at that speed.

But more importantly, a home subscribing to a gigabit connection mostly doesn’t use most of the bandwidth they’ve purchased. A home isn’t using much bandwidth when people are asleep or away from home. The residents of a gigabit home might spend the evening watching a few simultaneous videos and barely use any bandwidth. The ISP is banking on the normal behavior of its customers in determining a safe oversubscription ratio. ISPs have come to learn that households buying gigabit connections often don’t use any more bandwidth than homes buying 100 Mbps connections—they just complete web transactions faster.

Even should bandwidth in this example PON ever get too busy, the issue is likely temporary. For example, if a few doctors lived in this neighborhood and were downloading big MRI files at the same time, the neighborhood might temporarily cross the 2.4-gigabit available bandwidth limit. Since transactions happen quickly for a gigabit customer, such an event would not likely last very long, and even when it was occurring, most residents in the PON wouldn’t see a perceptible difference.

It is possible to badly oversubscribe a neighborhood. Anybody who uses a cable company for broadband can remember back a decade when broadband slowed to a crawl when homes started watching Netflix in the evening. The cable company networks were not designed for steady video streaming and were oversubscribing bandwidth by factors of 200 to one or higher. It became routine for the bandwidth demand for a neighborhood to significantly surpass network capacity, and the whole neighborhood experienced a slowdown. Since then, the cable companies have largely eliminated the problem by decreasing the number of households in a node.

As an aside, ISPs know they have to treat business neighborhoods differently. Businesses might engage in steady large bandwidth uses like connecting to multiple branches, using software platforms in the cloud, using cloud-based VoIP, etc. An oversubscription ratio that works in a residential neighborhood is likely to be far too high in some business neighborhoods.

To make the issue even more confusing, the sharing of bandwidth at the neighborhood level is only one place in a network where oversubscription comes into play. Any other place inside the ISP network where customer data is aggregated and combined will face the same oversubscription issue. The industry uses the term chokepoint to describe a place in a network where bandwidth can become a constraint. There is a minimum of three chokepoints in every ISP network, and there can be many more. Bandwidth can be choked in the neighborhood as described above, can be choked in the primary network routers that direct traffic, or choked on the path between the ISP and the Internet. If any chokepoint in an ISP network gets over-busy, then the ISP has oversubscribed the portion of the network feeding into the chokepoint.