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A Layman's Guide To Bandwidth Pricing
narramissic links to IT World's A Layman's Guide to Bandwidth Pricing, writing "Time Warner Cable has, for now, abandoned the tiered pricing trials that raised the ire of Congressman Eric Massa, among others. And, as some nice data points in a New York Times article reveal, it's good for us that they did. For instance, Comcast says it costs them $6.85 per home to double the internet capacity of a neighborhood. But the bit of the Times article that we should commit to memory is this: 'If all Time Warner customers decided one day not to check their e-mail or download a single movie, the company's costs would be no different than on a day when every customer was glued to the screen watching one YouTube video after another.'"
Read further into the article. The companies tell their shareholders that they're paying the same amount for the newest, fastest equipment that provides 50megabit connections as they did for the equipment for 6 megabit, but they're charging a couple times more for it than they've charged for their highest internet in the last 5 years. Their profit margins are solid but the amount they invest in the networks is falling. This at a time when youtube is drawing more and more bandwidth and sites like Hulu are becoming more popular. It's a pretty solid case of the ISPs milking their monopolies for all they're worth.