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ISPs 'Exaggerate the Cost of Data'
Barence writes "ISPs are wildly exaggerating the cost of increased internet traffic, according to a new report. Fixed and mobile broadband providers have claimed their costs are 'ballooning' because of the expense of delivering high-bandwidth services such as video-on-demand. However, a new report from Plum Consulting claims the cost per additional gigabyte of data for fixed-line ISPs is between €0.01-0.03 per GB. The report labels claims of ballooning costs a 'myth.'"
No fucking shit.
Note that this research was funded by the content providers (like skype) ISPs were asking to pay extra for the bandwidth their services use. I'm not pointing any fingers, but it's something to think about.
Another report by the same Institution concluded that water is wet, electricity is not magic, and that dinosaurs are in fact extinct. The results are still pending on if a duck weighs less than water though. But on a serious note, it's good to see people calling bollocks on these claims. It's not that these things aren't problems, it's that they inflate the cost estimates grossly and delay infrastructure upgrades purposely.
It's not only infrastructure. Not even starting at wages for workers and other recurring costs, ISP's have to pay each other to buy bandwidth from them. Only the tier 1 ISP's can get away with peering without extra costs.
On top of that, their payment model isn't $0.xx/GB of transfer, it's $xxxx per Gbps of bandwidth. If ISP buys too much bandwidth, it means it will sit there without being used, or it may be used in peak times and be just sitting there the rest ~20 hours of day.
Also, it requires there to be actual connectivity available - for example, my country as a whole has something like 30Gbps in/out. Still they're selling 100Mbps for customers to use. It's perfectly sure that if everyone would use that 100Mbps at once to download content off the country, it would not be enough. However, it works out because home users rarely need that kind of bandwidth 24/7.
If you want dedicated bandwidth that is guaranteed, then buy it. Just be willing to pay over $1000 a month for your 100Mbps line. This isn't new to anyone - it's the same in server hosting world too, but there it's more clearly marked if the bandwidth is shared or dedicated as it matters more and some people actually have real need and are willing to pay up to that $1000 a month for it. With home users, no one would do that.
You obviously don't understand that Plum Consulting is just pointing out that these companies are using price fixing. They all make an excuse, then all jack their rates. It's collaboration, which carries some hefty fines.
When you shop around for hosting, the price/GB can fluctuate wildly. Amazon's EC2 is almost at the top with $0.12/GB, but Cogent at $5/Mbit (~0.015/GB) is one of the cheapest for transit/paid traffic.
Even less? How about free, using peering agreements on internet exchanges? This way, providers like Hetzner can sell their bandwidth for even less, like 5-10TB included and â 6,90/TB after (â 0.0069/GB).
ISP's should just whine less and do their homework. I can understand small ISP's having trouble when leasing lines from the larger ones (article has Trimco vs BT as example), but the main problem is that the larger ISP's promote this "bandwidth is expensive" myth even harder...
We used to have this thing called Ma Bell that had the same problem: they amortized costs over decades. It worked.
It doesn't bother me too much that service providers would prefer a shorter timeframe in which to recapture their invested funds, but the problem is that they then want to keep charging the higher prices even after they do, make only modest further improvements, and rake in profits at insane rates. Where I live, cable Internet prices have been basically flat for more than a decade, and performance has maybe doubled in that time. It's hard to buy the crying when I know the bandwidth costs are dropping, the networks can handle it, and the companies are reporting record profits.
It's not only infrastructure. Not even starting at wages for workers and other recurring costs, ISP's have to pay each other to buy bandwidth from them. Only the tier 1 ISP's can get away with peering without extra costs.
If your ISP's business plan is to make up those costs on overage charges, I suggest you find a new ISP, as they will go bankrupt as soon as their customer base starts watching what they're doing.
That kind of cost, and everything else you mention in your post, is supposed to be budgeted for in your monthly tithe err... monthly subscription fees. Overage fees are just that... fees for going over the allotted amount of monthly usage. Those fees are completely unreasonable. At that point, it does not cost them $2.50/GB to deliver that data to you, because your monthly subscription fee has already covered the lion's share of those costs. It really does only cost $0.01/GB at that point, or at least, it should only cost that little if they're doing it right.
I've been saying the same thing for years - as soon as any technology reaches the stage where it becomes essential infrastructure, ownership should gradually transfer to the public. And to those of you who say, "What about capitalism and free enterprise", I say "What about all the tax breaks, government handouts, favourable legislation, and public rights-of-way that these 'free market' 'capitalist' companies took advantage of to get where they are?"
It strikes me that privatized infrastructure is like patents and copyrights in this regard. A period of full ownership and control is required in order to ensure a fair return on investment and to incentivize creation; after that period expires, the thing created belongs to the public. Everyone who complains about the screwed-up patent and copyright systems ought also to be complaining about the continued private, for-profit ownership of such things as communications infrastructure.
'The Economy' is a giant Ponzi scheme whose most pitiable suckers are the youngest among us and the yet-unborn.
I used to work tech support for an ISP. Its called over selling and they all do it. They make people fight for bandwidth and just make excuses that its peak hours instead of buying more bandwidth. Our company though refused to over sell. You could buy a line from our company and one from the company we got our lines from and I promise you. Your line would be down a lot, take forever to get fixed and not get max speed. You would buy the same line from my company and hit everything you paid for and get a tech support that would bend over backwards to help you with any problems you had even if it wasn't "our problem". When our peaks came close to hitting max bandwidth we bought more. Not so with all the major ISPs.. So this article is nothing new.
Of course, if you don't agree you can always go start your ISP.
The 12 year olds approach to arguments.
I just got a report from Webster, Webster and Cohen that their analysts find that bears are catholic and the pope shits in the woods.
Probably due to that new bear pope, Pope Maulington XXIII
Non impediti ratione cogitationus.
> their payment model isn't $0.xx/GB of transfer, it's $xxxx per Gbps of bandwidth. If ISP buys too much bandwidth, it means it will sit there without being used, or it may be used in peak times and be just sitting there the rest ~20 hours of day.
Actually its a combination of link speed and bandwidth used.
The majority of upstream links are billed based on the 95th percentile. This allows for your upstream to have more bandwidth then you require during average usage, but can handle your peak times without affecting your bill too much.
http://en.wikipedia.org/wiki/Burstable_billing
The overage charges aren't supposed to make them lots of money, it's supposed to keep heavy bandwidth users in control so that the rest of the network doesn't suffer. Also, it doesn't matter how much it actually costs to the ISPs at that point. Nowhere they say it costs them $2.50/GB, but that's the price they're billing from you if you use over something like 250GB a month, which most people won't. They're free to do so. You're also free to choose your provider. However, don't bitch if there are no providers that sell you at the price you want.
depends on the ISP... Bell Canada, for example, includes 2GB/month usage with their cheapest plan, and charges $2.50/GB for overage. That is obscene, and considering that they're charging you $30/mo for a 2mbit connection, there's no way you're going to convince me it actually costs them that much when I can get a 5mbit w/ 300GB/mo and $0.25/GB overage charge for $32/mo, and if I were willing to pay $37/mo, I could get 5mbit w/ no bandwidth cap at all, both from a different provider that uses the same network, meaning I'd be connected to the same port, with the same copper.
I run a wireless ISP in Texas. The cost of buying upstream bandwidth doesn't change much, it in fact gets cheaper per Mb/s as the pipes get huge. The real cost change is in delivery. The backbone between towers, and especially in the access points all have to be increased to accommodate the additional load. In some instances, the access points cannot technologically accommodate the load yet. The ISP model was designed on a over-subscription basis. In other words, you could have 10:1 users using a give bandwidth. With the advent of video like Netflix, this model is no longer going to be viable. We are seriously looking at having two different account types. One that will allow short video bursting, and one that will allow continuous video feeds. The latter account will cost much more than the former since it is what is driving the costs.
Water is wet.
This seems to be a general practice of business. Isn't that how the banks have been explaining minimum balance fees? It costs them so much to maintain these particular accounts that they are forced into charging onerous fees.
There is a T1 global back-bone that sells dedicated internet bandwidth at a flat rate of $1/mbit/month in 10gbit increments. That's about $1 for 316GB(bytes)/month. I'm sure a T1 ISP gets it cheaper than that.
Outside of of infrastructure costs, bandwidth is nearly free.
So lying to your customers is the only feasible way of doing business? Then the business has no business being in business. And who are you or anyone to dictate what people need at home? If you say you are selling something to someone, you better deliver, because even if you are not breaking the law explicitly, you are breaking a general moral law that most people in the world agree with that I have met. Over selling is straight up lying to your customer. Its not the only feasible way to do business. Our ISP did not do that. And is still in business.
Of course, if you don't agree you can always go start your ISP.
Sure, just as soon as I get the same billion dollar check from our government they all did to put in their networks back in the Clinton years.
You think they'd even let you do it if you could? Not likely.
"comparing a home pricing to business pricing is deceptive"
Residential Cable Internet: $60 for 18/2 250GB cap
Business Cable Internet: $100 for 18/2 no cap, uses separate fiber routes that have dedicated bandwidth(only shared bandwidth is on the cable infrastructure), ToS claims you get dedicated bandwidth 24/7, personal representative, no wait tech-support queue, 1 business day guaranteed service
That $40 sure gets you A LOT. I'm eventually upgrading, but it is an extra $40/month that I must come up with.
Countries outside of the U.S. have no problem offering high speed unlimited data at affordable prices without any of the problems that the U.S. carriers are claiming. And the best deals are often on mobile! And, yes, there is heavy audio and video traffic in other countries as well.
Plum Consulting claims the cost per additional gigabyte of data for fixed-line ISPs is between €0.01-0.03 per GB
Is that €0.03 or €0.0003 ?
Amortising costs over decades works for a telephone system. They transitioned the exchanges from loop-disconect to DTMF, but aside from that the wires laid in the '20s still work today. They've had almost a century to make back the initial (taxpayer subsidised) investment. The demands of an analogue voice channel have remained constant for that entire time.
When it comes to Internet access, the demand changes much more rapidly. In 2001, I had a 1Mb/s Internet connection, and it was the fastest that my ISP provided. Now I have a 10Mb/s connection and they've just finished deploying infrastructure to support 100Mb/s in my area. That's the third major upgrade that they've done in that time. They can't amortise the cost over decades, because the new infrastructure is obsolete after just one decade. I pay less for 10Mb/s as they were charging for 512Kb/s back then (much less if you include inflation), and for the cost of my 1Mb/s connection in 2001, they'll now sell me a 50Mb/s connection today.
I am TheRaven on Soylent News
That figure is the amount that I pay for data from my colo, but that assumes that the infrastructure already exists. If you have a cable network with 100Mb/s of bandwidth, then you can sell 10Mb/s connections to 10 people. If you've sold them to 5 people, then the cost of adding another customer is basically zero. You can probably get away with selling 10Mb/s connections to 100 or even 200 people if they have typical modest usage patterns, because each one will still be able to get 10Mb/s for the short periods that they saturate the line. If they start all using the connection at the same time, then you have no choice but to increase your overall network capacity. This means laying more fibre. The cost may still be under three eurocents per gigabyte, but that's amortised over the entire life of the new cable, which may be a decade (or more): the ISP has to pay for it all up front. This is where the increase in costs comes from. They have to make significant capital investments, they don't have a significant change in their operating expenses.
Which is exactly what's happening. The ISPs are badly oversubscribed because customers in the past were barely using the bandwidth they bought. They just wanted a faster download on occasion. Now they're all demanding streaming netflix in the evening hours and the telcos are having to increase the infrastructure bandwidth to keep up. This is especially true for cell service. You might have 4G speeds to the tower, but that tower is heavily oversubscribed
This is really their own fault for advertising high speed service and suddenly everyone is demanding that they provide it all the time.
No, the adult approach is to realize that in countries without a common-carrier law for ISPs, it's prohibitively expensive to start a new ISP, so effort is better spent getting better deals out of existing ISPs.
Oh come on, you think Bell is charging $13/gb overage just to "keep us in line" and not to line their pockets? If they wanted to keep users in line, they'd throttle or contact the account owner and advise them of the issue/threaten fees. Instead they're skipping those steps and laughing all the way to the bank.
Is power. And power had been fairly stable. Add to that the fact that newer routing gear isn't as power hungry as the old and you can see we are getting raked over the coals.
It's the same thing with telephony. The long distance market fell apart because the cost to carry the calls kept dropping with increased levels of automation. Now long distance is bundled in with the normal monthly cost of most phone plans wired or wireless.
And even wireless services, they're getting increasingly less expensive to provide too. But they'll try to charge all the market will bear.
And need I bring up banks that rely on some of the technologies above? Why do you pay a foreign ATM fee that's a full 30% of the average $20 withdrawal when we KNOW that the cost for the network transports are hundreths of a cent per transaction? The bottom dropped out, but banks being greedy, rapacious bastards, will charge all the market will bear.
I wish BT would just replace my crappy last mile already, as it maxes at 3.5Gbps at the moment cause it's crappy 70's copper that should have been replaced a decade ago.
I think everyone with a qualified head knows damn well that "start your own ISP and quit whining about the monopoly" has been stomped into the ground by EVERY OTHER ENTERPRENEUR that ALREADY TRIED IT in a given market.
If capitalism is so great and bad companies also go away, then why are many places still stuck with shitty service from an ISP that's been around forever?