Slashdot Mirror
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.'"
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.
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.
Of course, if you don't agree you can always go start your ISP.
The 12 year olds approach to arguments.
> 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
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.
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 ?
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.