devnuller
join:2006-06-10
Hollis, NH
 ·Verizon Online DSL
 ·Charter Pipeline
edit:
December 27th, @06:08PM
| reply to Bellundo
Re: Give Me A Break
said by Bellundo :
charging about one million percent extra for bandwidth over and above the cost to the provider.
Let's do the math on that. Average cost / mb for ISPs vary depending on volume. If you were to buy 6mb from say Cogent in a hosting facility they would charge you about $100 / 1Mbps per month. A T1 (1.5Mbps oversubscribed upstream) costs on average $300 / month.
But if you were to buy say 10,000 Mbps and carve it up you could pay as low as $20 / Mbps. This equals a cost to the provider anywhere between $120 to $600 per month to support your usage of 6Mbps running full out for only 5% of the month (95%ile billing that commercial uses today)
What people pay is far lower than wholesale market rates for bandwidth. This is due the ISPs ability to share the cost among average and heavy users. Upgrading the infrastructure to allow everyone to use 6Mbps continuously is unrealistic.
Unfortunately this math conflicts slightly with your analysis of 1,000,000% extra for bandwidth. |
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bicker
join:2007-05-10
Burlington, MA
| said by devnuller  :What people pay is far lower than wholesale market rates for bandwidth. This is due the ISPs ability to share the cost among average and heavy users. In other words, the average users subsidize the heavy users. That differential will eventually vanish. As different communications technologies come together -- actually, as mainstream communications technologies (television, telephone) find themselves riding on HSI more and more, average users will become heavy users, and so everyone will have to start paying for what they use. |
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KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK | reply to devnuller
$100 a meg. Why do I find that number to be way, way off. |
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devnuller
join:2006-06-10
Hollis, NH
·Verizon Online DSL
·Charter Pipeline
| said by KrK :$100 a meg. Why do I find that number to be way, way off. Because you have not had to buy commercial bandwidth before. That number is what you would expect to pay AT&T, Level3, etc if you purchased bandwidth in the 10Mbps range. You see the $300 for a T1 ads on this site all the time. That price is more like $200 / Mbps. |
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KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK | Nope. Those prices are for the T-1 connection. What does the actual BANDWIDTH cost.
I'm positive it's not $100 a meg. |
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devnuller
join:2006-06-10
Hollis, NH
·Verizon Online DSL
·Charter Pipeline
| said by KrK :I'm positive it's not $100 a meg. Based on what? I just quoted you volume based sources and prices. What do you think the difference is between a T1 and a clocked down Ethernet connection is?
Not sure I can answer the question to your satisfaction as your uninformed, yet preconceived number is something that is unrealistic. Please provide some actual information that you have on real world wholesale ISP pricing based on volume commitments and location. |
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KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK
·Cox HSI
·AT&T Southwest
| Your number is simply INSANE. I am positive you're talking about the PIPE not the USAGE.
If we take your argument that 1MB costs $100, that means if you download say SP2 that you just cost your ISP $4k. There's no way.
Bandwidth is cheap. |
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Bellundo
@teksavvy.com | reply to devnuller
No, one million percent is an accurate assessment. |
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Ulmo
join:2005-09-22
San Jose, CA
·Comcast
·SONIC.NET
| reply to devnuller
said by devnuller :usage of 6Mbps running full out for only 5% of the month (95%ile billing that commercial uses today) Could you clarify that? What is 95 percentile billing? Here's what I found in Google so far:
»www.epidirect.com/Bandwidth/Unde···tile.htm
Are those representative?
So, in other words, they ignore 99.999% of your use? That seems dumb. Why not count it? I've created metrics that do stuff like this, but what help is this particular metric (that ignores most of your use)? Is it outdated or overapplied?
Reading their example, I see that:
1. (Top) 5% is ignored. Ignorance is bad.
2. (Bottom) approaching 95% is ignored after that. More ignorance is worse.
Almost 100% of your use is ignored; only one essoteric sliver of your use is considered. That is insane. I would never consent to a charge plan like that!
They ought to do flat-per-use charging, not log scale or anything obtuse like that.
For instance:
* You are charged the sum of the following:
A. $Y per Z of circuit bits per second capable.
E.g., you have a 1 Gigabit Ethernet connection (10^9 bits/second each way full duplex), and you are charged $1 per day for it ($1 per Gigabit per second bandwidth connection per day). That is about $365.24 per year. They could even charge you just a one-time flat fee of $7,283 to install, once. (Or, what about only $823.28?) Different options abound when you do cost-based charging rather than insane subsidizing.
B. $W per actual X bits used in bandwidth out the end of that connection (they could charge different rates for inbound and outbound, but I'll assume they're charged the same for this example).
E.g., you use 100 terabits (of your ~63.1 available petabits, or half that each direction) in a year of usage, and you are charged approximately $10 per terabit, so that is a charge of $1,000 for usage per year, or $83 per month, in addition to the above charge for the connection.
No ignorance; every bit counted.
For comparison, but not that it matters (it could all be bursted in one day I guess), is the average use of the circuit would be ~3,168,896 bits per second (of both directions), so half of that is ~1,584,448 bits per second, which is 0.158% of your gigabit ethernet connection's speed in one direction, or 0.317% of your gigabit ethernet connection's speed in one direction if all of the bits went the same direction.
If you had a 10 megabit/s connection, then that would be about an average of 32% of your connection used, once again, irrelevent, since you could use it all at the same time or not.
If the ISP was charged more for peak times and less for off-peak times, then they could pass those charges to you, but that doesn't make sense; they ought to just charge one rate for every bit at every level. We don't need to subsidize the peak or bursting users when we're just non-peak and non-bursting profiled users. If the peak based or the bursting based users want more bandwidth for their peaks or bursts, then they should pay for it, not us, the constant users. Anyway, the bursters get to benefit from an aggregate of bursting users all paying for things together. The peak users are the ones that might bitch and moan; they are the ones that ought to either shift their use elsewhere (like a service that has sufficient peak availability), use less, or use at a different time. There is no need for us to subsidize them.
The cost per bit can be calculated by the ISP on a daily basis. M bits passed this connection today, and the connection costs O dollars per day in total installation and maintenance costs over its entire life averaged out, so the cost per bit today is $O/M. That is, the more bits that passed, the less each bit costs. Then, a margin level (profit) is applied to that amount (let's say 2%-15%), and then that amount is the charge applied that day. Since that is hard to track by users, there would have to be a buffer: instead of per day, it would be done per month. That is, cost per circuit per month is $N, and the bits used in a month is P bits per month, so $N/P times multiplier (say 15%) is how much bandwidth costs the next month, as an estimate based upon the previous month. The ISP could quote you double according to previous month for your limiting budget metrics, then charge you actual rate for that real month's usage, too; that would be pretty simple. The ISP could eat any undercharges due to overdouble growth rates for one month, and they can temporarily surcharge the rate to adjust, realigning within one month.
That's a lot better than "percentile" charging, which is *TOTALLY* bogus. |
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espaeth
Misanthrope
Premium
join:2001-04-21
Minneapolis, MN
 ·voip.ms
·Callcentric
·VoiceStick
·ViaTalk
·Comcast
·Embarq
| said by Ulmo :Could you clarify that? What is 95 percentile billing? Here's what I found in Google so far: » www.epidirect.com/Bandwidth/Unde···tile.htmAre those representative? So, in other words, they ignore 99.999% of your use? That seems dumb. Why not count it? I've created metrics that do stuff like this, but what help is this particular metric (that ignores most of your use)? Is it outdated or overapplied? Reading their example, I see that: 1. (Top) 5% is ignored. Ignorance is bad. 2. (Bottom) approaching 95% is ignored after that. More ignorance is worse. Almost 100% of your use is ignored; only one essoteric sliver of your use is considered. That is insane. I would never consent to a charge plan like that! The problem is you are thinking of it in terms of quantity (number of megabytes or gigabytes) when 95th percentile measurement is about rate. Your key limitation on the ability to deliver network capacity is the speed of your interfaces, which is again determined by a rate in bits per second.
95th percentile calculation is all about "What is your peak 5-minute average utilization most of the time?" This allows the carrier to determine how much capacity to build out, and how to bill their end-users for the bandwidth.
The calculation is done by taking a sample of the number of bits moved across an interface every 5 minutes. Every 5 minutes the difference between the numbers is divided across the 5 minute interval to get an averaged bits per second rate. This evens out spikes from short duration transfers. At the end of the month the rate samples are lined up from greatest to least, the top 5% are discarded, and the next highest rate number is used for billing. So if your 95% value is 2.2mbps, you would be billed for 2.2mbps of transfer rate in addition to your access charges.
The reason you do this instead of billing by quantity is that from a resource utilization standpoint, someone who transfers 300GB in one day consumes more of a circuit than someone who transfers 300GB over 30 days. To move that quanitity of traffic over 30 days would only require 1 mbps of traffic, but to move it in a day would require nearly 28 mbps.
This is the de facto standard for Internet billing, and EVERY carrier bills this way. ATT, Verizon/MCI, Sprint, Level(3), Savvis, Qwest, TimeWarner Telecom, TeliaSonera, GlobalCrossing, Cogent, and every other carrier I haven't mentioned.
-Eric |
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devnuller
join:2006-06-10
Hollis, NH
·Verizon Online DSL
·Charter Pipeline
edit:
December 29th, @08:41AM
| reply to KrK
said by KrK :Your number is simply INSANE. I am positive you're talking about the PIPE not the USAGE. If we take your argument that 1MB costs $100, that means if you download say SP2 that you just cost your ISP $4k. There's no way. Bandwidth is cheap. You are making a lot of statements, but you really don't have any idea on how bandwidth is priced. It is usage, but not the way you think.
Wholesale bandwidth costs are billed on 95%ile peak usage. The usage is sampled every 5 min over the course of a month and the top 5% of samples are thrown away.
Example: Say you have a 6Mb pipe and are a heavy to average user. You can use the full 6Mb when needed to download SP2, email, gaming, occasional BT, web surf, etc. When your usage is plotted out over the month your 95%ile peak will be probably around 100K. This bandwidth cost is about $10 at $100/Mb. This is just the ISP costs and not the CRAN, CMTS, backbone, provisioning systems, email systems, etc.
Example2: You are a user that runs heavy P2P hosting with a multi-terabit drive array. You download more DVD videos, games, music, etc. than you can use and share them with the Internet at large. You sustain the 6Mb peak usage for more that 5% of the month (1.5days in total). This actually costs the ISP $120 / month at $20/Mb. This bandwidth costs is on top of all the other costs to support your connection. The $20 number is because the ISP buys connections at 10's of thousands of Mb. If you alone were to get a 6Mb service from an AT&T or Level3 in a carrier facility you WOULD pay close to $100/Mb and Example2 would be close to $600/month. |
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KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK | You're still talking about charging based of line capacity, however, not what transferring 1meg actually costs. And even $20 a meg is way, way too much. |
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Ahrenl
join:2004-10-26
North Andover, MA
 ·Verizon FIOS
edit:
December 31st, @06:01AM
| reply to espaeth
These rate charges are essentially setup to cover maintenance, profit margin, and future build-outs. Greater utilization of the network shouldn't materially increase the maintenance costs for the carrier's, but will substantially increase revenue available to increase the second two buckets. Therefore, in a competitve environment, rates should come down as utilization ticks up, at the same time as greater build-out revenue is generated.
I guess I don't see the problem. |
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devnuller
join:2006-06-10
Hollis, NH
·Verizon Online DSL
·Charter Pipeline
edit:
December 31st, @01:06PM
| reply to KrK
"Meg transfered" is not what dictates the cost of a network. An analogy would be how wide you build a highway. You don't build it for how many cars pass over it a day, you build it for how many at rush hour.
300Gb at 1Meg / second cost less than 300Gb at 6 Meg / second for 1/6th of the time. One has to build the infrastructure and pay the costs to sustain the 6Mb. Networks are built for peek usage, not total consumption. |
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KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK | Then there's no problem, as there's no need to go to pay-by-byte billing. |
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bicker
join:2007-05-10
Burlington, MA | There is a relationship between peak traffic and traffic, especially on the local level. |
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devnuller
join:2006-06-10
Hollis, NH
edit:
January 1st, @01:17PM
| reply to KrK
 I feel like I am talking to a 3 year old. Some concepts like this may be to advanced for Krk to understand. |
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bicker
join:2007-05-10
Burlington, MA
edit:
January 1st, @01:22PM
| said by devnuller :
I feel like I am talking to a 3 year old. Some concepts like this may be to advanced for Krk to understand. While I wouldn't care to speculate which is the case, if either, keep in mind that it is as likely, if not more likely, for someone to deliberately refuse to acknowledge something than to not understand it. |
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devnuller
join:2006-06-10
Hollis, NH
·Verizon Online DSL
·Charter Pipeline
| reply to Ahrenl
said by Ahrenl :Greater utilization of the network shouldn't materially increase the maintenance costs for the carrier's, but will substantially increase revenue available to increase the second two buckets. Greater utilization = more capital to add capacity = more maintenence costs for warentee's of that capital
Significantly greater utilization = lighting more fiber = significantly more capital = major router upgrades = more facility space = more power = more maintenence costs |
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Ahrenl
join:2004-10-26
North Andover, MA
·Verizon FIOS
| said by devnuller :Greater utilization = more capital to add capacity = more maintenence costs for warentee's of that capital More capital will be needed to add capacity, but I'm talking about the long haul resellers. They'll be earning greater revenue before more capital will be needed, thus providing the capital through retained earnings. Maintenance costs should only materially increase if you expanding the size of the network.
said by devnuller :Significantly greater utilization = lighting more fiber = significantly more capital = major router upgrades = more facility space = more power = more maintenence costs There's nothing new here from your last point. Again, we're not talking about last mile operators here. |
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