Re: Give Me A Break in http://www.dslreports.com/forum/r19701110 en Fri, 04 Dec 2009 14:44:19 EDT Fri, 04 Dec 2009 14:44:19 EDT Re: Give Me A Break http://www.dslreports.com/forum/remark,19720565 devnuller :
said by Ahrenl See Profile :

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.
It is true that more bandwidth=more revenue=reinvest portions into capacity growth for the first mile and middlemen ISPs (who charge based on peek usage).

I think that is the point of a need to charge based on usage tiers (not bill-by-the-byte). If there is a drastic increase in demand, the revenue will follow to address the capital demands.]]> http://www.dslreports.com/forum/remark,19720565 Tue, 01 Jan 2008 19:14:30 EDT Re: Give Me A Break http://www.dslreports.com/forum/remark,19719115 Ahrenl :
said by devnuller See Profile :

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 See Profile :

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. ]]> http://www.dslreports.com/forum/remark,19719115 Tue, 01 Jan 2008 14:09:10 EDT Re: Give Me A Break http://www.dslreports.com/forum/remark,19718882 devnuller :
said by Ahrenl See Profile :

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]]> http://www.dslreports.com/forum/remark,19718882 Tue, 01 Jan 2008 13:24:22 EDT Re: Give Me A Break http://www.dslreports.com/forum/remark,19717797 bicker : There is a relationship between peak traffic and traffic, especially on the local level. ]]> http://www.dslreports.com/forum/remark,19717797 Tue, 01 Jan 2008 07:47:20 EDT Re: Give Me A Break http://www.dslreports.com/forum/remark,19717428 KrK : Then there's no problem, as there's no need to go to pay-by-byte billing.]]> http://www.dslreports.com/forum/remark,19717428 Tue, 01 Jan 2008 02:34:51 EDT Re: Give Me A Break http://www.dslreports.com/forum/remark,19712527 devnuller : "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.]]> http://www.dslreports.com/forum/remark,19712527 Mon, 31 Dec 2007 09:23:56 EDT Re: Give Me A Break http://www.dslreports.com/forum/remark,19712131 Ahrenl : 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. ]]> http://www.dslreports.com/forum/remark,19712131 Mon, 31 Dec 2007 06:00:39 EDT Re: Give Me A Break http://www.dslreports.com/forum/remark,19711741 KrK : 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.]]> http://www.dslreports.com/forum/remark,19711741 Mon, 31 Dec 2007 01:56:12 EDT Re: Give Me A Break http://www.dslreports.com/forum/remark,19702448 devnuller :
said by KrK See Profile :

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.]]> http://www.dslreports.com/forum/remark,19702448 Sat, 29 Dec 2007 08:34:06 EDT Re: Give Me A Break http://www.dslreports.com/forum/remark,19702412 espaeth :
said by Ulmo See Profile :

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!
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]]> http://www.dslreports.com/forum/remark,19702412 Sat, 29 Dec 2007 08:21:16 EDT Re: Give Me A Break http://www.dslreports.com/forum/remark,19702036 Ulmo :
said by devnuller See Profile :

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.]]> http://www.dslreports.com/forum/remark,19702036 Sat, 29 Dec 2007 02:19:23 EDT Re: Give Me A Break http://www.dslreports.com/forum/remark,19701903 Ulmo :
said by nasadude See Profile :

you don't appear to actually understand the statement you are characterizing.

Karl's point is simple:

various entities with vested interests have been warning of the coming "bandwidth crunch" for well over a year now - h/w vendors hype it to sell network management gear; investors and ISPs hype it as an excuse to charge more or get regulatory relief (these definitely sound like agenda based rhetoric). One sure-fire way to solve the "bandwidth crunch" IS TO ADD MORE BANDWIDTH. If these companies profits are above normal and they are paying their CEOs and other executives tens of millions of $$, one would certainly think they could afford to ADD MORE BANDWIDTH.

unfortunately, their agenda is to scare politicians and regulators into giving them more power to milk consumers of even more money.
Sorry I didn't have time to edit my quote of you, but I think you characterized the good parts that I agree with Karl about correctly, except for the wild prediction that they have enough money in all cases to meet any bandwidth demand -- I'd personally temper that a bit, but certainly not much (since lack of supply is acceptable within small ranges of lack). I still disagree with him (Karl) on the point of the ability of usage-based billing to work correctly depending upon implementation. That it is used as a scare tactic is not surprising, since there aren't ample examples of it being properly implemented (i.e., not slanted to favor some people, by heavily shifting resources from some users to others, overcharging (gouging) many, etc.. ... i.e., close-to-cost-based would be best). I said that in my other post.]]> http://www.dslreports.com/forum/remark,19701903 Sat, 29 Dec 2007 01:29:21 EDT Re: Give Me A Break http://www.dslreports.com/forum/remark,19701778 anon : No, one million percent is an accurate assessment.]]> http://www.dslreports.com/forum/remark,19701778 Sat, 29 Dec 2007 00:55:52 EDT Re: Give Me A Break http://www.dslreports.com/forum/remark,19701110 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.]]> http://www.dslreports.com/forum/remark,19701110 Fri, 28 Dec 2007 22:11:54 EDT Re: Give Me A Break http://www.dslreports.com/forum/remark,19700854 devnuller :
said by KrK See Profile :

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.]]> http://www.dslreports.com/forum/remark,19700854 Fri, 28 Dec 2007 21:15:33 EDT Re: Give Me A Break http://www.dslreports.com/forum/remark,19700368 KrK : Nope. Those prices are for the T-1 connection. What does the actual BANDWIDTH cost.

I'm positive it's not $100 a meg.]]> http://www.dslreports.com/forum/remark,19700368 Fri, 28 Dec 2007 19:33:17 EDT Re: Give Me A Break http://www.dslreports.com/forum/remark,19697096 devnuller : Rhetoric almost always uses statistics and real facts.

BUT rhetoric puts them together in an inflammatory fashion to infer relationships between the statistics and facts which really doesn't exist. This is designed to generate an emotional vs. logical understanding of the situation by people that really don't understand the entire story.

Think political attack ads, net-neutrality debates, or any other agenda based information. They all have real facts and statistics behind them, but are put together in a way to push a specific message.]]> http://www.dslreports.com/forum/remark,19697096 Fri, 28 Dec 2007 08:27:04 EDT Re: Give Me A Break http://www.dslreports.com/forum/remark,19697008 devnuller :
said by KrK See Profile :

$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.]]> http://www.dslreports.com/forum/remark,19697008 Fri, 28 Dec 2007 07:49:21 EDT Re: Give Me A Break http://www.dslreports.com/forum/remark,19695410 KrK : $100 a meg. Why do I find that number to be way, way off.]]> http://www.dslreports.com/forum/remark,19695410 Thu, 27 Dec 2007 21:14:10 EDT Re: Give Me A Break http://www.dslreports.com/forum/remark,19695394 KrK :
said by devnuller See Profile :

said by Karl Bode See Profile :

But are carriers like AT&T and Comcast really struggling so badly under the current pricing model, that they can afford multi-million-dollar CEO bonuses and fantastic profits but can't upgrade their infrastructure?
The above statement is nothing more than agenda based rhetoric.
There's only one problem. Unlike rhetoric, which is mostly false, that question states proven FACTS that are public information and therefore impossible to refute.
--
"Regulatory capitalism is when companies invest in lawyers, lobbyists, and politicians, instead of plant, people, and customer service." - former FCC Chairman William Kennard (A real FCC Chairman, unlike the current Corporate Spokesperson in the job!)]]> http://www.dslreports.com/forum/remark,19695394 Thu, 27 Dec 2007 21:11:30 EDT Re: Give Me A Break http://www.dslreports.com/forum/remark,19694520 bicker :
said by devnuller See Profile :

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.]]> http://www.dslreports.com/forum/remark,19694520 Thu, 27 Dec 2007 18:29:55 EDT Re: Give Me A Break http://www.dslreports.com/forum/remark,19694389 devnuller :
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.]]> http://www.dslreports.com/forum/remark,19694389 Thu, 27 Dec 2007 18:04:34 EDT Re: Give Me A Break http://www.dslreports.com/forum/remark,19692865 anon : I hate to tell you you're wrong but you're wrong very, very wrong. You need only look north of the American border to Canada a country that spends nothing to upgrade any and all infrastructures. The Canadian solution is speed throttling and traffic shaping as well as charging about one million percent extra for bandwidth over and above the cost to the provider.]]> http://www.dslreports.com/forum/remark,19692865 Thu, 27 Dec 2007 13:50:00 EDT Re: Give Me A Break http://www.dslreports.com/forum/remark,19692651 bicker : False. CEO salaries are the biggest red herring possible. ]]> http://www.dslreports.com/forum/remark,19692651 Thu, 27 Dec 2007 13:15:50 EDT Re: Give Me A Break http://www.dslreports.com/forum/remark,19692446 nasadude :
said by devnuller See Profile :

said by Karl Bode See Profile :

But are carriers like AT&T and Comcast really struggling so badly under the current pricing model, that they can afford multi-million-dollar CEO bonuses and fantastic profits but can't upgrade their infrastructure?
The above statement is nothing more than agenda based rhetoric.

....
you don't appear to actually understand the statement you are characterizing.

Karl's point is simple:

various entities with vested interests have been warning of the coming "bandwidth crunch" for well over a year now - h/w vendors hype it to sell network management gear; investors and ISPs hype it as an excuse to charge more or get regulatory relief (these definitely sound like agenda based rhetoric). One sure-fire way to solve the "bandwidth crunch" IS TO ADD MORE BANDWIDTH. If these companies profits are above normal and they are paying their CEOs and other executives tens of millions of $$, one would certainly think they could afford to ADD MORE BANDWIDTH.

unfortunately, their agenda is to scare politicians and regulators into giving them more power to milk consumers of even more money.]]> http://www.dslreports.com/forum/remark,19692446 Thu, 27 Dec 2007 12:39:33 EDT Re: Give Me A Break http://www.dslreports.com/forum/remark,19691933 Kearnstd : well with what their CEOs take home they must be able to afford it.
--
[65 Arcanist]Filan(High Elf) Zone: Broadband Reports]]> http://www.dslreports.com/forum/remark,19691933 Thu, 27 Dec 2007 10:59:18 EDT Re: Give Me A Break http://www.dslreports.com/forum/remark,19691676 jvanbrecht : The problem is not that they started with pay as you go, its the fact that the international telcom providers (ie the US providers) charge by the byte for international traffic. No company can cover their costs while providing their customers with unlimited all you can eat for one price. ]]> http://www.dslreports.com/forum/remark,19691676 Thu, 27 Dec 2007 10:15:48 EDT Re: Give Me A Break http://www.dslreports.com/forum/remark,19691538 devnuller :
said by Karl Bode See Profile :

But are carriers like AT&T and Comcast really struggling so badly under the current pricing model, that they can afford multi-million-dollar CEO bonuses and fantastic profits but can't upgrade their infrastructure?
The above statement is nothing more than agenda based rhetoric.

All ISPs are upgrading their infrastructure to keep ahead of the annual curve. The issue is pointing to a possible tipping point of the Internet with HD video and high bandwidth p2p. If growth drastically changed (similar to the introduction of HTML/Mosaic and the change to a 95%ile billing in the 90's) things will change (billing and technology innovation)

In the early 90's when flat rate commercial changed to 95%ile billing, it came with resistance (by the top business users) and then worked out fine. Usage Tiers will most likely do the same thing.]]> http://www.dslreports.com/forum/remark,19691538 Thu, 27 Dec 2007 09:40:25 EDT Give Me A Break http://www.dslreports.com/forum/remark,19691422 Persona : I'm sure Elaine Kamarck provides some thought provoking, perhaps profound lectures at her real job, but her attempts to speak to the masses is simply a bad joke. England based their technology on pay as you go (telecom) and have never truly recovered from that stupid move.]]> http://www.dslreports.com/forum/remark,19691422 Thu, 27 Dec 2007 09:03:07 EDT