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| Quoted markup % is pure fantasy capped between 5-40GB, then charged $1 for every additional gigabyte. Given that's a 1,000-1,500% markup over the price Time Warner Cable pays for bandwidth That markup being quoted is pure hype. Sure bytes bought from internet backbone providers are much cheaper than $1/GB. But the cost to deliver a GB to the last mile is much greater than purchasing it for the backbone. All the local infrastructure costs(splitting nodes; upgrading electronics; maintaining extra infrastructure; etc makes the quoted markup a joke.
There is also the main purpose of a cap with HIGH overage charges - to discourage users from exceeding the cap at all. It isn't to make a lot of extra money.
And when last mile infrastructure is ultimately enhanced(say by Docsis 3), the cap can be raised considerably. But even then, there will be the need to cap some abusive customers. So overage charges will still exist even with new higher caps.
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4 edits | quote:
That markup being quoted is pure hype. Sure bytes bought from internet backbone providers are much cheaper than $1/GB. But the cost to deliver a GB to the last mile is much greater than purchasing it for the backbone.
It's still nowhere near $1/gigabyte, and there's other sources of income (ads, DNS redirection, etc.) you're intentionally ignoring because that's your job and/or personal socio-economic proclivity. The cost per gigabyte is often ten cents, or even pennies. To be GENEROUS, at seven cents per, 40GB is less than than three bucks per month, but under TWC's system you'd be paying $40. Nice markeup. GREAT profit, even after you've tacked on crap offshored support, administrative assistant Betty and Britt's new boat.
Even if this is about deterring excessive use and not profit (which, with such low caps, it's about BOTH), they're shooting that concept in the foot by making the caps so low in the age of HD video. A premium tier with a cap of 40GB? If they implement this system, they'll have to adopt a much higher definition of excessive or face being laughed out of the market.
I know because you invest in these companies you're eager to see this model implemented Tom, but you'll have to try harder than that. Fantasy/hype/joke? $1 per GB is RAPE. And rape just isn't funny. | |
iansltx
join:2007-02-19
Golden, CO
kudos:2 Reviews:
 ·Comcast
| reply to fAcEtIOUs
Backbone bandwidth is sub-penny-per-GB. Heck, Comcast and TWC peer at places so it's practically free. THere are just infrastructure costs. Which probably raise the price to a whopping 10-15 cents per GB, tops. So you're still looking at a very large markup. Most of the costs aren't per GB, they're fixed costs. I have no problem with paying a 100-200% markup on backbone prices, then paying my share of fixed costs for the last mile. Mark that up a bit, too, bt don't say that the cost to transfer one masly gig over your network is any more than a few cents. I took Econ! | |
| reply to Karl Bode
said by Karl Bode:Even if this is about deterring excessive use and not profit, they're shooting that concept in the foot by making the caps so low in the age of HD video. A premium tier with a cap of 40GB? If they implement this system, they'll have to adopt a much higher definition of excessive or face being laughed out of the market. I agree that TWC's caps are too low. But I do say caps are needed, and like I have always said, and now it looks like most of the ISPs are starting to agree with me, that metered broadband is inevitable. The only thing left to discuss will be what type of metered charges will be implemented.
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 espaethDigital PlumberPremium,MVM
join:2001-04-21
Minneapolis, MN
kudos:2
 ·Clear Wireless
| reply to Karl Bode
said by Karl Bode:It's still nowhere near $1/gigabyte, and there's other sources of income (ads, DNS redirection, etc.) you're intentionally ignoring because that's your job and/or personal socio-economic proclivity. The cost per gigabyte is often ten cents, or even pennies. The assumptions you are making to arrive at this number are just flat out wrong. It's like saying if it takes 1 woman 9 months to make a baby, 9 women can make a baby in 1 month. Sure, it seems mathematically feasible, but the underlying logic to arrive at that conclusion is faulty.
The number is based on the cost to deliver bandwidth on a single connection at a centralized location at a large data rate. To assume those same numbers apply when talking about millions of low-speed connections (relative to the head-end) scattered throughout the US is ridiculously foolish. You're completely ignoring the costs of the network infrastructure to get the bits from that handful of head-end circuits to thousands/millions of homes.
By your argument, bottled water should be $0.10 -- because it's nearly free to get it from whatever municipal water system it is likely sourced from. Nevermind the material costs for the bottle, the costs to run the bottling plant, the transportation costs to get it from the bottling plant to retailers, the operation costs for the building of the retailer that it goes to, including generating a paycheck to the person selling you that bottle of water.
It's only that cheap if you completely ignore the rest of the infrastructure. | |
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4 edits | By your argument, bottled water should be $0.10 -- because it's nearly free to get it from whatever municipal water system it is likely sourced from. Now that you mention it....It's only that cheap if you completely ignore the rest of the infrastructure. Sorry, including everything, $1/GB is still rape. Are you seriously suggesting that's a reasonable cost for consumer bandwidth in the age of HD video?Yoo assume those same numbers apply when talking about millions of low-speed connections (relative to the head-end) scattered throughout the US is ridiculously foolish. Yeah, unless you're investing in, or working in the industry, for sure. I understand that to somebody whose mortgage or retirement benefits are paid by these changes, a $1-1/5k percentage markup in the cast of an already very profitable service is the most reasonable concept since the invention of the fork. That doesn't magically dissipate the foundations of reason....
Sorry, I'd love to sit and chat with the flood of industry employees and investors who'll now tell me that raping consumers is a matter of national security backed by the finest science, but there's a weekend to attend to... | |
espaethDigital PlumberPremium,MVM
join:2001-04-21
Minneapolis, MN
kudos:2 Reviews:
·Clear Wireless
1 edit | said by Karl Bode:Sorry, including everything, $1/GB is still rape. Are you seriously suggesting that's a reasonable cost for consumer bandwidth in the age of HD video? I think you're confusing supply and demand. That's like complaining about the price of gas and quoting this as the age of SUVs. Supply is what it is, and increasing demand is going to shift the price point up. Infrastructure doesn't get cheaper just because you have some sexy new app that has heavy requirements.
said by Karl Bode:Yeah, unless you're investing in, or working in the industry, for sure. Yeah, the people that actually build and design networks for a living would certainly know a lot less about the actual costs of operation than folks who get all of their facts out of press releases.
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4 edits | Supply is what it is, and increasing demand is going to shift the price point up. You ignore monopoly and duopoly influence, and the benefits provided by a captive audience in an uncompetitive market.Yeah, the people that actually build and design networks for a living would certainly know a lot less about the actual costs of operation than folks who get all of their facts out of press releases. Yeah what can I say, a decade of watching and studying the industry ten hours a day leaves me still thinking a buck per GB is unreasonable. I'm incorrigible.Do you have some crayons so I can color in my resume? No. But you certainly should be able to afford new ones shortly. 
Really now, I'm off to pay tribute to the weekend. | |
 tshirtPremium,MVM
join:2004-07-11
Snohomish, WA
kudos:3
·Comcast
2 edits | reply to iansltx
said by iansltx:Backbone bandwidth is sub-penny-per-GB. Heck, Comcast and TWC peer at places so it's practically free. If they directly peered that might be true (for comcast>TW and TW>CC data exchange) except you have to pay for the building, the techs, the engineering, the switches/routers/etc. the cable/fiber to get there from millions of homes plus interest on all the costs layed out in advance of the first bit exchanged.
NOTHING is FREE!
said by iansltx:THere are just infrastructure costs. Which probably raise the price to a whopping 10-15 cents per GB, tops. and you base that guess on????
said by iansltx: So you're still looking at a very large markup. Most of the costs aren't per GB, they're fixed costs. I have no problem with paying a 100-200% markup on backbone prices, then paying my share of fixed costs for the last mile. Mark that up a bit, too, bt don't say that the cost to transfer one masly gig over your network is any more than a few cents. But building and maintaining that network is extremely expensive....along with all the materials and labor are RoW costs, pole fees (here Cable or phone pays about $9 per attachment per pole per year to attach to the PUD's poles costs are similer or higher elsewhere) taxes, franchise fees, etc. The cost of the last mile is much more than the backbone transport cost, plus the interest, for all the investors who take the risk, before any monthly fee is charged, that the return may be LESS than the cost, or that after building but before the payoff point the network is abandoned (ie fails to have enough users to pay maintaince cost, let alone expansion or previous capital costs.
The idea that it was paid for once and for all time doesn't fly.
Did you pass? or are you ignoring the basics? | |
 a333A hot cup of integrals please
join:2007-06-12
Rego Park, NY
·Cingular Wireless
1 edit | What I don't get is, if you have caps, you have to lower the monthly prices. There's no way in hell "unlimited" broadband costs the SAME as 40 GB/month broadband. Sorry, I don't buy that steaming pile of B.S. If yer going to compare Broadband to ELECTRICITY, at least have a SIMILAR pricing model. Charge approx. $20/month for say 45 GB, and $0.10/GB after that. Also, don't count usage between 10 p.m. and 6 a.m, since the cable network's usually not used that much during the said hours. That way, as I've been suggesting all along, old Grandmas can get cheap broadband to read e-mail, while torrenters can cough up for their fair share, or just use a good download scheduler. Finally, since they're comparing cable BB to a UTILITY, it should have an SLA, right? Also, no throttling or other funny business. Since I'm paying at the byte level, I better not have ads being inserted into my pages. I sure as hell better not have p2p throttling or other creative "network management".
If wimpy Canadian ISP's like TekSavvy can do it, I have a hard time believing a megacorp MSO can't.
EDIT:
To those who talk about "management costs" B.S, isn't that the point of the base fee? Just like utilities, you pay a basic line fee to maintain the connection itself. Per se, around here, ConED charges approx. $30 as it's base charge. Any usage is stacked on top of that on the standard per-KWh basis. If capping is the "way to go", I don't see why this should be any different. Charge customers a basic fee to keep the line running (along with some included usage), and then charge for any usage on top of that. Sorry, it doesn't necessarily take an econ grad or rocket scientist to smell BS in 1000x bandwidth price markup. | |
| quote:
There's no way in hell "unlimited" broadband costs the SAME as 40 GB/month broadband.
Don't let these guys railroad you. You're absolute correct. | |
| reply to fAcEtIOUs
said by fAcEtIOUs:said by Karl Bode:Even if this is about deterring excessive use and not profit, they're shooting that concept in the foot by making the caps so low in the age of HD video. A premium tier with a cap of 40GB? If they implement this system, they'll have to adopt a much higher definition of excessive or face being laughed out of the market. I agree that TWC's caps are too low. But I do say caps are needed, and like I have always said, and now it looks like most of the ISPs are starting to agree with me, that metered broadband is inevitable. The only thing left to discuss will be what type of metered charges will be implemented. Problem is, not one carrier that I know of has proven that caps are needed. If they weren't so lazy, they'd upgrade their networks. Everything else has gone away from metered billing, this is a step backwards. I hope more companies do FTTH to compete and knock these guys out of business. If they don't want to compete and move technology ahead, let companies that are willing to do that provide service. | |
tshirtPremium,MVM
join:2004-07-11
Snohomish, WA
kudos:3 Reviews:
·Comcast
| reply to Karl Bode
said by Karl Bode: quote:
There's no way in hell "unlimited" broadband costs the SAME as 40 GB/month broadband.
Don't let these guys railroad you. You're absolute correct. The problem is, that way back when "they" adverized "unlimited" useage was in the 5-10GB average, maybe a few 40GB+, and in the quest for market share they didn't say much as the avereage hit 40, and the extreme went 250-500GB.-up.
to compare the "unlimited" days of yesteryear (even though the calendar shows only a few years ago.) is unrealistic.
They all need cost/bandwidth control (even more with the economy headed south) TW choose the lowball route, Comacst what they could support, verizon/fios is hedging (still needs more market share/higher take rate/greater rollout) before they cap, qwest and At&t can't quite grasp where their future lies.
In the long run, None of them can afford a straight metered rate, all need a basic tier (meter/account fee is what utilities like to call it) plus a per unit rate, to pay the bill. | |
 RallyBah HumbugPremium
join:2000-10-27
Astoria, NY
·RoadRunner Cable
| What i'll never buy into, or even comprehend. Is how in the hell we're talking caps in the 21st century? With all the mass-marketing campaigns that MSOs have repeatedly done, they've never predicted people would actually sign up and use their service(s)? I'm paying a premium for a service that hardly up until now, i never fully 'paid' for. But now magically implement a cap, service and QOS magically comes into the equation?
Sorry but i call bull-shit. IPTV/Online Movie sites and other sort of new mediums coming along, MSO's do not want to see their CATV side of the business leave. And they do not want their backbone to be used for viewing such material.
MSOs could've built their own backbone like Adelphia was trying to do. So bandwidth would be zero cost - the last mile run will be their only cost. That's what Verizon did with purchasing MCI. They acquired one of the largest Tier 1 providers in the world - peering is free, bandwidth is free.
But i always love to read quotes from MSO execs, on this subject. By implementing caps is somehow gonna improve QoS over it's network. And a better internet experience will come along with this. | |
wentlancYou Can't Fix Dumb..
join:2003-07-30
Maineville, OH | reply to tshirt
said by tshirt:The problem is, that way back when "they" adverized "unlimited" useage was in the 5-10GB average, maybe a few 40GB+, and in the quest for market share they didn't say much as the avereage hit 40, and the extreme went 250-500GB.-up. Bullshit. Their median NOW is 2 - 3 GB. The lying bitches have come out and said that. If they can sell it to you, then they have the capacity. They just want to make more money for it than they used to.
It's quite similar to DVD, which is way less expensive than VHS to produce, but costs more. And Blow-Ray, which is nominally more expensive to produce than DVD, but still even more expensive to buy. This is all about guaranteeing profits for the future.
Yawn....
cw | |
espaethDigital PlumberPremium,MVM
join:2001-04-21
Minneapolis, MN
kudos:2 Reviews:
·Clear Wireless
| reply to Rally
said by Rally:What i'll never buy into, or even comprehend. Is how in the hell we're talking caps in the 21st century? You can't sell a fixed resource as unlimited if people actually start to use it as unlimited.
said by Rally:With all the mass-marketing campaigns that MSOs have repeatedly done, they've never predicted people would actually sign up and use their service(s)? Did insurance companies think there wouldn't be more hurricanes? It's a numbers game -- they know that the average subscriber uses very small amounts of bandwidth. It's an automatic house advantage, like operating a casino. Also like the casino, if you develop a system to take from the house there's going to be a reaction. Casinos dispatch with cheaters to the gaming commission, and black list card counters even though the practice technically isn't illegal. Insurance companies, casinos, and ISPs all play the numbers and shift things around as they need to keep making money. These are for-profit institutions, nobody is disputing that.
said by Rally:MSOs could've built their own backbone like Adelphia was trying to do. So bandwidth would be zero cost - the last mile run will be their only cost. That's what Verizon did with purchasing MCI. They acquired one of the largest Tier 1 providers in the world - peering is free, bandwidth is free. Tier 1 peering is settlement free. It's a bartering system, like I'll give you 30 acres of land to use if you agree to farm it and keep the soil fertile. There's no exchange of money; each entity agrees that their contribution to the connection is roughly equal and doesn't bill each other. Both sides incur very real costs in terms of power, cooling, equipment costs/maintenance, and human capital.
Bandwidth isn't free. | |
espaethDigital PlumberPremium,MVM
join:2001-04-21
Minneapolis, MN
kudos:2 Reviews:
·Clear Wireless
| reply to wentlanc
said by wentlanc:Their median NOW is 2 - 3 GB. The lying bitches have come out and said that. If they can sell it to you, then they have the capacity. They just want to make more money for it than they used to. If the median usage is 2-3GB, and they're setting a cap at 250GB -- how exactly is that making them more money? | |
wentlancYou Can't Fix Dumb..
join:2003-07-30
Maineville, OH | reply to fAcEtIOUs
said by fAcEtIOUs:That markup being quoted is pure hype. Sure bytes bought from internet backbone providers are much cheaper than $1/GB. But the cost to deliver a GB to the last mile is much greater than purchasing it for the backbone. All the local infrastructure costs(splitting nodes; upgrading electronics; maintaining extra infrastructure; etc makes the quoted markup a joke. It's entirely convenient that you completely ignore the fact that the vast majority of the infrastructure is paid for, and used by the cable service that is also being paid for. Yawn, yawn, yawn. Cry me a river. If you want to sell internet access, then just shut up about having to pay operating expenses. You're already double dipping the physical infrastructure. The basic hookup should be less than your basic cable rate, because that covers the cost of the infrastructure right there.
Again, yawn....
cw | |
wentlancYou Can't Fix Dumb..
join:2003-07-30
Maineville, OH | reply to espaeth
He said the average hit 40 gigs. Maybe you should read before you troll.
cw | |
espaethDigital PlumberPremium,MVM
join:2001-04-21
Minneapolis, MN
kudos:2 Reviews:
·Clear Wireless
| reply to wentlanc
said by wentlanc:It's entirely convenient that you completely ignore the fact that the vast majority of the infrastructure is paid for, and used by the cable service that is also being paid for. It's not paid for -- you could see that yourself if you looked at any of the MSOs financial statements. Notice the billions the MSOs are carrying in long term debt to finance the build-out of their infrastructure. They don't own the infrastructure any more than the average homeowner really owns their home. They're on a payment schedule.
said by wentlanc:You're already double dipping the physical infrastructure. The basic hookup should be less than your basic cable rate, because that covers the cost of the infrastructure right there. Cable TV delivery covers common components like the physical cable, amps, HFC nodes, and distribution components. It doesn't cover the CMTS hardware, the fleet of data techs and DOCSIS specific tools, Internet helpdesk call center operations, abuse departments staff, etc. | |
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