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| | The true cost of bandwidth quote:
AT&T has limited Internet usage to about 90 minutes a day (7%) and is marking up anything over that by 1,000 to 2,000%. There is no economic or technical reason for this. The difference in cost between capped and unlimited service to a DSL carrier is a few dimes at most, possibly only pennies. AT&T's bandwidth cost has been going down for several years, and they have plenty of capacity to handle any likely load. Additional bandwidth costs a large carrier like AT&T between five and ten cents a gigabyte. Charging 10 times as much is information superhighway robbery.
This does not take into account the cost of maintaining the infrastructure, the cost of power, rent of facilities, payroll, etc... etc...
The big costs are not bandwidth charges, but selling bandwidth does have to cover the big costs.
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|   BF69Premium
join:2004-07-28
Camden, TN | Re: The true cost of bandwidth said by AnonNutter : quote:
AT&T has limited Internet usage to about 90 minutes a day (7%) and is marking up anything over that by 1,000 to 2,000%. There is no economic or technical reason for this. The difference in cost between capped and unlimited service to a DSL carrier is a few dimes at most, possibly only pennies. AT&T's bandwidth cost has been going down for several years, and they have plenty of capacity to handle any likely load. Additional bandwidth costs a large carrier like AT&T between five and ten cents a gigabyte. Charging 10 times as much is information superhighway robbery.
This does not take into account the cost of maintaining the infrastructure, the cost of power, rent of facilities, payroll, etc... etc... That's already taken into account with the prices they currently charge. NONE of that would go up if I decide to use an extra 100 GB of bandwidth. The ONLY cost increase for then is BANDWIDTH and that's been proven to be 10¢ per GB at most.
As I said if companies want to have REASONABLE caps and REASONABLE overages then fine. at&t caps are NOT reasonable. And there overage fees surely aren't. If at&t and the other said they would charge 15¢ per GB overage fees they could pay for that extra bandwidth and STILL make extra revenue and most people wouldn't bitch about 15¢ per GB. Also since at&t has rollover minutes for cell phone they need rollover bandwidth. | |
| | | | Re: The true cost of bandwidth said by BF69:said by AnonNutter : quote:
AT&T has limited Internet usage to about 90 minutes a day (7%) and is marking up anything over that by 1,000 to 2,000%. There is no economic or technical reason for this. The difference in cost between capped and unlimited service to a DSL carrier is a few dimes at most, possibly only pennies. AT&T's bandwidth cost has been going down for several years, and they have plenty of capacity to handle any likely load. Additional bandwidth costs a large carrier like AT&T between five and ten cents a gigabyte. Charging 10 times as much is information superhighway robbery.
This does not take into account the cost of maintaining the infrastructure, the cost of power, rent of facilities, payroll, etc... etc... That's already taken into account with the prices they currently charge. NONE of that would go up if I decide to use an extra 100 GB of bandwidth. The ONLY cost increase for then is BANDWIDTH and that's been proven to be 10¢ per GB at most. As I said if companies want to have REASONABLE caps and REASONABLE overages then fine. at&t caps are NOT reasonable. And there overage fees surely aren't. If at&t and the other said they would charge 15¢ per GB overage fees they could pay for that extra bandwidth and STILL make extra revenue and most people wouldn't bitch about 15¢ per GB. Also since at&t has rollover minutes for cell phone they need rollover bandwidth. LOL...
Lets try this again. If EVERYONE decided they were supposed to pull 100 GBytes, then nobody would be able to pull 100 GBytes.
Second point... as an ISP, I can *not* wait until per byte billing becomes the reality. Why, well because PER BYTE BILLING IS FAIR.
I don't care how much bandwidth you use. I just want YOU to pay for YOUR bandwidth, and I don't want you, or anyone else to pay for someone else's bandwidth.
WORD from the clued. | |
| | | Lazlow
join:2006-08-07
Saint Louis, MO | Re: The true cost of bandwidth Nutter
So are you telling me that a guy downloading on your system at midnight to 8am costs you that same as the guy downloading 4pm to midnight? We all know that is not true. The reason ISPs have to upgrade their systems is to handle the rush during peak hours (4pm-midnight?). So with your solution you make more profit from the first guy (10X?) than the second, so you raise your rates in order to cover the hardware upgrades you had to install becuase of the second guy. So effectively you are charging the first guy more than he costs you. | |
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iansltx
join:2007-02-19
Golden, CO
kudos:2 | Pretty sure those costs DO include infrastructure, power, etc. AT&T has zero bandwidth costs from a pure per-gig perspective. It's all infrastructure... | |
| |  espaethDigital PlumberPremium,MVM
join:2001-04-21
Minneapolis, MN
kudos:2
 ·Clear Wireless
| Re: The true cost of bandwidth said by iansltx:Pretty sure those costs DO include infrastructure, power, etc. AT&T has zero bandwidth costs from a pure per-gig perspective. It's all infrastructure.. That is the logical equivalent of saying that all the food in my house is free because I don't pay for each individual bowl of Cocoa Puffs I pour. I still had to buy the box to begin with, which had initial cost to it, and when I run out I still need to go back to the store and purchase more.
Increases in traffic drive the growth of infrastructure, which is not free, so to argue that you can put traffic on the wire without impacting costs is a bit misleading. | |
| | | Lazlow
join:2006-08-07
Saint Louis, MO | Re: The true cost of bandwidth espaeth
You are forgetting that during off peak hours that equipment is just idling along. When the network is not under heavy load(say midnight to 8 am) then it cost virtually nothing for the ISP to allow unlimited download. Now if the caps would only apply between 4pm and midnight, then I would MAYBE consider it reasonable. The gigs per month is a useless measure. If I have high speed and do all my downloading only during peak times (while staying under the cap), I can cause far more congestion(need for hardware upgrade) than if I download twice as much during off peak hours. The charge for byte model is also flawed becuase it is charging the same amount for a byte during high traffic times as it is for low traffic times. | |
| | | | espaethDigital PlumberPremium,MVM
join:2001-04-21
Minneapolis, MN
kudos:2 Reviews:
·Clear Wireless
| Re: The true cost of bandwidth said by Lazlow:You are forgetting that during off peak hours that equipment is just idling along. When the network is not under heavy load(say midnight to 8 am) then it cost virtually nothing for the ISP to allow unlimited download. Provided off-peak really stays off-peak; synchronization can be an enemy here. When I worked for a retail company with 1500+ US locations, the Intel services team scheduled the software update manager on all of the Windows workstations at the stores to all run at 2am central time because it was off-peak. After doing that they ended up creating a rush of bandwidth consumption that caused overnight batch processes to fail (ie, price updates, UPC code updates) because they had too many retransmits / drops for the TCP sessions to stay alive. The army of 10-15 PCs per store all swarming the data center update servers at the same time was a huge deal.
For large bandwidth consumption applications like file sharing, or video pre-fetch (ie, DirectTV downloads) the impact of synchronization could play in here because they can run in the background without any human intervention, and thus their time of operation is easy to schedule.
said by Lazlow:The charge for byte model is also flawed becuase it is charging the same amount for a byte during high traffic times as it is for low traffic times. I agree that the charge per byte model is flawed, because you are measuring based on quantity when capacity is solely determined by rate. Really, the fairest method of billing for bandwidth is the same way it's done at the carrier level: Burstable Billing. The obvious problem is that calculating burstable billing is beyond the scope of the overwhelming majority of broadband subscribers. Heck, in a recent poll 83% of respondents had no idea what a gigabyte is or how much they've used.
The bottom line is that every byte you consume on the wire is a byte that no one else can use. The more bandwidth you use, the greater your percentage of total infrastructure consumed, and thus the greater the percentage of monthly operation costs that can be attributed to providing you with service. | |
| | | | | Lazlow
join:2006-08-07
Saint Louis, MO | Re: The true cost of bandwidth "The bottom line is that every byte you consume on the wire is a byte that no one else can use. The more bandwidth you use, the greater your percentage of total infrastructure consumed, and thus the greater the percentage of monthly operation costs that can be attributed to providing you with service."
I am not buying this(above). If no one else needs that byte then it costs (essentially) nothing. Now IF someone else wants that byte it MAY apply. I really think the ISPs have to stop being so greedy. If there really was a bandwidth shortage(and there is not) then they would not be continually upgrading speed tiers. The higher the speed(the subscribers have) the faster congestion can build up. | |
| | | | | | iansltx
join:2007-02-19
Golden, CO
kudos:2 Reviews:
 ·Comcast
| Re: The true cost of bandwidth Let me restate. AT&T doesn't pay other carriers for transit to the internet; they're a Tier 1 network. So the costs for their bandwidth are much more fixed than marginal, whereas a company like Charter, Frontier or CableOne have to buy bandwidth from another carrier.
It's not so much that "this bowl of cocoa puffs is free but I bought the box". It's more like "This well is on my property and, once I pay for the well, the water is almost free, aside from low maintenance costs and the power to run the well. Much better analogy.
As the saying goes, "the internet isn't a truck, it's a series of tubes". | |
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Reviews:
·RoadRunner Cable
| Y'all are completely missing the point. AT&T, nor any non-regulated business, does not tie prices directly to marginal operational costs. There is a business to run that needs to make a profit against ALL costs. Debating how to measure the marginal cost of carrying another gigabyte is pointless. | |
| |  KrKHeavy Artillery For The Little GuyPremium
join:2000-01-17
Tulsa, OK
 ·AT&T DSL Service
| Re: The true cost of bandwidth said by MyDogHsFleas:Y'all are completely missing the point. AT&T, nor any non-regulated business, does not tie prices directly to marginal operational costs. There is a business to run that needs to make a profit against ALL costs. Bingo.
This pricing, as is the pricing of most things, has little to do with the real costs of manufacture, transport, etc etc etc
It's about profits and when competition is low, the price is set AS HIGH AS THE MARKET WILL BEAR. IE it doesn't matter if it costs them 0.000000001 cent a GB in actual costs, if they can make you pay $5 a GB for it, and make a gazillion bazillion dollars, THEY WILL. This is why the free market system just isn't very good at certain things like infrastructure.
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"Fascism should more properly be called corporatism because it is the merger of state and corporate power." -- Benito Mussolini
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KrKHeavy Artillery For The Little GuyPremium
join:2000-01-17
Tulsa, OK Reviews:
·AT&T DSL Service
| said by AnonNutter :
This does not take into account the cost of maintaining the infrastructure, the cost of power, rent of facilities, payroll, etc... etc...
The big costs are not bandwidth charges, but selling bandwidth does have to cover the big costs. Sounds good, but wrong. The items you mention are largely fixed costs. They don't change whether you use 1GB or 1000 GB.
IE the fixed costs are already built into the pricing. The only variable is the traffic. The costs of extra traffic do not drive fixed costs up unless it leads to more facilities, which invariably increasing bandwidth needs will lead to upgrades and network expansion; however, again, those costs will be figured into the base rate.
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"Fascism should more properly be called corporatism because it is the merger of state and corporate power." -- Benito Mussolini
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