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AKUSA49

@gci.net

Is GCI.net misleading customers?

This is new policy adopted April 20th 2010 and will effect all "unlimited" Internet accounts. I think this is unfair advertising practice due to the fact that "unlimited" is no longer "unlimited"

This article can be found at
»portal.gci.net/usage/fair_use.html

*******************************************

Cable Modem Fair Use Policy 04-20-2010
Fair Use Policy

GCI offers some cable modem Internet service plans with "unlimited downloads", meaning GCI does not bill customers additional fees for usage in a given month. These plans, unlike GCI Dedicated Internet Access Services, are not designed to support continuous high-volume data transfers by individual customers. All GCI cable modem Internet service plans are designed, maintained, and priced to provide a quality broadband experience at affordable rates and are subject to fair and reasonable use of the service.

To maintain the superior quality and performance of GCI networks and ensure the highest level of service performance for all users - which could be disrupted by the usage patterns of a small number of customers - GCI has established this Fair Use Policy for all unlimited download cable modem Internet service plans. Under this policy, GCI has reviewed the monthly usage by service plan and established usage profiles under this Fair Use Policy that far exceed the average usage under each service plan. Usage that exceeds the monthly usage profiles will be considered a violation of this Fair Use Policy.

For a large majority of customers , normal usage activities are not expected to exceed the plan profiles defined below:
Plan Name Usage
Ultimate Xtreme 40,000 MB
Ultimate Xtreme Family 60,000 MB
Ultimate Xtreme Entertainment 80,000 MB
Ultimate Xtreme Power 100,000 MB

Activities that involve extensive high-volume and continuous data transfer might cause your activity to exceed the expected monthly amount. Examples of these activities may include (but are not limited to) extensive use of streaming video and peer-to-peer file sharing programs, or an unsecured wireless signal.

GCI proactively identifies accounts with usage in excess of the plan profile. If your monthly usage exceeds the profile for your plan, GCI will provide the opportunity to upgrade your service plan or discuss how to maintain usage within the profile. GCI reserves the right to terminate service if a mutually agreed resolution cannot be reached.

null_

join:2010-05-31

4 edits
Yes, GCI is overcharging customers and they have been on their unbundled tiers for a very long time. Now GCI wants to overcharging the rest by setting limits on ultimate package tiers that previously were labeled as "unlimited downloads". I've been having an academic argument with koolman2 for awhile, but I thought I'd post the more revealing information about how GCI is ripping off residential customers

As an academic argument let's compare what data transfer is possible vs. what GCI now expects customers to use on it's "unlimited downloads" tiers. lol

1 Mbit = 1,000,000 bits

1,000,000 bps * 60 = 60,000,000 bpm
60,000,000 bpm * 60 = 3,600,000,000 bph
3,600,000,000 bph * 24 = 86,400,000,000 bpd

----------------------------------------------------------------------
Now that we have a baseline measure of the total data transfer possible from a 1Mbps line PER DAY, lets convert bits to bytes and gigabytes.

8 bits = 1 byte
86,400,000,000 bits / 8 bits = 10,800,000,000 bytes

----------------------------------------------------------------------
Now let's convert this to gigabytes

1,000,000,000 bytes = 1GB
10,800,000,000 bytes / 1,000,000,000 bytes = 10.8 GB

This means that 10.8GB of data transfer is possible with a 1Mbps connection operating 24/7 PER DAY.
NOTE: This figure doesn't take into account network overhead or other loss.

----------------------------------------------------------------------
Ultimate package speed tiers.
»www.gci.com/forhome/internet/ult···rnet.htm

(Total Throughput possible PER DAY)
4Mbps = 10.8 * 4 = 43.2 GB
8Mbps = 10.8 * 8 = 86.4 GB
10Mbps = 10.8 * 10 = 108.0 GB
12Mbps = 10.8 * 12 = 129.6 GB

(Total Throughput possible PER MONTH)
Assume 30 days = 1 month

4Mbps = 43.2 * 30 = 1296 GB = 1.296 TB
8Mbps = 86.4 * 30 = 2592 GB = 2.592 TB
10Mbps = 108.0 * 30 = 3240 GB = 3.240 TB
12Mbps = 129.6 * 30 = 3888 GB = 3.888 TB

Now this is what GCI expects its customers to use.
4Mbps = 40 GB
8Mbps = 60 GB
10Mbps = 80 GB
12Mbps = 100 GB

GCI expected utilization factor (actual/possible usage)
40 / 1296 = 0.0308 = 3.08 %
60 / 2592 = 0.0231 = 2.31 %
80 / 3240 = 0.0246 = 2.46 %
100 / 3888 = 0.0257 = 2.57 %

It should be no surprise that as technology continues to develop the true costs of broadband have continued to fall.
(it costs well less than .01 per 1GB)

Given the true cost of bandwidth today , GCI's forced bundling, and the price it's asking this is pathetic.

Some might choose to ignore it or want to be a water carrier for GCI and similar US ISP, but advertising a service and expecting less than 3% usage is overbilling IMHO. It's overcharging, and GCI and other US ISP can get away with thanks to franchise agreements that allow ISP to retain a regional monopoly. It's also manipulative because the general population doesn't understand IT and can be easily duped into believing whatever they're told to believe by an ISP.

null_

join:2010-05-31
reply to AKUSA49
Here's a arstechnica article from April 9, 2009 on Time Warner's ridiculous data transfer caps. This is a good measure of comparison against GCI and you'll be able to see what other US ISP charge their customers per gigabyte.

Note: the real cost per gigabyte is much lower, but arstechnica lists a general approximation of what the customer is charged per gigabyte.

»arstechnica.com/tech-policy/news···caps.ars

noname10

join:2009-10-14
reply to null_
Null, You don't seem to understand the first thing about the telecom industry.

Where do you come up with $.01 per Gigabyte? I assume from either from an article you read regarding large CDN customers or some little web hosting type setup.

First of all transit is purchased by the Mbit per second not in the volume purchased. GCI being such a tiny little carrier is probably paying about $10-$20 per Mbit per second for transit. Don't forget because of overhead and the spiky nature of usage they have to purchase about double what is actually being used most of the time.

Now the important part, those prices (which are greater than $.01 per gigabyte) are what they are paying to hand over traffic in Seattle. Those costs are insignificant rounding errors to GCI. The real costs are in operating and maintaining the infrastucture in Alaska and operating the undersea cables connecting alaska to Seattle. The price they are paying for bandwidth once they get to Seattle are insignificant rounding errors.

You are comparing Apples to Steak with your $.01 per gigabyte nonsense.

I do not work for GCI I am just a customer and clearly know a lot more about this than you do.

null_

join:2010-05-31

4 edits
said by noname10:

Null, You don't seem to understand the first thing about the telecom industry.
Your opinion.

said by noname10:

Where do you come up with $.01 per Gigabyte? I assume from either from an article you read regarding large CDN customers or some little web hosting type setup.
You're welcome to try and discredit Dave Burstein editor at dslprime.com. Mr Burstein most recently wrote in 2008 that the cost to provide 1GB of transfer to the end user was hovering at around "4-7 cents". He is in a position to know ISP costs firsthand including smaller regional ISP. Two years have passed since then and yes, Moore's law does apply.

»stopthecap.com/2008/08/04/fronti···five-gb/

For Ultimate Package broadband subscribers, maintenance costs of regional infrastructure are already factored into the $100/mo price you pay for the Ultimate Package. GCI internet services are provided over the same hybrid coax/fiber infrastructure as cable tv. Now you may be able to argue that the .01 per GB cost could be marginally higher for GCI or ACS because they have additional costs to maintain their undersea cables and termination points, but it isn't going to be that much more as GCI needs to maintain those cables for its highly profitable long distance and national wireless service plans. Undersea cable expenses are shared amongst all of GCI's services that use that infrastructure. Nice try

said by noname10:

First of all transit is purchased by the Mbit per second not in the volume purchased.
I am well aware of this. If you lease an OC-3, OC-48, OC-192 etc there is a finite limit of transfer possible. From there, you could have transit costs. You have dedicated traffic, and shared traffic that is portioned by a utilization formula by each ISP for specific services. My earlier post argued GCI's expected utilization for advertised residential services. I did not delve into an argument of backhaul other than to briefly note that it should cost around .01 per GB from end to end. You may choose to ignore the reality of the situation, but GCI expecting less than 3% utilization of residential services is a ripoff. Any argument you make trying to defend GCI on 3% utilization being acceptable is an argument of semantics or subterfuge on your behalf.

GCI and ACS now maintain their own cables, so they don't lease transit capacity on an undersea cable, but do retain maintenance costs. They may have some additional traffic costs if they do not have a peering arrangement in place at POP where they link to NSP, but these costs are minimal because many NSP offer peering at POP and prices are competitive amongst NSP (prices continue to fall).

said by noname10:

GCI being such a tiny little carrier is probably paying about $10-$20 per Mbit per second for transit.
I highly doubt this. GCI no longer has a middleman to pay a toll charge (undersea cable) and have not had this expense for a long time. They can peer directly at a large POP (seattle) and get cheap bandwidth like any other ISP or carrier.

said by noname10:

Don't forget because of overhead and the spiky nature of usage they have to purchase about double what is actually being used most of the time.
Yes and this is the same for any ISP or wireless provider, not just GCI.

said by noname10:

Now the important part, those prices (which are greater than $.01 per gigabyte) are what they are paying to hand over traffic in Seattle.
If it is greater for GCI, it's not by much. Let's assume GCI's $.02 cost per gigabyte. Let's even be overly generous and make it $.03-.05 cents. GCI's total cost per residential subscriber assuming 100GB of bandwidth consumed is no more than $5 (.05 x 100). GCI is making money hand over fist.

said by noname10:

Those costs are insignificant rounding errors to GCI. The real costs are in operating and maintaining the infrastucture in Alaska and operating the undersea cables connecting alaska to Seattle. The price they are paying for bandwidth once they get to Seattle are insignificant rounding errors.
Now this is the first sensible thing you've said. However, you clearly are ignoring that infrastructure maintenance costs are shared amongst GCI's many services. Cable tv, GCI's main source of residential business? It's provided over the same coax/fiber infrastructure. local phone (POTS)? It can be provided FTTN (same fiber) to a wiring cabinet. long distance? same as local.

You also seem to casually ignore that GCI made a complete digital transition and that cleared up a ton of spectrum that previously was held by its analog video/cable tv service. That move right there extended the life of GCI's existing infrastructure for quite some time.

said by noname10:

You are comparing Apples to Steak with your $.01 per gigabyte nonsense.
Again, your opinion and you've clearly not shown any real or factual information to present a counter argument.

said by noname10:

I do not work for GCI I am just a customer and clearly know a lot more about this than you do.
Well I hear that astroturfing has its perks. How is that working out for you? lol I know, I know, you're just a "concerned citizen".

null_

join:2010-05-31

3 edits
reply to AKUSA49
In 2005 the cost to provide 1GB was $.10. Five years have passed. Moore's law dictates that transistor counts double every two years. A similar progression has been observed across many technological sectors, including networking technology. Omar Sultan of Cisco Systems has indicated that, "Networking outperformed Moore’s Law by a factor of 47x." (see next post) The cost to provide 1GB should be between $.01-.02 or lower.

Dave Burstein of dslprime.com writes
(2 years have passed since this post, costs have fallen since then)

»stopthecap.com/2008/08/04/fronti···five-gb/
Dave Burstein says:
August 5, 2008 at 1:46 am

Good to see reporting looking closely at the issues. Feel free to pick up any reasonable amount of my work that’s helpful.

Writing the DSL industries news, I’ve often reported on bandwidth costs. I’m confident that 10 cents is a reasonable and possibly high figure for the marginal cost of bandwidth That should be accurate for Frontier in Rochester and their larger centers, a majority of their customers. The total cost for bandwidth at one European carrier about twice the size of Frontier is 55 cents per user per month, and their average user does 10 gigabytes per month. These are figures for an incumbent or large wireline carrier in the developed world.

Tony Werner, now CTO of Comcast, three years ago included cost data in a financial presentation for his then employer, UPC, the largest cable company outside the U.S. Working from his numbers, DSL Prime reported a 10 cents per gigabyte figure. The article was factchecked before publishing by UPC. Since then Moore’s Law has reduced reduced that figure to 4-7 cents.

Providing more bandwidth is not rocket science. Here’s the breakdown of the key factors. Incumbents except the smallest control fiber to most or all of their network, so that the primary cost of handling more bandwidth is upgrading switches, routers, and WDM gear.

Your home is connected to a DSLAM or a cable modem termination system (CMTS.) The DSL side is designed to be non-blocking, giving you full speed essentially all the time. So are most CMTS, but the shared local cable loop can be a limiting factor. Fortunately, DOCSIS 3.0 raises the cable upstream by a factor of 12-30+, probably minimizing loop issues.

Behind the DSLAM or CMTS is the “backhaul” to the “peering point” that connects to the “Internet backbone.” Physically, this typically is 3 to 7 routers/switches/concentrators that are connected by fiber. They go from your neighborhood exchange to a district center. The district center may have a direct connection, but more often it has another hop or three within the carrier’s network. For example, Time Warner Cable has local offices through New York. They probably connect to a New York City “hub.” The New York traffic might be merged with New England at a regional center in Greenwich, then carried from there to Time Warner’s big peering point in Virginia. There are lots of variations on that, but the essential idea is the primary costs is the machines at each connection. Nearly always, they’ve designed the network with fiber in place that can be upgraded as necessary. AT&T, for example, now mostly carries 10 gigabits on a single wavelength, but is rapidly upgrading that to 40 gigabits. They are beginning trials of 100 gigabits with plans to upgrade again in a few years.

All these upgrades cost money – billions in the case of AT&T. When calculated as a cost per gigabyte or per month per DSL customer, however, the total becomes manageable. It’s usually in the dimes per month, and almost always less than 3% of the price charged for the service. Smaller carriers, who don’t have the volume to buy gigabit connections or dark fiber, are in a totally different situation. A British carrier reported bandwidth costs dropped 80% when they moved to GigE, and if they had their own fiber – like all the incumbents – they would be lower still. Unless Frontier’s tech team is incompetent, they have fiber within Rochester and between Rochester and a point with cheap bandwidth line New York City. They will have similar in most medium and small areas as well, most already paid for with the $500M/year they collect in USF and ICC.

At the peering point, the carrier connects to the major backbones (AT&T, Verizon/MCI, Level 3, etc.) and others. Depending on who they are, they pay either “transit” or the many times cheaper “peering” rate. Big carriers mostly peer with each other, paying predominantly the (modest) proportional costs of the secure facility loaded with switches and other gear. They don’t charge each other for transferring the traffic, expect the flow to roughly even out over time. Small carriers almost always have to pay “transit” to a big one like AT&T. That costs $8-15/megabit in medium quantity, much more if your volume is small. A large broadband carrier will typically “peer” 80-95% of their traffic. Peering isn’t free, but the rates are much lower.

DSL and cable carriers of moderate size are generally accepted as “peers” at the lower rate. Most of the backbone bills are paid by someone sending things over the net, like eBay, Amazon, and the video web sites. They can’t “peer”, because they receive relatively little traffic. A carrier, on the other hand, has “eyeballs” – lots of customers watching and recieving things. The backbone providers are always looking for direct connections to “eyeballs,” and usually accept larger telcos and cablecos as peers.

Backhaul and peering/transit are the primary costs of adding bandwidth. For a large company and most incumbents, peering keeps the costs down and upgrading fiber speeds is a moderate expense. The industry standard assumption is $1/month per customer. That would be right for most Frontier customers. Smaller companies can have wildly different costs. One small wireless company in Wyoming is paying 11 times as much as the typical big company. Frontier probably has some places like that, although many of even their smaller towns are on their main fiber network.

Good luck with the site. It’s important work.
db

null_

join:2010-05-31
reply to noname10
noname10,

I would like very much to see you debate Omar Sultan of Cisco Systems.

»blogs.cisco.com/datacenter/comme···f_moore/

March 24, 2009
Networking: Delivering More by Exceeding the Law of Moore

Doug and I were having an interesting conversation the other day, which I thought was worth sharing….

In 1965 Gordon Moore postulated in a paper that transistor density would double approximately every two years. We’ve heard people question why networking does not follow Moore’s Law, presuming that it is behind the curve. It is easy for those without the domain expertise in any particular technology or IT area to try to force fit Moore’s Law in as a catch-all measuring stick for technology evolution. So, let’s take a look at the evolution of networking contrasted with the predictable transistor densities of Moore’s law.

We have to pick a starting point, so we’ll start with 1994, it’s fifteen years ago and gives us enough iterations of Moore’s Law to see if there is a noticeable trend or not. In 1994 Cisco started shipping the Catalyst 5000 series of modular LAN switches- it had a 1.2Gb/s backplane based on a shared bus and had modules supporting 12-port 100Mb Ethernet and 24-port 10Mb Ethernet. We will baseline all assumptions on a 1994 starting point with a 1.2Gb/s backplane. We will double the performance every two years on the Moore’s Law row, and track historical performance of Cisco’s networking products on the Cisco Switching Row.

1994 1996 1998 2000 2002 2004 2006 2008
Moore’s Law
Backplane (Gb) 1.2 2.4 4.8 9.6 19.2 38.4 76.8 153.6
Cisco Switching
Backplane (Gb) 1.2 3.6 32 256 256 720 1440 7200

If networking followed Moore’s Law backplane capacities would be around 150Gb today as opposed to the 7.2 Terabit that is shipping on the Nexus 7000. Networking outperformed Moore’s Law by a factor of 47x.

Where did Moore go wrong? Simply put, he didn’t. The issue is not Moore’s Law, it’s that Moore’s Law applies to transistor densities, not to I/O speed. I/O speed is gated on a subtly different set of variables, somewhat linked to transistor density (improves processing capacity on chip), but more importantly linked to I/O pin density on the package and the ability to generate clean signal over the wires on the circuit board.

Generating clean signal on the wire, depends on the signal to noise ratio of the medium. So let’s look at two mediums: Circuit Boards and External Cables:

Circuit Boards: On circuit boards we can hardwire the traces and we manage the cross-talk and noise. Today we run a variety of speeds on copper traces depending on the length of the hardwired trace but it usually is around 3.125Gb/s per transmission lane (used in switch fabric design and XAUI/XGMII interfaces). The shorter the wire the stronger a signal can be received for less power input and we tune wattage to keep power efficient.

Cables: In networking we are always trying to preserve the investment in the standards our customers have deployed that support our infrastructure. i.e. if we can reasonably support a new transport speed on a pre-existing medium that is commonly deployed it is great for everyone. It tends to be that the faster we want to transmit data the more ‘clean up’ we need to do to compensate for high noise on older cabling mediums. We compensate by adding buffers and digital signal processors to the PHY interfaces, this takes more power, and adds latency, so we have to balance the power and latency costs against the benefit of supporting installed-base cabling. Often this results in a variety of media types being supported with variable latency and power draw rates between media types and this feels confusing.

Net-net: Link speeds will not directly follow Moore’s law, but more or less align to it. Networking backplane capacity will continue to track well ahead of Moore’s Law on a linear extrapolation. Transistor density little to do with signal-to-noise ratio on different physical cabling types, it has a little bit to do with DSP efficiency, and has nothing to do with preserving a customers investment in structured cabling.

In summary, network performance has generally been significantly super-linear to the performance rates predicted if they tracked to Moore’s Law. However, singular link-speed has been roughly inline with Moore’s Laws predicted performance and future 40Gb and 100Gb Ethernet interfaces will prove this out once again.

Omar Sultan Posted by Omar Sultan at 06:38PM PST
Expand your moderator at work

noname10

join:2009-10-14
reply to AKUSA49

Re: Is GCI.net misleading customers?

"If it is greater for GCI, it's not by much. Let's assume GCI's $.02 cost per gigabyte. Let's even be overly generous and make it $.03-.05 cents. GCI's total cost per residential subscriber assuming 100GB of bandwidth consumed is no more than $5 (.05 x 100). GCI is making money hand over fist."

You need to stop using a cost per gigaybte model for a basis of GCI's costs. The only reason you an end customer is bills that way is because of simplicity. But in no way shape or form does GCI's costs have anything to do with "per gigabyte".

Think about it like water pipes. you are billed by the volume of water you use (gigabytes) but the the costs to GCI are in the size of the pipes wihich need to be big enough to support everyone taking showers at 7-9 AM and then not being used all day. the cost is in supporting that peak spike whether or not there is usage in the non peak times doesn't matter.

If you knew anything about tranist pricing you would know that the small commits GCI would be purchasing from the carriers would likely be in the $10-$20 mbit range. So if you max out your 10 mbit cable connection 24/7 that would cost them $100-$200 in ranist costs AFTER they brought it down to Seattle. Of course once again the main costs are in the local infrasture before they even get down to Seattle. There is a reason a dedicated circuit that allows you to max out your connection 24/7 costs around $750 from GCI and around $1,000 from ACS for 1.45 mbit per second (a T1) in Anchorage. You're cable modem pricing is based on most using only using 1% of capacity.

null_

join:2010-05-31
reply to Anon
said by noname10:

Oh my god you are so ignorant on the topic you don't even understand the difference between transport and transit. OC 192's and OC'3 have nothing to due with transit. Those are transport circuits. GCI and ACS own and operate OC 192's ETC for TRANSPORT to the lower 48. They purchase TRANSIT from other carriers in Seattle.
I never equated transport to transit, you made that assumption. I simply implied that GCI and ACS no longer have to pay exorbitant costs to another party to get their traffic to the lower 48. Where and who they peer with is where transit costs come into play.

said by noname10:

I'm not going to argue with you. I understood more about this when I was 12 years old than you do now. Keep crying.
The only thing you seem to understand is parsing passages.

null_

join:2010-05-31

2 edits
reply to Anon
said by noname10:

LOL you idiot. I just briefly looked at the link to the Cisco blog.

I knew it wouldn't back up your claims and not only that it's not even on the same topic. Router and backplane capacity have nothing to due with a HFC system.

Dude you're are truy and ignorant fool that doesn't know dick about this topic.
Jumping to conclusions and parsing topics again. HFC has to terminate someplace and that's at the headend. What does that CMTS connect to? Switching capacity does apply. Further again, you casually ignore the main point of the blog, that networking technology is advancing much faster than Moore's Law. This makes it possible to reduce costs while increasing network capacity.

It's funny, you always know someone is losing an argument when they lose self control and resort to personal attacks.

null_

join:2010-05-31

2 edits
reply to noname10
said by noname10:

"If it is greater for GCI, it's not by much. Let's assume GCI's $.02 cost per gigabyte. Let's even be overly generous and make it $.03-.05 cents. GCI's total cost per residential subscriber assuming 100GB of bandwidth consumed is no more than $5 (.05 x 100). GCI is making money hand over fist."

You need to stop using a cost per gigaybte model for a basis of GCI's costs. The only reason you an end customer is bills that way is because of simplicity. But in no way shape or form does GCI's costs have anything to do with "per gigabyte".
GCI's individual costs are not "per gigabyte" however, GCI evaluates total costs to run its infrastructure and then makes a determination of how they disperse these costs amongst various services (and as a pointed out before many services use parts of GCI's infrastructure). If GCI did not maintain a utilization factor formula for shared services they would not have hard limits at all. Costs to maintain a regional HFC infrastructure are primarily attributed to cable tv services, not internet. This may change in the future, but probably not. Again nice try.

said by noname10:

Think about it like water pipes. you are billed by the volume of water you use (gigabytes) but the the costs to GCI are in the size of the pipes wihich need to be big enough to support everyone taking showers at 7-9 AM and then not being used all day. the cost is in supporting that peak spike whether or not there is usage in the non peak times doesn't matter.
Yes, there's internal network capacity (capacity obviously will differ at different places on the network), transport capacity (undersea cables, and lines from oregon to a POP like seattle). And then there is transit, which is what an ISP like GCI/ACS will pay for from an NSP (and this cost is multiplied as an ISP will peer with multiple NSP). Transit is obviously much lower than an ISP's transport or capacity at points across an ISP's network as you've indicated because residential, business, and enterprise customers will mostly never fully use services they're sold.

said by noname10:

If you knew anything about tranist pricing you would know that the small commits GCI would be purchasing from the carriers would likely be in the $10-$20 mbit range. So if you max out your 10 mbit cable connection 24/7 that would cost them $100-$200 in ranist costs AFTER they brought it down to Seattle. Of course once again the main costs are in the local infrasture before they even get down to Seattle. There is a reason a dedicated circuit that allows you to max out your connection 24/7 costs around $750 from GCI and around $1,000 from ACS for 1.45 mbit per second (a T1) in Anchorage. You're cable modem pricing is based on most using only using 1% of capacity.
We could argue back and forth about what GCI or ACS actually pay to peer with Level3, Cogent, llnw, or other NSP but ultimately, only the ISP retains that information and if they don't disclose it publicly, we are left to guess. However, as I've previously pointed out a few times, these costs continue to go down as networking technology and switching equipment surpass Moore's law. Cisco claims this as 47x.
Again, I'm not arguing dedicated vs. shared model of traffic. What I am arguing is that given the continuing decline of networking costs and for the limits GCI sets on residential usage, GCI is overcharging its customers. Either the limits on usage should be raised much higher or GCI should lower its price points.

And again you casually ignore points I've brought up about maintenance of regional infrastructure. GCI's "unlimited downloads" package tiers were only available as an option to customers that subscribed to GCI's ultimate package of bundled services (cable tv, pots, long distance). GCI needs to maintain its HFC infrastructure to provide cable tv and pots traffic. You also ignore that the digital transition GCI made freed up a ton of spectrum which extended the life of GCI's infrastructure and will delay necessary capital expenditures for infrastructure.

noname10

join:2009-10-14
So if GCI is so grossly overcharging for the service provided, why are so luck to barely eek out a tiny profit half the time and take a loss the other half?
Expand your moderator at work

null_

join:2010-05-31

1 edit
reply to noname10

Re: Is GCI.net misleading customers?

said by noname10:

So if GCI is so grossly overcharging for the service provided, why are so luck to barely eek out a tiny profit half the time and take a loss the other half?
Well it depends on what issue we're debating now. Densely populated markets are profitable for GCI, but GCI also maintains infrastructure in many smaller/rural communities. These communities can't be that profitable. GCI's business and enterprise services for internet are a stable source of revenue.

You can also factor in the impact of the job market, recessions, and how that determines what people are willing to spend of their disposable income on products and services of a non-necessity such as entertainment. GCI's lion share of profit comes from cable tv, wireless, and long distance services. Use of these services are impacted by the economy and GCI's price points. When prices are too high, demand falls. It's simple economics. If/When this happens GCI still retains infrastructure costs they can't reduce, putting them at a loss.

When you consider GCI's long term history, over the past 20 years GCI has gone from a small long distance provider to buying out every cable tv competitor in the state. They've built two undersea cables and their main competition, ACS, isn't competing very well with some services and in others they're not competing at all.

And before you start bring up their balance sheet or quarterly financials, yes I've seen them. Compared to Comcast, AT&T, or Verizon, the alaskan ILEC/CLEC duopoly don't have free cash flow of those providers.
The Alaskan market will always face certain challenges because of its geographic remoteness, and reduced population, which translates into some additional costs, and reduced revenue potential. That doesn't mean GCI isn't highly profitable for some areas in its regional market.
Expand your moderator at work