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jackal
join:2004-01-06
Ozark, MO

jackal

Member

Why tiered speeds?

I've got my grandpa on DSLX 1.5/384 and my dad on 768/?. Personally, I can't function on 768kbps--I'm too impatient, so I keep my cable modem at 3mbps (I used to have it at 5mbps, but I'm trying to save money). My work uses SDSL at 512/512, which is absolutely painful (except for uploads). All of this got me to thinking about speed tiers.

Having speed tiers on a cable platform makes sense, because if every home user were given access to the full spectrum (I'm not sure how that would work--if modems can even handle multiple bonded channels or whatever), a few high users could easily overwhelm the entire cable platform, as it's a shared resource. Tiered speed controls keep everything flowing smoothly. (I always get my rated 3mbps.)

But in the case of DSL, each subscriber has a direct line to the DSLAM, which, if I understand correctly, should be connected directly to the provider's backbone. There's no competition for bandwidth in the copper line between the subscriber and the provider, and the backbone (whatever it is, OC3 to OC192) should be plenty fast enough to give everyone high speeds without congestion.

So, in DSL, what's the reason for tiered speeds? What's the bottleneck that would cause DSL providers to try to limit bandwidth? Why not just give everyone the max their link can handle? What costs DSLX so much more that if I had my dad upgrade to 6mbps, he has to pay more than double what he is now?

Also, what's the limit on that top speed tier? Why 6mbps? Doesn't ADSL go up to 8mbps and ADSL2 go up to 12mbps?

I know DSLX is limited by what the host provider offers (in both of the above cases, it's AT&T), so it's not DSLX's fault, but I'm hoping someone here knows about the industry...

djrobx
Premium Member
join:2000-05-31
Reno, NV

djrobx

Premium Member

Just because there's no competition to the DSLAM doesn't mean there's competition afterwards. The OC circuit you refer to is quite an expensive beast. And while 155mbps sounds like a lot, if you have thousands of customers at 6mbps, congestion is certainly still something to be concerned with.

And, not everyone can reach the fastest ADSL speeds. Why should someone pay the same as someone getting 6mbps service when they can only reach 1.5?

768kbps speeds are plenty for casual surfers and email checkers looking for something better than dialup.

More advanced users who want more should probably pay for more.

Zak_D_H
Premium Member
join:2007-01-04
Salt Lake City, UT

Zak_D_H

Premium Member

Think of your DSL signal as a Person running up a hill to hand you a package. The farther up the hill the runner gets the more tired he becomes. Furthermore, if there are obstacles in the way like thick bushes or large rocks then he may not have to travel as far before he becomes tired. The runner can only travel so far before collapsing with exhaustion. The runner is also limited by the size of the package he is carrying to you.

If you are close to the Source of the signal then you'r line can handle more bandwidth but you still have to pay for that bandwidth to be sent to you. The reason why DSL costs more to get more is because the phone company still has to reserve as much bandwidth as your paying for and we need to be able to adequately provide you with that bandwidth at all times. If you are far away from the CO(Central Office) or RT(Remote Terminal) then you cannot get the faster speed so we bill you for what you can get instead of billing you for bandwidth that we cannot even provide for you.
jackal
join:2004-01-06
Ozark, MO

jackal to djrobx

Member

to djrobx
OK, so you're saying that the tiered plans are a way to artificially control bandwidth on the backbone?

Let me try this with a hypothetical. Let's assume that the cost of providing a port on a DSLAM and leasing of a modem works out to, oh, $10 per month. So, at $14.95 per month, a DSL provider is really charging $4.95 for 768kbps of bandwidth on the optical carrier serving the DSLAM. On the 1.5mbps plan at $19.99 per month, $9.95 per month goes to the required bandwidth on the backbone (a nice figure: double the bandwidth, double the cost of providing that bandwith over the backbone), all the way up to $24.95 paying for the backbone on the $34.95 6mbps plan (a nice break for bulk buyers: only 5 times the price for 8 times the bandwidth).

Based on the average DSL penetration of about 11 percent and the approximately 34000 households in Simi Valley, that leaves us with 4000 DSL subscribers. Then, let's assume an average cost to the DSL subscriber of $6 per mbps, and let's further assume that the average DSL subscriber is subscribed at about 2mbps (I figure 30% at 768kbs, 40% at 1.5mbps, 20% at 3mbps and 10% at 6mbps). That would mean that the DSL provider is making approximately $48,000 per month over and above the cost of providing the DSL link itself--and that $48,000 goes towards the cost of providing bandwidth over the backbone.

So, the next question is: what will $48,000 per month get you? UC Berkeley spends $200,000 per year or $16,000 per month on its Internet connections, which includes two OC3s to CENIC and an OC12 to CalREN (for Internet2). I have no idea how a DSL network sets up its backbone (fiber directly from the DSLAM to a central POP 50 miles away with interconnects to backbone carriers? Daisy chaining COs and aggregating fiber from them all? I'm clueless about but fascinated with how this all works), but let's liberally assume for purposes of this hypothetical that the $48,000 will get us an OC48. 2488 mbps / 4000 subscribers is...a guaranteed 636 kbps per subscriber.

OK, I can see how your argument works: backbone pipes are expensive (although in the case where the telco IS the DSL provider, they own the fiber and the equipment on either end and can make big pipes at big discounts). I know my numbers are WAY off, but I can see how a free-for-all, where every subscriber can get the full ADSL2 12mbps, wouldn't work well, even if most people aren't using the full bandwidth 24 hours a day (which is why there is overselling of capacity).
If the bulk of the cost of providing bandwidth isn't the last mile but the backbone, how can AT&T plan to make their LightSpeed service at 25mbps profitable without charging hundreds of dollars per month? How can Verizon's FiOS offer 15mbps for $49.99 per month?

Although your argument is plausible, I still remain skeptical that the chief bottleneck is backbone capacity, especially with so much dark fiber laying across this country...
jackal

jackal to Zak_D_H

Member

to Zak_D_H
OK, but what about someone living next door (and 500 wire-feet) to a CO or RT who CAN get 6mbps (or more, if it were offered) but chooses instead to get 768kbps? The line CAN support 6000kbps, so why does it cost him less to get 768kbps?

I'm not quite sure I understand your argument...

LittleKenny
The
Premium Member
join:2003-08-05
Lomita, CA

1 edit

LittleKenny

Premium Member

Actually read the question and am retracting my statement.

sashwa
Mod
join:2001-01-29
Alcatraz

sashwa to jackal

Mod

to jackal
cuth, how about I move your question over to General Questions seeing what you are asking is not about DSLX? It's an gneral industry question.
jackal
join:2004-01-06
Ozark, MO

jackal

Member

Sure, sorry--I looked for a more general forum, but all I could see that was DSL related was the individual company forums. Since the DSL I'm familiar with is DSLX, I posted here.

Sorry!

sashwa
Mod
join:2001-01-29
Alcatraz

sashwa

Mod

Not a problem, cluth. Hold on and I'll get you moved.

tim_k
Buttons, Bows, Beamer, Shadow, Kasey
Premium Member
join:2002-02-02
Stewartstown, PA

tim_k to jackal

Premium Member

to jackal
No matter what type of internet connection you have, the ISP will only make money by oversubscribing. The customer may have a direct line to the ASAM/DSLAM, but the bandwidth is shared from that point onward. Our ASAMs have a DS3 going to them. Alcatel 1000 ASAMs can handle 576 customers. 7300's can handle several thousand. All are on DS3 circuits. Now do the math to see how many customers operating at top speed can bring bandwidth down to a crawl. Just look at the complaints in the Verizon forum to see how easy it is to bring a backbone down.

djrobx
Premium Member
join:2000-05-31
Reno, NV

1 recommendation

djrobx to jackal

Premium Member

to jackal
quote:
OK, so you're saying that the tiered plans are a way to artificially control bandwidth on the backbone?
I primarily think it's just economics. There's a variety of demands out there. There's really a lot of people out there that just like to check email and surf some sites. They don't benefit from much more than a 768/128 connection. Lots of those people could function on dialup, but opt for DSL with its competitive pricing.

DSL ISPs still want to make money, so they make some more choices available to people who are willing to spend more to get faster speeds. They've spent years tweaking with difference price points for the different speeds. Faster speeds have value so why not charge more for it?
quote:
OK, I can see how your argument works: backbone pipes are expensive (although in the case where the telco IS the DSL provider, they own the fiber and the equipment on either end and can make big pipes at big discounts). I know my numbers are WAY off, but I can see how a free-for-all, where every subscriber can get the full ADSL2 12mbps, wouldn't work well, even if most people aren't using the full bandwidth 24 hours a day (which is why there is overselling of capacity).
If the bulk of the cost of providing bandwidth isn't the last mile but the backbone, how can AT&T plan to make their LightSpeed service at 25mbps profitable without charging hundreds of dollars per month? How can Verizon's FiOS offer 15mbps for $49.99 per month?

Although your argument is plausible, I still remain skeptical that the chief bottleneck is backbone capacity, especially with so much dark fiber laying across this country...
Actually, AT&T doesn't currently plan to offer 25mbps internet service with lightspeed. They currently plan 6mbps internet, the only advantage being 1mbps up instead of 768kbps up. The rest of the VDSL pipe is reserved for television services.

You're quite right that the telcos themselves are in the best position to add more bandwidth at will. And I suspect that's why they seem to care the least about wrangling individual usage hogs. Nonetheless setting a maximum download speed is a good way to ensure that people don't notice/complain when the network is reaching its capacity, and a handful of users don't run off with the majority of a $16,000 per month optical connection.

Here's another DSL specific cost consideration. The faster the circuit on DSL, the more clean the line must be, and the more likely it is going to have issues and generate a tech support call.

That said I also want to add that I don't think the "shared" topology of cable internet is the reason for cable's tiers, nor is it the primary cause of bandwidth crunches in most cases. In fact, cable companies in general took a lot longer to offer speed choices.

I'm oversimplifying but a DOCSIS cable channel offers 36mbps. Lets say they can offer that to each node. In my suburban town I was one of the later installations and am on node 57. That means they'd need 2052mbps of backbone capacity to match the capacity they have running to each node. But wait! There's more. The 36mbps is really just what's available per channel. If the cable plant has a 850mhz system, that's 141 6mhz channels. Most of that gets lost on braodcast TV channels but now you can see why cable companies are so eager to get rid of those analog tier channels and move to digital.

I'm not entirely sure how cable companies truly split the fiber nodes (in other words, how many modems see the same broadcast data stream and how many channels are in use?), but they have a LOT of flexibility and room for expansion.