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What does a GB of Internet service really cost? The worst case scenario (2011)

72 点作者 l1feh4ck超过 9 年前

15 条评论

thomseddon超过 9 年前
Yeah, because the only cost in broadband delivery is the undersea fibre??<p>How about the core network? High capacity core routers? Firewalls? Datacentres? Power? Optics? Engineering? Ongoing upkeep? Monitoring? Upstream bandwidth? Interconnects? Peering LAN membership? LIR membership?<p>In many ways their naivety isn&#x27;t too surprising, we started an ISP last year (<a href="https:&#x2F;&#x2F;telcom.io" rel="nofollow">https:&#x2F;&#x2F;telcom.io</a>) and the shear scale of the undertaking and costs baffels us everyday!
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tankenmate超过 9 年前
Of course the missing item in that calculation is the last mile. Netflix could set up a cage at each landing point and the savings would be nearly 99%. And that adequately explains why international transit is rarely the biggest cost issue (obviously there are corner cases around the world where this is indeed the biggest issue). The biggest part of the cost in the infrastructure (systems, staff, maintenance) is from PoP to customer.<p>Having said that some ISPs (especially ones that own the infrastructure) have a habit of increasing prices (if they can from limited competition; i.e. roll out costs are high so not too many companies roll out to a region) and&#x2F;or leaving customers to rot on old infrastructure (in order to maximise return on sunk cost; makes the CFO happy).<p>EDIT: clarification.
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akerro超过 9 年前
On the other side, you can look how fast, reliable and cheap is fibre line in Romania. Free market, no regulations, no corporations, no protectionism and good competition in that field. <a href="https:&#x2F;&#x2F;www.reddit.com&#x2F;r&#x2F;europe&#x2F;comments&#x2F;2ct58s&#x2F;average_internet_speed_in_eu_by_country&#x2F;cjiyt5n" rel="nofollow">https:&#x2F;&#x2F;www.reddit.com&#x2F;r&#x2F;europe&#x2F;comments&#x2F;2ct58s&#x2F;average_inte...</a>
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botterworkshop超过 9 年前
First, great article and fun thought experiment.<p>Second, you forgot to factor in the costs of bad management (half kidding).<p>- We are an ISP, lets rebuild every major app in existence, put our name on it, and deploy it as bloatware.<p>- We are an ISP, lets acquire a bunch of content and IP so we can provide unique content to our customers.<p>- We are an ISP, lets acquire company x that has nothing to do with our core services and infrastructure.<p>Bottom line: ISPs love wasting effort, resources, and time on products and services their customers don&#x27;t want, and continue neglecting their core services that customers do want improvement on.
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dragontamer超过 9 年前
What about the costs of network equipment? For all of the ports? What about the price of internet from all of the middlemen involved? If I created an ISP today, I would need to buy bandwidth from a Tier1 provider (like Hurricane Electric, or Verizon) and then resell said bandwidth to my customers.<p>The last-mile is also the most expensive part of any cable. You aren&#x27;t allowed to just tear up people&#x27;s yards and run cables through them, you have to work with the local government (or Home-owners association) to get approval. Said approval process may cost money, etc. etc.<p>The most expensive, regulated, and complicated, part of network delivery is the last mile. And that&#x27;s the real reason why local monopolies like Verizon and Comcast exist... except in the cases where Google buys out an entire municipality&#x27;s fiber line and then gets cozy with the local government.
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djsumdog超过 9 年前
Centralized services are such bad models too. Imagine if YouTube came out with a Miro type player that allowed everyone to cache videos and sever then to others. No more waiting to buffer a video you&#x27;ve watched ten times. Google&#x27;s sever usage would drop.<p>But there is so much money to be made by restreaming that video every time...with ads. Plus how could Google enforce deleted videos or marking then pirate if there was a local cache.<p>The price of bandwidth is cheaper than telecoms are letting on, yes. But there is so much that can be done to streamline the existing architecture as well.
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rayiner超过 9 年前
So his bottom line is $50&#x2F;month per customer for a constant 10 mbps. To put that into perspective, the operating profit margin of wireline ISPs is 5-20%. The low-end of that scale is for traditional phone&#x2F;DSL&#x2F;fiber. Assuming an average subscription of ~$100&#x2F;month, that bandwidth is coming out of an operating profit of $5-20&#x2F;month.<p>Obviously the cost of bandwidth is a lot less than $50&#x2F;month. But even at 1&#x2F;10th that figure, it&#x27;s a big chunk of the variable expense of the service.
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Johnny555超过 9 年前
Too bad this analysis has nothing to do with delivering internet access to the home since the ISP typically just leases a few miles (or 10&#x27;s of miles) of fiber to the local internet exchange point, rarely do they lay an 8700 mile undersea cable... and even if they do, they still need to build all of the infrastructure to get the network to your house.<p>I&#x27;d be much more interested in seeing what it really costs to build an operate an ISP with broadband service to the home (whether it&#x27;s fiber or copper)
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lquist超过 9 年前
This thread might be a good place to ask: Why is enterprise bandwidth an order of magnitude more expensive than residential bandwidth from the same company, delivered in the same way?
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ck2超过 9 年前
My 15mbps cable broadband in the USA costs $62 a month. Every year goes up $5&#x2F;mo or so.<p>The biggest problem in much of the USA is duopolies (and the DSL side of that typically sucks so it is effectively a monopoly).
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Animats超过 9 年前
The CEO of Sonic.net points out that their wholesale bandwidth cost decreases a little each year. They have no caps on their DSL or fiber services.
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mastazi超过 9 年前
So in the last paragraph the author imagines a dystopian future where you have to plan which movie you are going to watch tomorrow so Netflix can pre-download it for you during the night, and for some reason he thinks that it would be a desirable scenario. LOL.
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brownbat超过 9 年前
It&#x27;s true that the economics of bandwidth depend on the hour.<p>I don&#x27;t know about surge pricing, but I&#x27;d definitely join an ISP that just offered uncapped off peak speeds.
grahamburger超过 9 年前
This is kind of like saying the cost of an apple seed is so low that we should only be paying pennies for apples.
mdip超过 9 年前
There&#x27;s more than a few problems with this particular assessment as it relates to &quot;what we pay&quot; and what kind of service we can expect for that price.<p>On the cost side, I suspect the cost of support, service and customer acquisition significantly affects the cost&#x2F;GB. I used to switch between UVerse and Comcast every 6-12 months (the point at which the promotional prices ended) because it was very easy to do so and they didn&#x27;t have a requirement that I remain for a contractual period of time.<p>However, even given all of this, &quot;what we pay&quot; <i>is barely related</i> to &quot;what it costs&quot;, at least in most of the US. In the majority of markets there is often only <i>one</i> service provider that provides service at speeds in excess of 25Mbps. Sometimes, there is two, but in the state that I live in, the choice is often &quot;Cable Provider&quot; vs &quot;Phone Provider&quot;. If you&#x27;re lucky, your phone provider is AT&amp;T on the newer network (with those giant boxes in each of our subdivisions -- no FIOS here) and they can deliver more than 25Mbps (inbound) and the other is Comcast at up to 100Mbps. Both have caps (unless you are a business subscriber) with AT&amp;Ts at 150GB or 250GB depending on the service and Comcast at 250GB. A small number of areas have an additional cable provider (usually Wide Open West) that offer reasonable speeds and I <i>think</i> WoW doesn&#x27;t do caps but I&#x27;m not sure.<p>The price you pay from each of these providers will be different depending on how many competing providers exist in the area. AT&amp;T U-Verse at much higher speeds costs less in my house than AT&amp;T U-Verse in my family&#x27;s cottage up north (it tops out at 12Mbps with 150GB caps).<p>Until there is competition offering uncapped service (and customer demand for it), it doesn&#x27;t really matter what the cost is. The folks at these companies charge what they can get away with given the market they&#x27;re operating in, which in many markets is either an absolute monopoly (me, up north with AT&amp;T) or them sharing the market with a single competitor who is able to deliver faster or slower service than them with identical data caps. The cost for entering a residential market is high, riddled with regulation and practical concerns, and the companies have lobbied hard for restrictive state laws that prohibit municipalities from providing a competing service.<p>Prior to them setting up this whole &quot;pay for unlimited service&quot; arrangement, I ran afoul of the 250GB cap and immediately switched to Comcast Business. The difference is <i>stark</i>. I had some service done with AT&amp;T that resulted in one of the AT&amp;T guys putting a shovel through the Comcast Business wire at 4:30 in the afternoon. I called them up and they sent someone to my house at 6:30 PM. I also get a special phone number, not open 24-hours, but I rarely talk to more than one person about the problem I&#x27;m experiencing and the hold times are minimal. He fixed the service (at no charge -- despite it being a competitor that <i>caused</i> the problem). That was one experience, but I&#x27;ve called support a few times and I&#x27;ve always had my issues addressed <i>quickly</i>. When I was a residential customer, waiting several days for a service call was normal.<p>I pay more than <i>twice</i> as much as the residential service at $130&#x2F;mo for the same speeds, but I have no data cap and routinely use 2-3 TB&#x2F;mo according to my router. I&#x27;m on the same wires, using the same company, paying a lot more, and getting no caps, and what I&#x27;d characterize as exceptional customer service. This almost irritates me <i>more</i>. It&#x27;s not an issue of being unable to provide this kind of service to everyone, or an issue of network capacity, it&#x27;s an issue of being unwilling to provide this kind of service to everyone because the market dictates that they don&#x27;t need to in order to be (very) profitable.<p>Now, I suspect that the small businesses that they target this service at probably don&#x27;t use the kind of bandwidth or have the performance requirements that I do (I&#x27;m in the 2-3TB&#x2F;mo range). My dad&#x27;s 9-person company was happy with IDSL at 1Mbps bidirectional until two years ago and would probably still be on it if Comcast hadn&#x27;t wired up the park and undercut the other providers by half, so they&#x27;re competing for a different kind of customer in small business. And this may bean that the small business market actually has <i>more</i> competition since many are willing to accept slower service offerings as identical products (or maybe the manufacturing non-tech heavy small businesses in my area are just that way).