4 ms·

Yes, the costs are proportional to the bandwidth, but people want a fast connection at a low price, so ISP's sell a fast connection at a discount and limit how

by Joeri 7y ago

Yes, the costs are proportional to the bandwidth, but people want a fast connection at a low price, so ISP's sell a fast connection at a discount and limit how often you can use it through traffic shaping and/or data caps to still turn a profit on it. The business plans are often unlimited, and typically priced a multiple for what's the exact same technology as the home plans underneath. If you want to know what unlimited bandwidth really costs, look at the price of the business plans. I think ISP's are often undeservedly painted as the bad guys. Yes, some are profiteers, but most are just turning a normal profit, just like any business. The only way for them to compete on price with other ISP's is to also impose caps, because what they charge is just not enough to fund the infrastructure for a dedicated connection with guaranteed bandwidth.

trepanne 7y ago
> the costs are proportional to the bandwidth That's not how statistical multiplexing works. If it was some sort of a natural law that shipping 1 byte cost $x on the margin, then the PSTN never would have survived the shift to unmetered long distance service. Somehow ISPs have been making big profits selling unmetered internet service during a period of hypergrowth. How is it possible that they didn't go broke during this process? The real story here is that "power user" is a proxy for "cord cutter". If a residential user downloads 1TB per month, then they're a thoroughgoing "over the top" video consumer. The traffic patterns are different for streamers vs. pirates, but it's still people watching TV and not paying cableco for the privilege. They're just doing price discrimination, rolling out bandwidth caps with punitive fees for violations, and waiting for the 4K frog to boil. Roll it forward, and you're back in the world of all you can eat at a higher price point. Cablecos don't really have to care how you split your bill between internet and video, as long as ARPU stays in the $70-$100 range. "Dumb pipes" are higher margin than cable channels, and don't need contract renegotiations with steely-eyed squeezers like Disney. Let DIS roll their price increases out directly to consumers with their streaming channels, while you just sitting there running a toll road. It's like a regulated natural monopoly, without the burden of appropriate regulation. This is a nice business. > If you want to know what unlimited bandwidth really costs, look at the price of the business plans. The premium there is for uptime guarantees, better service, and a certain amount of legislative corruption (without which no discussion of telco/cableco practices would be complete). They are allowed to discriminate between commercial & residential customers, and refuse residential service to commercial addresses.
one2zero 7y ago
I assumed the extra cost was not because of the unrestricted bandwidth (Granted I have Xfinity in Chicago and only pay $15 a month for unlimited on Gigabit)but because of the static IP(s) associated with the service. In addition I would assume that trouble calls are elevated over that of a home user with quicker response times. Just looking at Biz service vs home and assuming that's because of unlimited bandwidth is 1:1, there's more going on there that's different between the two.
- vel0city 7y ago
  Until a few years ago the cost to get additional IP addresses on most business ISPs was pretty minimal. The ISP my company uses does not even charge for additional IP addresses, you just need to give good reasons for why you need a larger IP space. With a previous ISP, additional IP addresses were about $10/mo but the cost of service was easily 3-4x similar rated speeds as a residential connection. Most of the additional cost is due to increased capacity planning and faster service times.
deleted 7y ago
[deleted]
zanny 7y ago
> sell a fast connection at a discount You can get gigabit fiber throughout Asia and Europe for as low as $20 a month with no cap. There is no "discount" for fast connections in the US. The ISP cartel price gouges the whole country and because of their regional monopolies have no incentive to invest in actually having the provisioning to support the speeds they advertise.
henryfjordan 7y ago
Bandwidth != Total data used. The ISP needs to build infrastructure to support peak instantaneous load. If the current network is at 50% capacity and I turn on Netflix there's basically no cost to the ISP, even if I've already used my 1TB of data for the month. If they are at 95% capacity then things start to matter a lot more. If the ISPs were interested in fair pricing, they should offer pricing like the power companies these days, charging more during the day/evening and less during the night when less people are generating traffic. You should be throttled during the afternoon when everyone else is on or pay for the "fast lane". But they don't operate like that, because $, making them the bad guys.

by Joeri 7y ago

trepanne 7y ago

> the costs are proportional to the bandwidth That's not how statistical multiplexing works. If it was some sort of a natural law that shipping 1 byte cost $x on the margin, then the PSTN never would have survived the shift to unmetered long distance service. Somehow ISPs have been making big profits selling unmetered internet service during a period of hypergrowth. How is it possible that they didn't go broke during this process? The real story here is that "power user" is a proxy for "cord cutter". If a residential user downloads 1TB per month, then they're a thoroughgoing "over the top" video consumer. The traffic patterns are different for streamers vs. pirates, but it's still people watching TV and not paying cableco for the privilege. They're just doing price discrimination, rolling out bandwidth caps with punitive fees for violations, and waiting for the 4K frog to boil. Roll it forward, and you're back in the world of all you can eat at a higher price point. Cablecos don't really have to care how you split your bill between internet and video, as long as ARPU stays in the $70-$100 range. "Dumb pipes" are higher margin than cable channels, and don't need contract renegotiations with steely-eyed squeezers like Disney. Let DIS roll their price increases out directly to consumers with their streaming channels, while you just sitting there running a toll road. It's like a regulated natural monopoly, without the burden of appropriate regulation. This is a nice business. > If you want to know what unlimited bandwidth really costs, look at the price of the business plans. The premium there is for uptime guarantees, better service, and a certain amount of legislative corruption (without which no discussion of telco/cableco practices would be complete). They are allowed to discriminate between commercial & residential customers, and refuse residential service to commercial addresses.

one2zero 7y ago

I assumed the extra cost was not because of the unrestricted bandwidth (Granted I have Xfinity in Chicago and only pay $15 a month for unlimited on Gigabit)but because of the static IP(s) associated with the service. In addition I would assume that trouble calls are elevated over that of a home user with quicker response times. Just looking at Biz service vs home and assuming that's because of unlimited bandwidth is 1:1, there's more going on there that's different between the two.

vel0city 7y ago
Until a few years ago the cost to get additional IP addresses on most business ISPs was pretty minimal. The ISP my company uses does not even charge for additional IP addresses, you just need to give good reasons for why you need a larger IP space. With a previous ISP, additional IP addresses were about $10/mo but the cost of service was easily 3-4x similar rated speeds as a residential connection. Most of the additional cost is due to increased capacity planning and faster service times.

deleted 7y ago

[deleted]

zanny 7y ago

> sell a fast connection at a discount You can get gigabit fiber throughout Asia and Europe for as low as $20 a month with no cap. There is no "discount" for fast connections in the US. The ISP cartel price gouges the whole country and because of their regional monopolies have no incentive to invest in actually having the provisioning to support the speeds they advertise.

henryfjordan 7y ago

Bandwidth != Total data used. The ISP needs to build infrastructure to support peak instantaneous load. If the current network is at 50% capacity and I turn on Netflix there's basically no cost to the ISP, even if I've already used my 1TB of data for the month. If they are at 95% capacity then things start to matter a lot more. If the ISPs were interested in fair pricing, they should offer pricing like the power companies these days, charging more during the day/evening and less during the night when less people are generating traffic. You should be throttled during the afternoon when everyone else is on or pay for the "fast lane". But they don't operate like that, because $, making them the bad guys.