cost of 1 gig

[David Farber <dave () farber net>]

So what does it cost off peak?? djf

Begin forwarded message:

From: Brett Glass <brett () lariat net>
Date: April 13, 2009 10:06:43 PM EDT
To: "Dave Farber" <dave () farber net>
Subject: P.S.

See my posting regarding the incremental cost of 1 GB at

http://bennett.com/blog/2009/04/pitchforks-in-austin-time-warners-bandwidth-cap/comment-page-1/#comment-427947

@matthew: Time-Warner (or any ISP) isn’t just paying for transit,  
though that is an expensive component of their costs. They’re also  
paying a backbone provider. And since the Internet has “rush  
hours” (the busiest time of day is “prime time,” when people all seem  
to want to start streaming video or browsing at once), they have to  
buy and provision enough capacity to keep up with the peaks in demand.
$1/GB is actually pretty close to the incremental cost of pumping  
another gig of data through the system during “rush hour.” Think about  
it: you have an hour and a half to get that gigabyte through the pipe  
to the user who’s streaming the movie. That’s 8 billion bits in 90  
minutes. That means that you have to add another 1.48 Mbps — about  
another T1 — of capacity.
What does this cost? On a monthly basis, this much bandwidth costs  
$5.50 if you are co-located at an Internet peering point. The cost is  
about $30 if you’re a well connected cable provider with a leased line  
into that peering point. It costs you$148 if (like me) you’re a rural  
ISP paying $100 per Mbps for bandwidth; and $450 if you’re a rural ISP  
in some other areas of America where the only way to get bandwidth is  
via expensive bonded T1 lines.
But back to Time Warner’s case: the $30 divided by 30 days is $1 per  
GB — exactly what Time Warner is charging.



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