nanog mailing list archives
RE: An Attempt at Economically Rational Pricing: Time Warner Trial
From: "Alex Rubenstein" <alex () corp nac net>
Date: Sun, 20 Jan 2008 17:26:13 -0500
If we define "customer" to be an average user of the provided service,
and
bandwidth to be transit pipe cost, then no, bandwidth is not the major
cost
of their service. However, if you're advertising an 'unlimited'
service
and want to keep your promises, you can't plan your network around the
average
user -- there will be people who will want to hold you to your
'unlimited'
promise.
I don't agree again. The heavy usage customer would be included in your 'average customer base', just as they were in the dialup world. Yes, the average user was only for 20 to 30 minutes a day, but you certainly had users who logged in once a week, and some who stayed connected 24x7. In my experience in selling DSL, while what you count (bytes instead of minutes) has changed, the premise has not.
If you also call 'bandwidth cost' to include all the infrastructure costs required to provide that unlimited service, then
yes,
"bandwidth cost" would be a pretty major part of that customer's cost.
I dunno about that. You have to build a network either way, in any event. The incremental cost difference between building a network and building a bigger network is probably lost in the noise, somewhere around advertising, support, or your CEO going to Scores on the corporate card. Quickly scanning a reasonably sized MSO here in NJ, the numbers are that the operational cost of the network (what they call "Techincal and Operating", which likely includes support) was around 42% of revenue. First, I'd bet their network is not full, or anywhere near full, and that to make their dark fiber do 10ge instead of oc48 or whatever it is they use would be tiny. I am not saying that having an unlimited product would not have an effect on their network, but the answer might be 'who cares.'
(My point of view is Australia rather than the US, but I don't think
14Mbps
of dedicated transit is $50/month even in the US).
If it isn't, it will be. And I'd be happy to sell it.
Current thread:
- Re: An Attempt at Economically Rational Pricing: Time Warner Trial, (continued)
- Re: An Attempt at Economically Rational Pricing: Time Warner Trial Taran Rampersad (Jan 19)
- Re: An Attempt at Economically Rational Pricing: Time Warner Trial Patrick W. Gilmore (Jan 20)
- Re: An Attempt at Economically Rational Pricing: Time Warner Trial Taran Rampersad (Jan 20)
- RE: An Attempt at Economically Rational Pricing: Time Warner Trial Frank Bulk - iNAME (Jan 19)
- Re: An Attempt at Economically Rational Pricing: Time Warner Trial Simon Leinen (Jan 20)
- Re: An Attempt at Economically Rational Pricing: Time Warner Trial Simon Leinen (Jan 20)
- Re: An Attempt at Economically Rational Pricing: Time Warner Trial Matthew Moyle-Croft (Jan 20)
- Re: An Attempt at Economically Rational Pricing: Time Warner Trial Taran Rampersad (Jan 20)
- RE: An Attempt at Economically Rational Pricing: Time Warner Trial Alex Rubenstein (Jan 20)
- Re: An Attempt at Economically Rational Pricing: Time Warner Trial Matthew Palmer (Jan 20)
- RE: An Attempt at Economically Rational Pricing: Time Warner Trial Alex Rubenstein (Jan 20)
- RE: An Attempt at Economically Rational Pricing: Time Warner Trial Frank Bulk (Jan 21)
- RE: An Attempt at Economically Rational Pricing: Time Warner Trial Sean Donelan (Jan 21)
- RE: An Attempt at Economically Rational Pricing: Time Warner Trial michael.dillon (Jan 21)
- RE: An Attempt at Economically Rational Pricing: Time Warner Trial Frank Bulk (Jan 21)
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- RE: An Attempt at Economically Rational Pricing: Time Warner Trial Frank Bulk (Jan 22)
- Re: An Attempt at Economically Rational Pricing: Time Warner Trial Scott McGrath (Jan 22)
- RE: An Attempt at Economically Rational Pricing: Time Warner Trial Frank Bulk (Jan 21)
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- RE: An Attempt at Economically Rational Pricing: Time Warner Trial Rod Beck (Jan 20)
- Re: An Attempt at Economically Rational Pricing: Time Warner Trial Marshall Eubanks (Jan 20)
- RE: An Attempt at Economically Rational Pricing: Time Warner Trial Rod Beck (Jan 20)