Interesting People mailing list archives

Re: cost of 1 gig


From: David Farber <dave () farber net>
Date: Tue, 14 Apr 2009 06:13:19 -0400



Begin forwarded message:

From: James Seng <james.seng () gmail com>
Date: April 14, 2009 5:26:12 AM EDT
To: Dave Farber <dave () farber net>
Cc: ip <ip () v2 listbox com>
Subject: Re: [IP] cost of 1 gig

Ignoring the math aside, and I doubt time warner pays their bandwidth in blocks of T1, let's use market rate of CDN as a basis, you can get about 20cent/GB. Larger players can get below 10cent. (Disney for one gets that price as far as I know).

Of cos pricing varies depend how far you are from the exchanges but CDN pricing is as good estimate as you can get, bear in mind the price I quote above is US market rate, profitable to CDN operator.

Sent from my iPhone

On Apr 14, 2009, at 5:05 PM, David Farber <dave () farber net> wrote:

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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