Comments on: The problem with cost per Mbps comparisons http://www.digitalsociety.org/2009/10/the-problem-with-cost-per-mbps-comparisons/?utm_source=rss&utm_medium=rss&utm_campaign=the-problem-with-cost-per-mbps-comparisons Pro-Culture, Pro-Commerce Thu, 08 Dec 2011 00:48:15 +0000 hourly 1 http://wordpress.org/?v=3.0.3 By: NickRBrown | Blog | Net Neutrality: A Faster Internet. How? http://www.digitalsociety.org/2009/10/the-problem-with-cost-per-mbps-comparisons/comment-page-1/#comment-21702 NickRBrown | Blog | Net Neutrality: A Faster Internet. How? Mon, 27 Jun 2011 08:22:01 +0000 http://www.digitalsociety.org/?p=816#comment-21702 [...] [...] [...] [...]

]]> By: Preparing to Pounce: D.C. angles for another industry — Technology Liberation Front http://www.digitalsociety.org/2009/10/the-problem-with-cost-per-mbps-comparisons/comment-page-1/#comment-1253 Preparing to Pounce: D.C. angles for another industry — Technology Liberation Front Tue, 20 Oct 2009 03:43:40 +0000 http://www.digitalsociety.org/?p=816#comment-1253 [...] George Ou explains, the international data on broadband “speed” and prices are highly suspect. Benkler [...] [...] George Ou explains, the international data on broadband “speed” and prices are highly suspect. Benkler [...]

]]> By: Bret Swanson - Maximum Entropy » Blog Archive » Preparing to Pounce: D.C. angles for another industry http://www.digitalsociety.org/2009/10/the-problem-with-cost-per-mbps-comparisons/comment-page-1/#comment-1239 Bret Swanson - Maximum Entropy » Blog Archive » Preparing to Pounce: D.C. angles for another industry Mon, 19 Oct 2009 19:41:32 +0000 http://www.digitalsociety.org/?p=816#comment-1239 [...] George Ou explains, the international data on broadband “speed” and prices are highly suspect. Benkler [...] [...] George Ou explains, the international data on broadband “speed” and prices are highly suspect. Benkler [...]

]]> By: George Ou http://www.digitalsociety.org/2009/10/the-problem-with-cost-per-mbps-comparisons/comment-page-1/#comment-1149 George Ou Tue, 13 Oct 2009 23:50:14 +0000 http://www.digitalsociety.org/?p=816#comment-1149 Rural areas are more like $100 per Mbps for backhaul but this is largely a function of economy of scale and the cost of the long-haul connection to somewhere remote. If you tried to buy dedicated backhaul bandwidth in urban centers at quantities of 1.554 Mbps, you're still going to pay $200 per Mbps. If you're in a major metropolitan area where the fiber has already been laid by someone like Verizon Business Network, I've just gotten a quotation for dedicated bandwidth at $28 per Mbps for a fully saturated 155 Mbps OC-3 circuit. But again, you're not paying for a last mile(s) circuit because the fiber is already there. If you were 1 mile off the fiber "grid", you'd have to pay another company for a lease line to connect to close the gap to get to the backhaul provider and that would cost you more money. If you're 100 miles away, you can expect that lease line to cost a LOT more money because someone has to trench 100 miles of fiber for you. So the two factors that determine very large differences in backhaul cost is the distance of the lease line and the quantity that you purchase. If you're a small rural operator and you only need 4 Mbps of backhaul and you're very far away, it's normal to be paying high rates. This is no different in any other country including Japan. The main point I tried to raise in this article is that you cannot compare multi-dwelling unit costs to single family home costs. The MDUs already laid the access portion of the network using Category 5 or 6 Ethernet cabling (which only works when your distances are less than 100 meters), but this cost is borne by the rent that tenants pay and it's hidden from the cost of the Internet connection. Rural areas are more like $100 per Mbps for backhaul but this is largely a function of economy of scale and the cost of the long-haul connection to somewhere remote. If you tried to buy dedicated backhaul bandwidth in urban centers at quantities of 1.554 Mbps, you’re still going to pay $200 per Mbps.

If you’re in a major metropolitan area where the fiber has already been laid by someone like Verizon Business Network, I’ve just gotten a quotation for dedicated bandwidth at $28 per Mbps for a fully saturated 155 Mbps OC-3 circuit. But again, you’re not paying for a last mile(s) circuit because the fiber is already there. If you were 1 mile off the fiber “grid”, you’d have to pay another company for a lease line to connect to close the gap to get to the backhaul provider and that would cost you more money. If you’re 100 miles away, you can expect that lease line to cost a LOT more money because someone has to trench 100 miles of fiber for you.

So the two factors that determine very large differences in backhaul cost is the distance of the lease line and the quantity that you purchase. If you’re a small rural operator and you only need 4 Mbps of backhaul and you’re very far away, it’s normal to be paying high rates. This is no different in any other country including Japan.

The main point I tried to raise in this article is that you cannot compare multi-dwelling unit costs to single family home costs. The MDUs already laid the access portion of the network using Category 5 or 6 Ethernet cabling (which only works when your distances are less than 100 meters), but this cost is borne by the rent that tenants pay and it’s hidden from the cost of the Internet connection.

]]> By: Nick Brown http://www.digitalsociety.org/2009/10/the-problem-with-cost-per-mbps-comparisons/comment-page-1/#comment-1148 Nick Brown Tue, 13 Oct 2009 22:57:53 +0000 http://www.digitalsociety.org/?p=816#comment-1148 Nice post George. It may also be noted that average wholesale backhaul prices for connection to an Internet backbone can run below $10/megabit in urban areas while rural area providers may be paying up to $300/megabit. It is possible that since the US has less densely packed urban environments in comparison to Japan, the average cost per megabit is raised in some organizations research tables. In future studies from organizations like the ones mentioned in your post, it may be more balanced to separate urban and rural rate structures. Nice post George. It may also be noted that average wholesale backhaul prices for connection to an Internet backbone can run below $10/megabit in urban areas while rural area providers may be paying up to $300/megabit. It is possible that since the US has less densely packed urban environments in comparison to Japan, the average cost per megabit is raised in some organizations research tables. In future studies from organizations like the ones mentioned in your post, it may be more balanced to separate urban and rural rate structures.

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