[SATLUG] OT-Time Warner Download Cap

Mark Spieth marks at teamcmi.com
Fri Jun 6 10:04:16 CDT 2008

"Bruce, you are "Right On!". This is a "Red Herring" like oil 
demandexceeds supply or Iraqi WMD's."

I would be happy to debate the point of this being, as you put it, a "Red Herring" as the subject of this thread is partially related to part of my Doctoral Thesis in Cultural Anthropology in regards to how Internet usage effects and changes the cultures where internet is widely available and the ramifications of such a change in society. So, since you feel this is a "Red Herring" would you care to elaborate on your statement?

Businesses in general have a very simple concept, buy or manufacture 
something mark it up and resell it for a profit. One of the few 
exceptions to this is ISP’s. Since they pay way more per Mb for 
bandwidth than they could ever sell it for, they hope that the average 
user will not use most of their available bandwidth.

So let’s look at the realities here.. Today you can purchase a 7mb link 
from Time Warner for $46.95 per month. That equals $6.70 per month per Mb.

Now let’s look at the other side, about the cheapest you can get a DS3 
(45Mbs) for is around $8000.00 per month which equates to $177.78 per 
month per Mb, or you can get a T1 for $600.00 per month which equals out 
to be $400.00 per month per Mb.

So using those numbers, if Time Warner San Antonio has only 250,000 
people on its cable modem system, each at the highest rate purchasing 
only internet at $46.95 per month, and only looking at bandwidth costs, 
here is what you end up with.

If each user sustained only 1Mb using the above numbers and accounting 
for revenue of $11,737,500.00 (250,000 X $46.95) then the cost to TW to 
have that amount of bandwidth available would be $44,445,000.00 creating 
an immediate loss of -$32,707,500.00. Now since they have more than 1 
DS3 there is a price drop so these numbers are not 100% accurate, but 
even if they got the DS3 at 50% of what the rest of the world pays, they 
would still lose more than 16 million a month, and the numbers get worse 
as you use more bandwidth.

Now if you think that “Partnering” is going to make up for that, you are 
sadly mistaken. What exactly are you going to cache to make up for that 
much of an offset in bandwidth? Do we cache Youtube, and the pirated 
movie sites, streaming barnyard animal porn, all the Linux distros, 
Microsoft updates?? I mean come on; we are talking about Petabytes of 
data here.

“There are 10 other countries that beat the US cost per megabit… On top 
of that, the US is 14th in speed.”

While this may be true, this is a prime example of one using a statistic 
to prove ones point, without looking at all the other factors involved. 
Yes your right per mb they are cheaper, and statistically they do have 
faster speeds” Having been to the UK many times, I can tell you why this 
is. First off, the UK like many other European countries is small, the 
demands of putting in the infrastructure is significantly less than it 
is here in the United States. In fact Great Britain as a whole is 1/3 
the size of Texas, let alone the rest of the country. That’s like saying 
my office has a gigabyte network in it, so why doesn’t my entire city? 
There is a big difference in cost in putting in high speed networks 
across 93,000 square miles than there is putting it in 3,537,000 square 
miles. If we tried to bring the US in general up to the same speeds the 
UK has, your internet costs would go up just to cover the infrastructure 
costs, and then you could be complaining again. Furthermore; the Numbers 
in the US are dragged down my people like me who live out in the country 
where high speed internet is not available, and is not likely to be. How 
can you justify pulling in that kind of bandwidth to where I live? I 
live 15+ miles outside of the city of Bandera, assuming the city of 
Bandera had that kind of bandwidth, the cost would be astronomical since 
the 15 mile stretch between me and the city is probably owned by 3 
people. The cost of running the fiber alone would prevent anyone from 
doing such a thing. It’s because of this that our numbers appear lower. 
Although the main cause is infrastructure costs.On a final note about 
the Uk.. We moved a ton of sites that were High Profile sites for the UK 
to the US, Why? Because after 4 datacenters there 1 in Leeds, 2 in 
London and 1 Birmingham we couldn’t find one that was worth a damn. 
Besides.. Just because they pay less per mb doesn’t mean anything, they 
also pay double for gas, and we are not the UK so comparing many aspects 
of the UK and saying they do X so we should do X without looking at all 
the other factors involved is just ignorant.

So… Boy those damn evil Time Warner people… How dare they buy bandwidth 
for $177.78 per month, charge us only $6.70 per month (Less than 4% of 
the cost) and then need to limit our download amounts because we feel 
justified to get more and pay less.

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