North American Network Operators Group

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Re: Why do some ISP's have bandwidth quotas?

  • From: Tom Vest
  • Date: Thu Oct 04 13:56:13 2007

On Oct 4, 2007, at 1:29 PM, Justin M. Streiner wrote:

On Thu, 4 Oct 2007, Hex Star wrote:

Why is it that the US has ISP's with either no quotas or obscenely high ones
while countries like Australia have ISP's with ~12gb quotas? Is there some
kind of added cost running a non US ISP?

Depending upon the country you're in, that is a possibility. Some countries have either state-run or monopolistic telcos, so there is little or no competition to force prices down over time.

Even in the US, there is a huge variability in the price of telco services from one part of the country to another.


Hint: whenever/wherever service providers are able to secure the majority of their essential inputs on a predictable fixed cost basis (e.g., circuits rather than variable IP transit), they tend to extend the same pricing model to their customers. However, in some cases there is a major lag separating the timing of the change in the provider-level cost model and the change in customer-facing pricing. Absent competition, the lag may be infinite. In other cases, there may be more variable costs associated with service delivery than is immediately obvious.

Southern Cross was completed in late 2000, and not long after (couple of years) incumbent operators in AUNZ had done a pretty good job of leveraging the new infrastructure to effect just the sort of variable- to-fixed cost conversion described above. Marginal improvements in customer pricing are just starting to happen in the last year or so...