North American Network Operators Group

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

  • From: andrew2
  • Date: Fri Oct 05 13:13:22 2007

Joe Greco wrote:

>> Technically the user can use the connection to it's maximum
>> theoretical speed as much as they like, however, if an ISP has a
>> quota set at 12G/month, it just means that the cost is passed along
>> to them when they exceed it.
> And that seems like a bit of the handwaving.  Where is it costing the
> ISP more when the user exceeds 12G/month?
> Think very carefully about that before you answer.  If it was arranged
> that every customer of the ISP in question were to go to 100%
> utilization downloading 12G on the first of the month at 12:01AM, it
> seems clear to 
> me that you could really screw up 95th.

First, the total transfer vs. 95%ile issue.  I would imagine that's just a
matter of keeping it simple.  John Q. Broadbanduser can understand the
concept of total transfer.  But try explaining 95%ile to him.  Or for that
matter, try explaining it to the average billing wonk at your average
residential ISP.  As far as the 12GB cap goes, I guess it would depend on
the particular economics of the ISP in question.  12GB for a small ISP in a
bandwidth-starved country isn't as insignificant as you make it sound.  But
lets look at your more realistic second whatif:

> 90GB/mo is still a relatively small amount of bandwidth.  That works
> out to around a quarter of a megabit on average.  This is nowhere
> near the "100%" situation you're discussing.  And it's also a lot
> higher than the 12GB/mo quota under discussion.

As you say, 90GB is roughly .25Mbps on average.  Of course, like you pointed
out, the users actual bandwidth patterns are most likely not a straight
line.  95%ile on that 90GB could be considerably higher.  But let's take a
conservative estimate and say that user uses .5Mbps 95%ile.  And lets say
this is a relatively large ISP paying $12/Mb.  That user then costs that ISP
$6/month in bandwidth.  (I know, that's somewhat faulty logic, but how else
is the ISP going to establish a cost basis?)  If that user is only paying
say $19.99/month for their connection, that leaves only $13.99 a month to
pay for all the infrastructure to support that user, along with personnel,
etc all while still trying to turn a profit.  In those terms, it seems like
a pretty reasonable level of service for the price.  If that same user were
to go direct to a carrier, they couldn't get .5Mbps for anywhere near that
cost, even ignoring the cost of the last-mile local loop.  And for that same
price they're also probably getting email services with spam and virus
filtering, 24-hr. phone support, probably a bit of web hosting space, and
possibly even a "backup" dial-up connection.