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

  • From: Andrew Odlyzko
  • Date: Mon Oct 08 09:37:54 2007

As a point of information, Australia is one of the few places where
the government collects Internet traffic statistics (which are hopefully
trustworthy).  Pointer is at

(which also has a pointer to Hong Kong reports).  If one looks at the
Australian Bureau of Statistics report for the quarter ended March 2007,
we find that the roughly 3.8 M residential broadband subscribers in
Australia were downloading an average of 2.5 GB/month, or about 10 Kbps
on average (vs. about 20x that in Hong Kong).  While Australian Internet
traffic had been growing very vigorously over the last few years (as
shown by the earlier reports from the same source), growth has slowed
down substantially, quite likely in response to those quotas.

Andrew Odlyzko

P.S.  The MINTS (Minnesota Internet Traffic Studies) project,

provides pointers to a variety of sources of traffic statistics, as
well as some analyses.  Comments, and especially pointers to additional
traffic reports, are eagerly solicited.

  > On Fri Oct  5, Mark Newton wrote:

  On Fri, Oct 05, 2007 at 01:12:35PM -0400, [email protected] wrote:

   > 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 the Australian ISP's case (which is what started this) it's rather

  The local telco monopoly bills between $30 and $50 per month for access
  to the copper tail.

  So there's essentially no such thing as a $19.99/month connection here
  (except for short-lived "flash-in-the-pan" loss-leaders, and we all know
  how they turn out)

  So to run the numbers:  A customer who averages .25Mbit/sec on a tail acquired
  from the incumbent requires --

     Port/line rental from the telco   ~ $50
     IP transit                        ~ $ 6 (your number)
     Transpacific backhaul             ~ $50 (I'm not making this up)

  So we're over a hundred bucks already, and haven't yet factored in the 
  overheads for infrastructure, personnel, profit, etc.  And those numbers
  are before sales tax too, so add at least 10% to all of them before
  arriving at a retail price.

  Due to the presence of a quota, our customers don't tend to average
  .25 Mbit/sec over the course of a month (we prefer to send the ones
  that do to our competitors :-).  If someone buys access to, say, 
  30 Gbytes of downloads per month, a few significant things happen:

   - The customer has a clear understanding of what they've paid for,
     which doesn't encompass "unlimited access to the Internet."  That
     tends to moderate their usage;

   - Because they know they're buying something finite, they tend to 
     pick a package that suits their expected usage, so customers who 
     intend to use more end up paying more money;

   - The customer creates their own backpressure against hitting their
     quota:  Once they've gone past it they're usually rate-limited to
     64kbps, which is not a nice experience, so by and large they build
     in a "safety margin" and rarely use more than 75% of the quota.
     About 5% of our customers blow their quota in any given month;

   - The ones who do hit their quota and don't like 64kbps shaping get
     to pay us more money to have their quota expanded for the rest of
     the month, thereby financing the capacity upgrades that their 
     cumulative load can/will require;

   - The entire Australian marketplace is conditioned to expect that
     kind of behaviour from ISPs, and doesn't consider it to be unusual.
     If you guys in North America tried to run like this, you'd be 
     destroyed in the marketplace because you've created a customer base
     that expects to be able to download the entire Internet and burn
     it to DVD every month. :-)  So you end up looking at options like
     DPI and QoS controls at your CMTS head-end to moderate usage, because
     you can't keep adding infinite amounts of bandwidth to support 
     unconstrained end-users when they're only paying you $20 per month.
     (note that our truth-in-advertising regulator doesn't allow us to
     get away with saying "Unlimited" unless there really are no limits --
     no quotas, no traffic shaping, no traffic management, no QoS controls.
     Unlimited means unlimited by the dictionary definition, not by some
     weasel definition that the industry has invented to suit its own

   - There is no net neutrality debate to speak of in .au because everyone
     is _already_ paying their way.

  Like I said a few messages ago, as much as your marketplace derides 
  caps and quotas, I'm pretty sure that most of you would prefer to do 
  business with my constraints than with yours.

    - mark

  Mark Newton                               Email:  [email protected] (W)
  Network Engineer                          Email:  [email protected]  (H)
  Internode Systems Pty Ltd                 Desk:   +61-8-82282999
  "Network Man" - Anagram of "Mark Newton"  Mobile: +61-416-202-223