[sllug-members]: ISP bandwidth allocation (Was: Read my blog...)

[Mac Newbold]

Today at 1:24am, Chad said:

> [SNIP]
>
>> The charge is not levied on the customer by UTOPIA, it is levied on the
>> ISP by UTOPIA, who has at its discretion to charge the user or to eat the
>> extra cost by building the average overage fees into the base service
>> cost. I for one don't blame an ISP who passes on the charges that they
>> have to pay to the person who caused them to get charged, rather than
>> passing them to all of us.
>
> [/SNIP]
>
> Taken out of context for a second, I am somewhat confused, and don't
> understand completely.  If an ISP is allocated (for example) 100GB per
> month, and has 10 customers.  Then, evenly divided, these 10 customers
> should be allocated 10GB by the ISP.  So far, so good?  So, let's
> pretend that customer A is using 4GB per month, and customer B is
> using 16GB per month.  And the remaining customers are using 10GB or
> less per month.  Passing the "charges" that customer B has supposedly
> incurred aren't 'passing on the cost to the perpetrator' but instead
> is making additional money for, well, nothing additional.

The ISP isn't allocated a fixed amount. The customer is allocated a fixed 
amount. UTOPIA charges XMission a flat fee for delivering up to 100GB of 
data to/from a customer, but charges more to XMission if more than that 
quota is transferred over that connection to that customer. XMission has 
full choice in how they structure the agreemeent with the client. There is 
an install fee that the customer pays (directly?) to Utopia, but otherwise 
all payment is to XMission. There are several factors that might affect 
their decision. One is obviously how much they have to pay to Utopia on 
behalf of this customer. Another is how much bandwidth they have to buy 
from their upstream providers for traffic going out to the Internet. A 
third factor is the cost of buying, running, and maintaining equipment and 
personnel to provide this service to the customer. More below...

[snip]

> Also, can anyone enlighten me on what the issue is with bandwidth
> costs?  My (again extremely narrow and 'n00b') understanding is that
> the hardware that 'powers the internet' isn't having any more problems
> being used 24/7 than if it were just sitting there (but powered on and
> 'running' but not doing any packet sending).  Meaning, that a
> flat-fee-per-month for unlimited bandwidth totally makes sense.
> Limiting the amount of bandwidth only makes sense if you don't have
> enough switches (or nodes?) in a given area such that too much
> saturation is taking place and network congestion results.  In that
> case, it sounds like you have enough customers to warrant throwing in
> a few more 'nodes'...
>
> Hopefully this doesn't sound like a jab at any ISP, or anyone.  I
> really don't know, and I'm trying to explain what I think I
> understand; and am really asking for some enlightenment to how it
> really works, and why.

The only costs of using equipment more that I can think of are increased 
power drain and increased cooling costs (which are much more significant 
than one would think), assuming you're not yet reaching saturation and 
providing degraded service like you mentioned.

It costs an ISP relatively little to provide a ton of bandwidth within 
their own network, because it is easy to dramatically overprovision it 
usually. It is the bandwidth they have to buy from their upstream 
providers that is influencing cost more. Most people want to talk to the 
whole internet, not just the network of their provider. (This works 
similarly in cell phones, I bet - thus the reason they'll give you cheaper 
rates for talking to people where they can service the whole connection 
themselves instead of having to pay to connect to other providers, but I'm 
not entirely sure about the details in that domain.)

In this case, I don't really understand how the Utopia network has 
increased costs for users that send more than 100GB/month of data to/from 
their ISP, except for the overall congestion and need to upgrade to 
accomodate higher overall use. Utopia only connects customers to ISPs, and 
doesn't connect anyone to the internet directly, so they have no upstream 
bandwidth costs. In fact, the ISPs (and customers, through the ISP) are 
both paying _them_ for their service. Their costs are equipment and 
running the fiber, and some installation and customer service. My 
understanding is that they own their whole network, and don't have to pay 
anyone else (i.e. qwest) for lines, bandwidth, space, etc. So the only 
reason I can think of why the quotas reflect a point where they have 
increased costs is in the capacity of the infrastructure itself. If they 
built out their network at 100Mbps for example, then if they get more and 
more people who are using the network more heavily (475GB/mo is 1.5Mbps 
constantly or average, equivalent of maxing out a T1 line 24/7/365) then 
they've got to put in more equipment and upgrade things to be able to 
handle it, which costs money. So the quotas are a way to charge the people 
who are most responsible for forcing the increased costs, without needing 
to drive up the base price for everyone.

I don't work for Utopia, nor XMission, this is primarily information I've 
gathered from talking with XMission employees, and from what I've learned 
about the service structure, terms, and pricing models that Utopia uses 
and that XMission uses in pricing it's Utopia connections. So if anyone 
has better information, I'm interested in hearing it. This is my 
understanding, and I may have some facts wrong, or may have filled in some 
gaps with mistaken assumptions or guesses. Other Utopia providers may have 
different pricing models in which they don't pass along the "over quota" 
costs to the customer in the same way.

/me keeps looking for new office space in Murray with Utopia...

Mac

--
Mac Newbold		MNE - Mac Newbold Enterprises, LLC
mac at macnewbold.com	http://www.macnewbold.com/