Defiance wrote:
mikkel wrote:
Aside from older BPON installations, Verizon's FiOS is a GPON product. That means 2.4 Gbps in both directions, shared amongst, if I recall their split policy correctly, 32 customers. There's plenty of room for 1 Gbps products. The issue with providing that kind of throughput to customers is that the math breaks down once the people who're actually able to put it to good use start subscribing. If you're a FiOS customer, and you torrent during peak hours (7 PM to 10 PM), then you're costing the company money regardless of which FiOS plan that you have. That's why the jump from 15 Mbps downstream to 25 Mbps downstream is $2/Mbps, and the jump from 25 Mbps downstream to 50 Mbps downstream is $3/Mbps. Verizon know that if they want to even come close to breaking even on customers for whom 25 Mbps isn't enough, then they need to charge through the nose for the next tier.
Could you explain how an individual torrenting at peak costs the ISP money? I don't understand ISP expenses very well, I would've guessed that costs are relatively insignificant after the initial equipment investment.
What costs you money as an ISP, other than infrastructure and maintenance, is transit traffic. That's traffic that isn't going to hosts in your own networks, or networks with which you share traffic freely. In order to reach the rest of the Internet, you need the services of transit providers, who sell individual networks the rights to reach other individual networks through their network. In the hierarchy of service providers on the Internet, transit providers are at the top, ISPs that require transit, but also provide it are in the middle, and ISPs that require transit, and do not provide it are at the bottom. All the money in this hierarchy flows up.
The cost for transit varies depending on a lot of factors, but a good rule of thumb is that the more traffic an ISP has, the cheaper their transit traffic becomes. In the case of Verizon, the cost is likely around $5 per Mbps per month, measured at the 95th percentile. That means that the transit providers keep track of the volume of throughput that Verizon sends to their network, cut off the top 5% of the data points, and take the highest measured throughput from the remaining set. If that, for purposes of illustration, happens to be 100Gbps, then Verizon is billed 100,000 Mbps * $5 = $500,000 for the given month. The actual billing is more complex and depends on more factors, but the bulk of the cost is in throughput measured in that manner.
For a network the size of Verizon's, it's reasonable to assume that in the case of bittorrent, only about 70% of the traffic is destined to hosts on networks which Verizon can only reach via transit. If you're on a 25Mbps connection torrenting at full capacity, then you're likely generating roughly around 17Mbps of transit traffic. If you do that in the peak, then you're adding 17Mbps of data to the 95th percentile measurement, and you're costing Verizon 17Mbps * $5 = $85. Not cool for Verizon, who're selling you that plan for $65/month out of which they need to recover the cost of the free installation, cover the cost per customer connection in terms of network equipment, and cover all the administrative expenses.
Internet is a cash cow for any ISP. It's hugely lucrative, and makes up significantly more of the provider's profit than voice and TV over the same infrastructure does. That doesn't mean, though, that the providers are going to build competitively priced products to the niche of users who are taking away from the bottom line. From a profit perspective, those are the customers you want your competitors to have.
Last edited by mikkel (2010-03-15 21:37:37)
