Internet Service Providers know very well that its hard for this world to function without Internet, so don’t be surprised if you feel they are acting pricey at least in the U.S. Take for example Japan, here a multiple-megabit Internet connection costs pennies but in the U.S. a 50-mbps connection costs $99.
According to cable companies (and carriers), it costs a pretty penny to get all that data to your door. Providers have to lease connectivity from the backbone and, as such, they’re forced to add caps to prevent us users from sucking down too much data and bankrupting them. But Mr. Cringeley, in an excellent examination of the real bandwidth costs in America, proves them wrong.
ISPs claim our data usage is going up and so the high costs. In reality, their costs are falling. In fact we end up paying more for services that were overpriced from day one, according to Techcrunch.
Providers are charging for unlimited connectivity while they are actually provisioning a much smaller line. The assumption is that you will use far less than you claim and they can therefore buy a smaller amount of bandwidth per user and assume that, on average, you will never surpass that amount.
Google did this a few years ago when they opened data centers across the country. Instead of transmitting terabytes of information over a long period, they knew the ISP would charge them for their 95% usage rate. Therefore, they transmitted like mad for one night – terabytes of data – and then shut the line off immediately. We can’t do that, but in many backbone arbitrage schemes, carriers can,
We pay the same amount per month but their costs per subscriber are a fraction of that. Now they want to cap us at 250GB, citing the increased costs of serving up video and music. The vast majority of Internet users will never bump up against their artificial ceiling and, for the most part, it would work. However, certain gamers, downloaders, and creative types need that bandwidth and they will pay double just to get another dose. The fixed costs of that bandwidth is going down but ISPs can double or triple up, if need be, forcing folks used to “unlimited” fast Internet to either slow down or pay much, much more.
For now, we’re stuck with the big guys running lines into our homes and then paying a premium for their sub-par service.