| 18GB? At a bandwidth cost of $0.20/GB, AT&T is saying that their transit is costing them ~$3.60 per subscriber. That doesn't seem unreasonable.
Given a sample size of 100 customers, AT&T is saying that 98 of them is costing them $352.80. What's the guess on what the remaining users are costing them? About the same? Let's pick a round number of $700 in transit costs for those 100 subs. That means while 98 customers are consuming ~1750GB the remaining 2 are consuming ~1750GB, for a total of 3500GB.
What's the average revenue per sub on those 100 subscribers? $40/month each? That makes my (totally fictional) revenue total $40,000.
So, $700 of transit cost into $40,000 of revenue is 1.75%. And that's with 2% of their users consuming a hugely disproportional amount of bandwidth.
Karl is 100% correct here: AT&T is looking to satisfy investors while protecting themselves from internet video. They are an enormously profitable company that enjoys duopoly status in most of their markets.
If I were a traditional AT&T DSL subscriber I would make it a point to hit 149GB of every month. If I were a U-verse subscriber, I would hit 249GB. If AT&T is telling me they can't eat the minimal cost of those 2% that go over then I should use my service to its absolute "suggested" maximum.
Come on AT&T subscribers, pull an iPhone on their land line network! |
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BiggA
join:2005-11-23
EARTH | They really don't have any way of quantifying per GB cost. It depends on a lot of things. |
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| reply to sherman06810
said by Seth Bloom :
The top 2 percent of residential subscribers uses about 20 percent of the bandwidth on our network.
To update my example:
If transit for 98 of their subscribers costs $350, and those 98 subscribers consume 80% of the transit cost, then the total transit cost is $440.
$440 out of $40,000 is 1.11%. At worst, AT&T is saying bandwidth is 2% of revenue. No matter what way you look at it this doesn't make any sense.
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| reply to BiggA
Aren't they quantifying it precisely by charging $0.20 per GB of overage? I'm making the assumption that this represents their cost of delivering the bandwidth to their subscribers. |
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BiggA
join:2005-11-23
EARTH Reviews:
 ·Comcast
| I would say they are quantifying what they are going to charge the consumer, and that's not really based on delivery cost. At least it's many orders of magnitude more reasonable than $0.25 per text message, where that $0.25 is delivering literally 160 bytes of data, albeit on a circuit-switched network. |
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| said by BiggA:I would say they are quantifying what they are going to charge the consumer, and that's not really based on delivery cost. At least it's many orders of magnitude more reasonable than $0.25 per text message, where that $0.25 is delivering literally 160 bytes of data, albeit on a circuit-switched network.
Given that they don't even pay for bandwidth based on the amount of data one downloads, the cap is ridiculous. If they were truly congested and strapped for cash they would throttle at peak times. Obviously they're not strapped for cash, and provisioning for DSL by a backbone owner like AT&T is insanely cheap. |
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 BF69Premium
join:2004-07-28
Camden, TN | reply to sherman06810
said by sherman06810:Aren't they quantifying it precisely by charging $0.20 per GB of overage? I'm making the assumption that this represents their cost of delivering the bandwidth to their subscribers.
Actually their costs are closer to 1/10 that. |
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