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Comment by Lev1a | Hacker News Reader

> quotas [...] at your big name ISP it's actually costing them more than you pay for the service

Apart from one-off costs for building the line and associated repeaters and curb boxes, the only real running costs should be occasional maintenance on those boxes, some electricity costs and most likely some out-sourced phone support ("Have you tried turning it off and on again?").

I'm pretty sure the oh-so-convenient-to-ISPs tale of ever-rising costs if customers go past some arbitrary monthly limit (which is a tiny fraction of the possible monthly usage with the advertised bandwidth) is a MYTH and has been known as such for years.

A little napkin-math:

10⁹ x (1/8 B x 1/2 x 3600s x 8h x 8d) = 10.8 x 10¹² B = 10.8 TB/m = 500Mb/s [1] @ 8h per day for 8 days per month

which is much more than the oh-so-magnanimous 5 TB/month budget I read as an example in a comment further up.

[1]: half of the advertised bandwidth

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In the UK, most ISPs don't build from the edge out to their own core. Most ISPs use a shared wholesale network provided by Openreach & BT Wholesale (or Openreach & TT Business, or Openreach & Zen Wholesale, etc).

Customer connections over that backhaul are typically billed at a fixed monthly rate for the line itself, and a separate charge which is consolidated between all customers for bandwidth. That bandwidth cost is one of the largest costs for UK fixed line ISPs that aren't building their own infra. Peering/Transit to the internet is very cheap in comparison.

edit: and the ISP we're talking about primarily does not offshore support. It's all in house & provided by technically knowledgable people who don't just have a script - and they're in the UK.

> Customer connections over that backhaul are typically billed at a fixed monthly rate for the line itself, and a separate charge which is consolidated between all customers for bandwidth. That bandwidth cost is one of the largest costs for UK fixed line ISPs that aren't building their own infra. Peering/Transit to the internet is very cheap in comparison.

Okay? So I guess the bottom line here is "A&A and Openreach both have pathetic pricing models". That's still not much of an improvement.

95th percentile is pretty much industry standard charging for B2B connections (although my understanding of how places like openreach charge ISPs is that it's a bit different to normal 95%) - but it does neatly map to 'you use more data, so you cost your ISP more money to serve you'.

The shared wholesale model does have some advantages though - it means that we can have a wide selection of retail ISPs without having the pot luck of living in the right coverage area - there are cheap and cheerful options, and there are premium options aiming at a more niche userbase - it means ISPs can differentiate on what they do after handover, eg better peering/transit, provision of v4/v6 static addressing, better support, etc etc. It means they get country-wide availability basically immediately without the cost of trying to build out to everyone.

FWIW, there are unlimited ISPs in the UK on the same model, but A&A seem to feel that it is not sustainable in their niche of the market.

Because A&A provide the best service. So you would obviously pick A&A since you're the person who constantly moves huge quantities of data over the network and you'll notice your outages or performance degradation more than most people.

A&A are happy to have you: For a price that reflects their markedly increased costs.

> Apart from one-off costs for building the line...

That's where the majority of the cost is. It may appear to be a one-off cost, but it's a capital expenditure that's huge, and such capex is financially equivalent to an ongoing cost of capital (https://en.wikipedia.org/wiki/Cost_of_capital).

Since individual connections each have some peak bandwidth capacity, that ongoing cost is proportional to peak bandwidth usage. So ISPs need to ensure that they have sufficient capacity at peak time. That's where their costs are.

One way to achieve this is to ignore the problem and effectively throttle customers at that peak time by under-provisioning. Another way is to discourage customers from maxing out their connections over peak times using monthly transfer limits.

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