too many people think broadband costs are only what wholesale charge for the port.
there is 2 obvious reasons.
1 - burst speed costs money, it increases peak time demand so as such increases backhaul costs. this is something a lot of people on this forum have never understood.
Hmm. Netflix increases peak time demand, burst speed not so much across a wide cohort. Where there are relatively small numbers of people in the cohort it can certainly make a lot of difference, however across a wide customer base the effects of increasing data rate aren't as great as many would think.
Obviously going from sub-1.5Mb to 70Mb as I did is a big behaviour changer, however I have settled at a peak usage way below the 50-fold increase in burst speed. The main difference with what I'm doing isn't download volume, it's jumping from SD to HD video. I imagine this would go for most on such low speeds previously, however those who were already able to watch in HD aren't going to have a massive behaviour shift.
BT Wholesale have statistics for this. The main driver for bandwidth consumption isn't the headline speeds, it's Netflix. People who do the same things they did before use more bandwidth for less time and it averages out.
The main instances where increasing headline speed really increases usage are on upstream more than downstream. People can up their P2P rate limit.
Netflix usage caught Sky, VM and others completely off guard. The congestion on the BT Wholesale, Sky and VM networks is directly attributable to increased usage of high quality streaming video. Whether a customer has 330Mb FTTP, 152Mb cable, or 38Mb FTTC they will still pull Netflix in Ultra HD. Where those speeds make a difference is downloads, and across a cohort as downloads finish more quickly on the higher speeds the actual overall peak usage per customer doesn't increase much.
Do the maths on these products, you'll see the proportion of the costs allocated to bandwidth versus the port costs is pretty minimal. An 80/20 FTTC service is £9.95 a month, not including VAT which obviously puts it up to £11.94 before it's left the exchange.
Then you have the costs of transport on the BT Wholesale network, the cost of the MSIL between BT Wholesale and Plusnet, then all Plusnet's network, admin, etc, etc costs.
The actual proportion of the pricing allocated to handling the 'burst speed' there is tiny.
Edited by deleted (Thu 26-Jun-14 16:13:12)