ISP Data /Speed Cost

Using Fibre or ADSL how is the charge to the ISP calculated?

eg User A on an upto 16mbps downloading 100GB
User B on an upto 8mbps downloading 100GB

What I'm trying to understand is why is a faster connection more expensive?

The wholesale changes to the ISP depend on the charge for the circuit to the customer (where the price usually depends on the technology deployed, the speed band if FTTx, and, in some cases, the exchange Market classification) and the backhaul charges (which are priced primarily on installed capacity and bandwidth).

If User A was on FTTC and User B on ADSL2+, the circuit based charge for User A would be higher.

The bandwidth usage element of the charge is difficult to calculate, as on BT Wholesale (and possibly other providers), it depends when the user downloads the data.


On top of these charges, the ISP has to cover the costs of its core network, data centres, Internet transit and peering, customer service, sales, subsidised equipment, marketing and profit.

In reply to a post by broadband66:

What I'm trying to understand is why is a faster connection more expensive?

In the case of ADSL it isn't, FTTC is a higher charge for the circuit compared to ADSL.

In either case the exact speed you get does not determine cost. If your hypothetical 100 GB was downloaded every night between 2 and 6 am it would probably cost the ISP nothing.

If it was downloaded between 8 and 10 pm it should incur some additional capacity requirements with an additional £/month per Mbit/s cost element somewhere along the line.

I've seen sub 0.5M lines suck up several times more data than some 8M lines on a regular basis, the former would cost the ISP more to service.

"In the case of ADSL it isn't".

Upto 8mbps was cheaper than upto 20mbps.

The 100GB was per month.

What's the physical difference between fibre at 38mbps and 76mbps?

PlusNet charge more for speed and unlimited data so if it's just data that costs then why limit speed?

At the wholesale level there is a price difference between the three fibre speeds of

40/2
40/10
and
80/20

Not massive - a £1 or £2 a month. Which after years of people asking for different speeds at different prices pleases one group.

Up to 8 Mbps is ADSL based
Up to 20 Mbps will be ADSL2+ based and then there are the differences in LLU, MPF, SMPF, WBC, IPStream Connect, IPStream Max, IPStream Max Premium all to explain.