Traffic and bandwidth, revisited

Today, I read a thread in a feedback forum:

http://www.webhostingtalk.com/archive/index.php/t-1052232.html

There is a lot of talk and fuss about what is legitimate use for these 150TB plans, whether download sites or CDNs are allowed, what constitutes a CDN, and what does not, etc.

The entire thread is one single credo for our own traffic policy – as long as it is legal, use it for whatever you want, we reserve the traffic for you, end of story. Yes, this comes at a price, but there is no smallprint. You won’t be capped to a 10mbps port if you exceed your bandwidth allowance, you are not expected to use your traffic perfectly evenly across the entire month all the time, go have some spikes! This is what we call fair – we do not use freerider tactics to give a small group of large traffic users an advantage the majority of negligible traffic users are paying.

Put it the other way round: Assume an ISP has 100gbps of bandwidth available, and sells off single servers with 100TB usage each. That would give the following equation, roughly:

100 x 1000 x 300GB x => 30000 TB / 100 TB = 300 servers

A typical server with such deals will cost you GBP 100 per month, x 300 means the company is reaping 30,000 GBP per month in turnovers before the bandwidth is being oversold.

With 30,000 per month, they will have to cover their infrastructure costs, all staff costs, and all opportunity costs. Even if the company only had one single employee (the owner), this would never pay. So, how do they do it? Quite simple: overselling fully aware that 99% of users will never even come anywhere close to these magic numbers of 100TB per month or more. And for that final per cent, they will (and do, as we see) apply their T&C smallprint, and make a couple of exceptions for those who shout too loud. In the end, there are two winners: the ISP using such practices, and the shouters. The rest, the majority, pays for these.

Often you will also find terms such as <insert large TB number here> OR 100mbps unmetered. 100mbps unmetered will give you 30TB of traffic per month. Why, then, can you choose between options that are SO much unlike each other? 100, 150 TB per month on a gbps will cost the same as 100mbps unmetered? This simply doesn’t add up.

Also, such contracts typically come with a 6 month nicely reduced fee, but then you will be charged the full monthly price – for something you might not even need. If you know you are never going to use 150TB, why pay for them to cover the losses the ISP makes from the small number of customers who actually do use them? Usually, after the initial contract period, these machines could be obtained considerably cheaper if you only paid for the traffic you actually need instead of having to drag that cost around like a ball and chain around your ankle.

Bottom line: again, be careful, ask questions. These T&C are all legit – not nice maybe, but legit – and you need to wade through the smallprint in order to understand what you can expect from these ISPs, and what you cannot.

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