Capacity/transit costs vs growth

Thu May 28 03:07:45 UTC 2015

Telco's cost structure model is very different from Cable Co's. Additionally the way they are regulated is also very different.

Based on the additional details you have shared, you are saying that Bell charges $1016/100meg of Colo to Colo Transport ?
Now you also need to add a bit more info, like.
    What type of transport is this ? (Layer 1).. TDM (OC3/OCX) ? SONET ? or Ethernet ?
    Is this connectivity flat rate ? or distance sensitive ?

Keep in mind that the Cost Efficiency in conjunction with Increase in Traffic is/has been only for Ethernet Transport....
not in the TDM or SONET.... 

>>> when you move from 1gbps to 10gbps to 40gbps links, what sort of price/gnps reduction do you get ? 20% ? 30% ?

While the question may be simple, the answer is more of a What if type....

When you move from 1gbps Ethernet Switches, to 10gbps Ethernet Switches you can easily spend between $5,000 to $25,000 for each Ethernet Switch.
So, if you have only 2gbps of traffic, i.e. 1gpbs infrastructure is out of capacity, you have the spend the money for 10gpbs switches, and the cost of the upgrade has to be justified via the increase in traffic of only 1gbs.

I think you should be making the case of total Revenues generated due to increase in traffic to the same location, thus the justification of the need to reduce the per 100meg rate.

I highly doubt if anyone here can give you any reasonable number on what is the cost of per 1G connection when using 10G infrastructure..simply because "10G infrastructure" has different meaning (cost wise) to different folks.

I don't doubt for a moment that you can get consensus that 10gb infrastructure can move 10gbs of traffic at a lower per unit cost, but how much lower will be a very subjective number.  

Regards.  

Faisal Imtiaz
Snappy Internet & Telecom
7266 SW 48 Street
Miami, FL 33155
Tel: 305 663 5518 x 232

Help-desk: (305)663-5518 Option 2 or Email: Support at Snappytelecom.net 

----- Original Message -----
> From: "Jean-Francois Mezei" <jfmezei_nanog at vaxination.ca>
> To: Nanog at nanog.org
> Sent: Wednesday, May 27, 2015 7:54:57 PM
> Subject: Re: Capacity/transit costs vs growth
> 
> On 15-05-27 19:20, Faisal Imtiaz wrote:
> 
> > The above hypothesis why imply that the 20% linear increase is not fair, vs
> > directly making the case that the base rate, set in some point in the past
> > is not fair/appropriate anymore ?
> 
> These rates cover aggregation between an end user's CO and a central CO
> where an ISP connects. For instance, a Toronto based ISP can serve all
> of Bell Canada's DSL footprint by connecting to the Adelaide Street CO
> in Toronto.  BUT, Bell charges $1016 per 100mbps to carry traffic
> between that point and the CO serving an end user. (for Cable, I am not
> 100% sure if it include the fibre to the node, or just aggregation to
> the CMTS).
> 
> there is a separate fixed fee for the "last mile" infrastructure.
> 
> The point i am trying to make that that during the period where usage
> increase, the cost per gbps decreases, so it shgould not be a 1:1
> relationship over time.  Currently, the CRTC sets 1:1 relationship over
> 10 years.
> 
> So having *rough* idea of decreases in per gbps of capacity over the
> years would help me make the point that the current rate structure is
> flawed.  (I don't need precise at this point, just rough ideas).
> 
> 
> Different slant to question:
> 
> when you move from 1gbps to 10gbps to 40gbps links, what sort of
> price/gnps reduction do you get ? 20% ? 30% ?
> 
> 
> 
> 