Simple as this... Even if you can supply this bandwidth..
1. Avg Customer usage goes up. 2. Over subscription rate goes down. 3. Network costs go up to meet increased demand 4. Per Sub costs go up due to the higher usage 5. Profit per sub goes down. Increase back-end costs but no increase in profit = Bankrupt Company Or you can.. 1. Avg Customer Usage goes up 2. Network costs go up 3. Avg cost per sub goes up 4. Pass cost onto customer Regardless, its business 101. If your costs put you into a position that your existing pricing don't make enough money, you have to, reduce costs, or increase income. The idea is how to do this without loosing customers (some you will anyways). But as Sam said, loose the high end customers that use your network and keep on trucking. Comcast I think did this a while back, dumping around 2000 subscribers, due to their usage! Why do you think also sat connections have that FAP, cause they can't just "upgrade" their backhauls etc Its a major expense. One argument that I have had people tell me, is that the ISP should know this is coming and should have planned for it. Cost of doing business. I don't think that is true, a small increase in usage yes, but we are talking tripling otherwise low usage connections, if not more. ------------------------------ * Dennis Burgess, CCNA, A+, Mikrotik Certified Trainer WISPA Board Member - wispa.org <http://www.wispa.org/> Link Technologies, Inc -- Mikrotik & WISP Support Services* *Office*: 314-735-0270 *Website*: http://www.linktechs.net <http://www.linktechs.net/> */ Link Technologies, Inc is offering LIVE Mikrotik On-Line Training <http://www.linktechs.net/onlinetraining.asp>/* Sam Tetherow wrote: > Of course they want unlimited. I want unlimited as well. But the issue > we are going to have to deal with is, is everyone going to be willing to > pay for unlimited such that those who are on the top end of the usage > spectrum aren't eating our profit? > > How much unused bandwidth do you have on your current network > connection(s)? If one third of your existing customers increased their > monthly bandwidth by 80GB (1.5mbit) during peak hours (6pm to 10pm) > would your existing infrastructure be able to handle the increased load > or would you have to build out more infrastructure. Would your monthly > upstream cost increase and if so by how much? Do you think you would > lose customers if you had to up their rates regardless of their usage > (so that everyone can have their unlimited plan) or do you think it > would be less disruptive upping the rates on the power users only? > > I'm opting for upping the rates on the power users, it will have one of > two effects, either I will collect more from those who use more or I > will lose a customer that is costing me more than I am collecting from > them. Obviously keeping the customer is the desired outcome, but I not > willing to pay for him on a monthly basis. > > On a related note how many people have upped their rates and if so how > have you faired against competition? > > Sam Tetherow > Sandhills Wireless > > Travis Johnson wrote: > >> Hi, >> >> My telephone service is unlimited (home landline with Qwest) and could >> be unlimited cell phone with AT&T or Sprint. My water is unlimited. >> >> People want "unlimited" service so they don't have to guess what their >> bill is going to be. Even my electricity and gas bills can be setup as >> "level-pay" so they are the same each month. The general public does >> NOT want to guess how much their internet bill is going to be... >> especially when they can get Dish or Direct TV for "unlimited" for >> $29.95 and up. >> >> Travis >> Microserv >> >> Sam Tetherow wrote: >> >>> The average person watches 4 hours of TV per day. If we are streaming >>> at 1.5mbit which is somewhere between SDTV and HDTV it is 660MB/hr. >>> This works out to 79.2GB/month per person. On average I would be that >>> there are at least 2 separate TV views per household (kids vs parents >>> for example). This would get us to 158.4GB/mn leaving less than 100GB >>> for all other traffic. >>> >>> If we run the same for HD which is roughly 2.5mbit or 1.125GB/hr we get >>> 135GB/mn per person for HDTV. >>> >>> While 250GB is more than enough by current usage standards if all >>> viewing moves to IP it is not going to take long 250GB to be a pretty >>> tight fit for total monthly bandwidth. >>> >>> I pay by the gallon for water, by the kw/hr for electricity, and capped >>> with overage on cell service. >>> >>> Sam Tetherow >>> Sandhills Wireless >>> >>> >>> Travis Johnson wrote: >>> >>> >>>> Honestly, I don't ever see the model changing to metered billing. >>>> Telephone service isn't that way. Water service (in my area at least) >>>> isn't that way. And yes, some have started, but with 250GB monthly >>>> caps, it's not really even a cap. >>>> >>>> Travis >>>> Microserv >>>> >>>> Sam Tetherow wrote: >>>> >>>> >>>>> I couldn't imagine how the logistics of this would work. What makes >>>>> sense is if your customer uses more bandwidth, then they pay for it. >>>>> Everything else is just an inefficient way to do the same. >>>>> >>>>> Lets say you are going to charge $150/Mb/month for 95% usage (just >>>>> picked a number). If the customer pays the bill for their usage 100% >>>>> comes to you. Now lets say that we have come up with some efficient >>>>> scheme to accurately bill the various content providers for their >>>>> 'usage'. If we need $150/Mb/month and bill at that rate to say Netflix, >>>>> do you think that Netflix is going to have $0 overhead on accounts >>>>> payable for that bill? Do you think they are going to take a loss on >>>>> that expense? So it is going to cost the end customer $150/Mb/month+$x. >>>>> >>>>> This cost will be averaged out to each customer based on total usage. >>>>> As the service becomes more popular then the price is going to go up. >>>>> Wait, doesn't this sound familiar? The problem with selling a commodity >>>>> is that supply and demand laws do apply. The more the demand the less >>>>> the supply. We don't get economy of scale savings in last mile on >>>>> wireless gear. We have a very finite amount of bandwidth we can >>>>> effectively deliver from an AP/tower. >>>>> >>>>> Marlon is the one ahead of the curve on this one (and all the others >>>>> that have been billing based on usage already). This is most likely >>>>> where we are going to end up. I don't necessarily think it will be down >>>>> to $x/GB transfer it will at least be tiered service similar to cell >>>>> phone plans today. >>>>> >>>>> Where WISPs run into the issue is in the short term. We have to survive >>>>> the market until the billing model changes. Eventually Cable and Telco >>>>> (and even Fiber at some point) is going to have to switch from unlimited >>>>> to some form of metered (Comcast and Time Warner are already testing >>>>> this model). They just have the advantage of having better last mile >>>>> bandwidth than we do and they generally get better upstream pricing. >>>>> >>>>> Sam Tetherow >>>>> Sandhills Wireless >>>>> >>>>> >>>>> >>>>> >>>>> >>>>> Scottie Arnett wrote: >>>>> >>>>> >>>>> >>>>>> I read about a model somewhere that might work. The content providers >>>>>> paid the ISP a percentage for delivery of the content. Now I might could >>>>>> live with that if the economics worked out. >>>>>> >>>>>> Scottie >>>>>> >>>>>> ---------- Original Message ---------------------------------- >>>>>> From: "John Scrivner" <[EMAIL PROTECTED]> >>>>>> Reply-To: WISPA General List <wireless@wispa.org> >>>>>> Date: Mon, 24 Nov 2008 10:11:04 -0600 >>>>>> >>>>>> >>>>>> >>>>>> >>>>>> >>>>>>> I think we will eventually see people just leave constant streams open >>>>>>> day >>>>>>> and night. How many of you leave your TV on much of the time whether >>>>>>> you are >>>>>>> watching it or not? This throws off the over-subscription model which >>>>>>> relates to how many people are using the service at one time. When we >>>>>>> start >>>>>>> seeing all channels available at all times via Internet with some common >>>>>>> interface (Netflix, Tivo, Windows Media Player, Real Player, Quicktime, >>>>>>> etc.) then we will have this problem to contend with as well. >>>>>>> >>>>>>> I hope content providers start making all of their content interactive >>>>>>> such >>>>>>> that viewers have to click something (like ads) from time to time to >>>>>>> maintain the free TV service. This would help them to sell their ads at >>>>>>> a >>>>>>> premium and would provide an automatic "off" button for the stream when >>>>>>> people walk away from the "TV" and do not click something once in a >>>>>>> while to >>>>>>> prove they are watching the content and commercials. >>>>>>> Scriv >>>>>>> >>>>>>> >>>>>>> On Mon, Nov 24, 2008 at 8:46 AM, Chuck McCown - 3 <[EMAIL PROTECTED]> >>>>>>> wrote: >>>>>>> >>>>>>> >>>>>>> >>>>>>> >>>>>>> >>>>>>>> I think the canopy 450 will do something like 30 down and 10 up. So >>>>>>>> that >>>>>>>> could give you 20 simultaneously which statistically could work if you >>>>>>>> had >>>>>>>> 50-100 on an AP. >>>>>>>> ----- Original Message ----- >>>>>>>> From: Travis Johnson >>>>>>>> To: WISPA General List >>>>>>>> Sent: Monday, November 24, 2008 7:30 AM >>>>>>>> Subject: Re: [WISPA] NetFlix Streaming Bandwidth Information >>>>>>>> >>>>>>>> >>>>>>>> You have hit the problem directly on the head. You think a simple >>>>>>>> Canopy >>>>>>>> AP is going to solve the problem? Let's say you are allocating 10Mbps >>>>>>>> downlink on this AP... that would mean 5 customers per AP (@ 2Mbps >>>>>>>> each). >>>>>>>> Nobody in this market can survive on those ratios. >>>>>>>> >>>>>>>> This service needs capped and people that want it can pay for "video >>>>>>>> streaming" which is $100/month extra... that would be my vote. >>>>>>>> >>>>>>>> Travis >>>>>>>> Microserv >>>>>>>> >>>>>>>> Drew Lentz wrote: >>>>>>>> In areas like yours, though, some would argue that is the perfect >>>>>>>> place for >>>>>>>> some type of licensed LTE/WiMAX type of service. Even with a Canopy >>>>>>>> type >>>>>>>> service it would beat down the doors of the telco offering only 3Mbps >>>>>>>> of >>>>>>>> service. As more and more devices have bandwidth requirements, the >>>>>>>> service >>>>>>>> providers will fall into line, I believe. >>>>>>>> >>>>>>>> Everyone has always pushed for more bandwidth, but it as always come >>>>>>>> from >>>>>>>> the customers as opposed to the devices. It seems like now, the device >>>>>>>> requirements will leave the customer with no choice and force them >>>>>>>> into a >>>>>>>> decision of higher consumption. >>>>>>>> >>>>>>>> As far as furthering the digital divide, I don't think it will hurt it >>>>>>>> all >>>>>>>> that bad. On the contrary what would be nice to see is the >>>>>>>> communications >>>>>>>> mediums becoming less expensive because of the amount of services >>>>>>>> required. >>>>>>>> Just like the price of bandwidth has changed over the years, I think it >>>>>>>> will >>>>>>>> continue to drop. I would love to see some research data on the cost >>>>>>>> per MB >>>>>>>> over the last 10 years and see what the trend is like. >>>>>>>> >>>>>>>> That combined with less expensive and functional equipment (UBNT's >>>>>>>> Bullet, >>>>>>>> the introduction of Mikrotik years ago, for examples) gives operators >>>>>>>> the >>>>>>>> ability to put more bandwidth than before in users hands at a fraction >>>>>>>> of >>>>>>>> the cost. >>>>>>>> >>>>>>>> I think more than anything it will come down to a backhaul battle. >>>>>>>> Fiber to >>>>>>>> the node, fiber to the AP, high capacity microwave links (Bridgewave, >>>>>>>> Dragonwave, Ceragon, etc) These are all going to be critically >>>>>>>> important to >>>>>>>> aggregate and transport these huge amounts of data. >>>>>>>> >>>>>>>> >>>>>>>> >>>>>>>> >>>>>>>> On 11/24/08 1:06 AM, "Scottie Arnett" <[EMAIL PROTECTED]> wrote: >>>>>>>> >>>>>>>> It will further the digital divide. Rural remote locations will be >>>>>>>> again >>>>>>>> left >>>>>>>> in the boon docks. Where I live, 3 meg DSL is the fastest available >>>>>>>> connection >>>>>>>> at $75/mth. Cheapest T1 here is over $600/mth, and fiber? forget it, >>>>>>>> can't >>>>>>>> get >>>>>>>> it unless you want to build about 4 towers just to backhaul, or pay >>>>>>>> $1200/mth >>>>>>>> for each cell tower to put them on. >>>>>>>> >>>>>>>> Why should the small ISP's foot the bill for Netflix and these >>>>>>>> companies >>>>>>>> that >>>>>>>> are making million's of dollars more than we are? >>>>>>>> >>>>>>>> Scottie >>>>>>>> >>>>>>>> ---------- Original Message ---------------------------------- >>>>>>>> From: Drew Lentz <[EMAIL PROTECTED]> >>>>>>>> Reply-To: WISPA General List <wireless@wispa.org> >>>>>>>> Date: Mon, 24 Nov 2008 00:41:41 -0600 >>>>>>>> >>>>>>>> I'm all for open systems. Limiting the amount of bandwidth at any >>>>>>>> level >>>>>>>> is, >>>>>>>> to me, a terrible thing to do. I understand that it doesn't >>>>>>>> necessarily fit >>>>>>>> the model as it applies to today's business for many ISPs, but, maybe >>>>>>>> its >>>>>>>> time to change the model. >>>>>>>> >>>>>>>> This is where the separation of providers starts to take shape. The >>>>>>>> networks >>>>>>>> that can handle these loads and supply the end-user are going to win >>>>>>>> the >>>>>>>> customers. I honestly think the demand of large scale bandwidth is >>>>>>>> going to >>>>>>>> be fed to the end-user by the consumer electronics market. Look at CES >>>>>>>> last >>>>>>>> year. Look how many devices demand connectivity at certain levels. If >>>>>>>> your >>>>>>>> current service provider can't get you what you need, there will >>>>>>>> always be >>>>>>>> someone else who can. >>>>>>>> >>>>>>>> There is some great info here from a recent conference: >>>>>>>> http://www4.gsb.columbia.edu/citi/events/summit2008 >>>>>>>> >>>>>>>> Take a look at the slides. I like the reference to the slide where it >>>>>>>> breaks >>>>>>>> down how much bandwidth utilization there is expected to be per >>>>>>>> household: >>>>>>>> 35+ Mbps (and those are numbers from 2006!) >>>>>>>> 4 VoIP lines @ 100Kbps >>>>>>>> 2 SDTVs @ 2Mbps >>>>>>>> 2 HDTVs @ 9 Mbps >>>>>>>> 1 Gaming device @ 1Mbps >>>>>>>> 1 High Spedd Internet @ 10Mbps >>>>>>>> >>>>>>>> Scary how quickly it adds up :) >>>>>>>> >>>>>>>> My favorite quote: >>>>>>>> ³By the year 2010 bandwidth for 20 homes will generate more traffic >>>>>>>> than >>>>>>>> entire Internet in 1995² >>>>>>>> >>>>>>>> -d >>>>>>>> >>>>>>>> >>>>>>>> On 11/24/08 12:24 AM, "Butch Evans" <[EMAIL PROTECTED]> wrote: >>>>>>>> >>>>>>>> On Sun, 23 Nov 2008, Travis Johnson wrote: >>>>>>>> >>>>>>>> It will be interesting to see how this plays out... the amount >>>>>>>> of >>>>>>>> bandwidth required to sustain this type of service is not cost >>>>>>>> effective. My upstream costs alone are over $50/Mbps. So if someone >>>>>>>> wants to run a constant 2Mbps stream, my raw cost is $100 per month >>>>>>>> (not including backhaul, support, AP costs, etc.). >>>>>>>> >>>>>>>> Wait until people realize that this type of service isn't going to >>>>>>>> be "free" as they think now.... when they get a $150/month internet >>>>>>>> bill, the $40 for DishTV will look pretty good. ;) >>>>>>>> Even the cable companies are feeling the burn here: >>>>>>>> http://tinyurl.com/3oufk8 >>>>>>>> >>>>>>>> Or a better story: >>>>>>>> http://news.cnet.com/2100-1034_3-5079624.html >>>>>>>> >>>>>>>> I am glad to see these types of reports coming out. The cable ops >>>>>>>> and telcos have been rapidly trying to commoditize Internet access >>>>>>>> services and now they are realizing how stupid that was. In my >>>>>>>> opinion, high profile companies that are setting these limits are >>>>>>>> going to help the smaller guys (that's us) "get away" with what, in >>>>>>>> many cases, we were already doing. BW caps are something that will >>>>>>>> HAVE to happen in one form or another. >>>>>>>> >>>>>>>> <RANT> >>>>>>>> Where are all the net neutrality people now? Why aren't you all >>>>>>>> arguing that something like this is not relevant? Isn't this >>>>>>>> something that you have all asked for? I mean, if I sell someone a >>>>>>>> 2 meg connection, shouldn't they (and everyone else on the system) >>>>>>>> be able to run at 2 meg for the whole month? What difference does >>>>>>>> it make if I am buying a wireless connection, DSL or cable >>>>>>>> connection? In a net neutral environment, should it matter that I >>>>>>>> am streaming this type of content? >>>>>>>> </RANT> >>>>>>>> >>>>>>>> I feel better. ;-) >>>>>>>> >>>>>>>> >>>>>>>> >>>>>>>> ----------------------------------------------------------------------------- >>>>>>>> --- >>>>>>>> WISPA Wants You! 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