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Q: How much does bandwidth cost? ( Answered 5 out of 5 stars,   0 Comments )
Subject: How much does bandwidth cost?
Category: Computers > Internet
Asked by: jonathanclark-ga
List Price: $4.00
Posted: 12 Jul 2002 04:00 PDT
Expires: 11 Aug 2002 04:00 PDT
Question ID: 38874
I'd like to know more about bandwidth cost.  How much do the big guys
pay for bandwidth?  For example what does google or yahoo pay per GB
or TB?  Do they pay for upstream and downstream?  Does price come
significantly with quantity purchases?  What is the cheapest I (as a
small business) could potentially get if I'm not concerned about
reliability.  What about if I want highly reliable bandwidth?  This is
a lot of questions and not all need be answered, I'm looking for a
good general explanation of bandwidth cost and the factors effecting
Subject: Re: How much does bandwidth cost?
Answered By: wengland-ga on 12 Jul 2002 14:18 PDT
Rated:5 out of 5 stars
Greetings, jonathanclark!

You ask for a general explanation of bandwidth cost and the factors
impacting it.  The best place to look is in your own question -- you
have already covered most of the factors!

Bandwidth is generally billed at either a flat rate (1.54 megabits
/second for a whole month), or at a per-unit rate ($1.00 per
gigabyte).  The units can be measured over a period of time, or can be
peak units.  Each bandwidth provider has their own methods of
accounting and billing.

Factors that can raise (or lower) the cost of bandwidth include the
volume needed - obvously Yahoo and Google are going to get a better
cost per unit than you or I would.  They also include the quality of
service -- a 99.99999 guaranteed uptime on the connection with
multiple upstream providers and hot failover protection is a lot more
costly than a simple T-1 from the local RBOC.

Additionally, location is going to have a lot to do with bandwidth
charges.  In a major metropolitan area with many bandwidth providers,
the costs are going to be lower because of competition and exiting
infrastructure.  However, in rural Kansas, getting high bandwidth to
the ranch will cost a signifigant amount more, simply because there
are very few providers, and the line charges (especially if a new line
has to be run!) are more.  Less competition = higher costs.  Less
infrastructure = higher costs.

To address the core of your question, how cheap can *you* get it, I
would need to know a lot more about your situation:  Where are you? 
What do you want to do with the bandwidth?  How much do you need? 
What level of service do you need?  Could you be better served by
colocating your hosts somewhere, and taking advantage of their

For example, if you have an office that needs internet connectivity
for mail and light web browsing, a simple business DSL line for less
than $100 a month would suit you well.  However, if you are an adult
video producer that wants to deliver all the video content over the
web, you would be well suited to colocating your product with a major
firm on one of the backbone lines in California or New York.  You
could still expect to see charges in excess of $5,000 a month.

I hope I have answered your question to your satifiaction.  If you
need further information, please ask for a clarification.

Search Strategy:
Been working this business too long; I know this from memory... Sorry

Request for Answer Clarification by jonathanclark-ga on 14 Jul 2002 02:25 PDT
Clarification:   I am looking for actual numbers and how they are
modified by the factors I listed in my post.  What are some real world
current dollar/ megabit numbers.  Saying "you could pay in excessive
of $5000" tells me nothing.   How much does a T1 at a co-location site
cost?  What about t3, oc12, etc?  What about if I pay per GB?  How
much for rack space?  Obviously as the size of your deal grows in size
there are negotiations taking place, but what are some numbers I might
expect?  Physical location is unimportant to me.  I have co-located
servers and am interested in finding cheaper bandwidth.  I want to
know how much and how ISPs are charged for bandwidth and how much they
mark up the prices they get.  Please also post your qualifications to
answer this question to give the numbers validity.  Sorry if my
original question was not clear enough.  If this is not a quesiton you
can answer, no worries, I will try to cancel and repost it in an
elborate form.


Clarification of Answer by wengland-ga on 15 Jul 2002 07:37 PDT

Thank you for your request for clarification.  You certainly are
looking for a lot of information!  Unfortunatly, I just cannot nail
down the exact numbers for you without knowing exactally what you are
planning on hosting, and making many phonecalls.  That would be
outside the scope of this question.  However, what I will do is go
over your question point by point and try my best to give you some
general information.

> I am looking for actual numbers and how they are
> modified by the factors I listed in my post.  
>What are some real world current dollar/ megabit numbers.  

Ah!  Ok - what I'll do is give you some sample numbers.  These may not
apply to your situation, but will give you a general idea., for example, offers bandwidth for dedicated servers on a
sliding rate. 60 GB per month will cost you $105.00 above the basic
rack and power charges.  You get 30 GB included, sp, dividing that out
comes to about $0.003 per megabyte a month.  (3 tenths of one cent). 
This will vary from provider to provider.

Information Week has an article in their December 18/25th edition of
2000 discussing the dropping price of T1 lines, and mentions that in
competitive urban areas, you can get a T1 line for under $150 a month,
although there will be additional charges above that for connectivity.
In general, pricing for a basic T1 line averages $300 to $500 a month,
while an Internet T1 costs from $900 to $2,500.


> How much does a T1 at a co-location site cost?  
> What about t3, oc12, etc?  

Generally you pay by amount of data transferred, although some charge
you peak or burst transfer rates.  It depends on which colocation
provider you choose.

One provider, NYI, offers a fixed transfer option which would be
roughly equivilent to having your own 'T' line, without the hassles of
local loop charges and phone companies.

NYI offers the following prices:
1.5 MB/sec transfer option = $584 a month.   (~T1 speed)
45 MB/sec transfer option = $17,505 a month. (~T3 speec)
100 MB/sec transfer option  = $38,900 a month

If you wanted to have the lines ran to your business, this chart gives
you some general ideas of the port charges.  This does not include the
cost of the line, which must be determined by the location of your

For example, a T1 at 1.544 MB/sec costs $739 per month.
A T3 at 45 MB/sec costs $11,914 per month.
An OC12 at 622 MB/sec costs $134,912 per month.
An OC48 at 2,488 MB/sec costs $452,712 per month.

> What about if I pay per GB?  

Again, from NYI, here are some sample per GB charges:

20 GB @ 1MB/sec: $99 per month, with $3.50 per gig over
100 GB @ 1.5 MB/sec: $225 per month, with $2 per gig over
4,000 GB @ 50 MB/sec: $12,000 per month, with $2.50 per gig over
10,000 GB @ 100 MB/sec: $30,000 per month with $2 per gig over.

> How much for rack space?  

NYI and many of the other providers throw in the rackspace with the
bandwidth.  Once you get up to the cabinent level, they may start
charging.  For example, NYI charges $450 per month for each cabinet.

> I want to know how much and how ISPs are charged for bandwidth 
> and how much they mark up the prices they get.  

Each ISP is charged a different rate depending on many factors
(again.)  These rates are generally confidential and not available for
discussion.  Also, pricing policies are confidential information. 
This is a completely separate question that falls outside of the scope
of finding you bandwidth.

I hope this information is what you seek, if not, please, feel free to
request a refund.

Search Strategy:
t1 t3 oc 42
bandwidth cost
t1 price
jonathanclark-ga rated this answer:5 out of 5 stars
Well done!  Thanks for the info, the links were very useful.


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