When I first heard about offers for 1Gbps for about $100 from companies like Google and Greenlight, I couldn’t understand how it was possible to offer such speeds at such a low price. I think the way it works it that they’re expecting the average data usage to not be significantly higher than cable or DSL connections.
I used to help run a small community ISP. What matters to them is total average data usage, not individual customer connection speed, assuming they own the infrastructure. Commercial internet connections, such as those used by the ISP for upstream, are sold assuming 100% utilization, but usage for consumer connections is expected to be only a tiny fraction of that. For example a 100Mbps connection at only 1% utilization would use 325 GB per month. There is no way Google or Greenlight will let anyone use anything close to full utilization on a $150 per month 1Gbps line. Even a fully saturated 100Mbps connection will use over 32,000 GB per month. Since the ISP’s upstream connection is at more or less full saturation, if their assumptions about customer line utilization fail, the extra usage has to subtract from that used by other customers. The only solution is to cap, throttle, or upgrade to a larger upstream pipe which costs them more money. For example a commercial OC-3 connection which is only 145Mbps costs about $40,000 per month.
In other words, for business internet connections (T3, OCx, etc.), bandwidth is directly related to monthly usage. Everyone except home users have been paying for usage-based internet access for a long time.
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