Many people wonder what it takes to provide an uncapped ADSL service, and how much money ISPs make from these services.
MyBroadband asked a well-known ADSL provider to shed some light on the issue, and it provided a formula which is used to calculate the bandwidth cost for uncapped services.
The major components are wholesale IP Connect (IPC), international bandwidth, local transit, and peering costs.
IPC is by far the highest cost, followed by local transit from non-peering providers, international connectivity, and peering.
The bandwidth percentages listed in the formula refer to the portion of bandwidth which is served through the three different components: peering, local, and international bandwidth.
An estimate suggests that around 50% of bandwidth is international, 30% is served through peering points, and 20% is paid-for local bandwidth.
It should be noted that the formula only shows the bandwidth cost of an uncapped ADSL service, and excludes marketing, support, billing, and other admin costs.
This article first appeared on MyBroadband and is republished with permission.
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Theoretically the cost of uncapped data to the user is exactly what he or she pays monthly…but the provider cannot determine his side unless he places restrictions in the equation like the fair use scam. The amount of data a user can use is determined by bandwidth and other network deficiencies and the state of your device and most significantly, by the state of the provider router systems and settings and policies.
Time is constant for user and provider so any saving on the part of the provider comes from devious policies which providers use to throttle or shape or restrict usage to fit into the overall bandwidth they are paying for.