I ran an ISP. Most people max their bandwidth for: backups, downloading Steam games, torrenting, and then about a week later their usage drops to about 5-8mbps sustained for Streaming and Videoconferencing.
Like if I pay for a 300mbps but I need 1gbps for the day you can charge me 5 bucks extra per day that month.
Are the unit-economics of this that bad? I never understood why ISPs have such crappy/unflexible pricing tiers. Mobile carriers are way ahead on this type of flexible offering and the math seems to work.
garanteed bandwith + max bandwith
You buy a 1gb line with 50mb guaranteed. That would allow you to use it in the night to a full extend while your ISP doesn't need to provide 1gb all the time
It's a bit cheaper to prepay for an extra 100 Gb than it is to eat the overage chargers. Nothing for speed, though it would be great to get a boost for big videoconferences.
Wholesale bandwidth is 5 cents per Mbps or less at scale. Not that the ISP pays for all bandwidth, peering and CDN traffic is free.
In other words, even if you max out a 1 Gbps line 24/7, you are only costing the ISP $50 per month.
Add to that that most people are unable to consume even 10 Mbps on average and bandwidth costs become less and less of an issue. An average subscriber will use 2-4 Mbps of bandwidth during primetime, and primetime is all you care about as an ISP.
Nothing in this means that offering bandwidth on demand is impossible or a threat to the ISP business model.
It’s just that the overhead of offering an on-demand product to consumers isn’t worth the time and effort, as you’d be making peanuts while having to deal with a lot of grief.
Bandwidth on demand is a thing for businesses and operators. A good example of this is Megaport, who offers virtual cross connects and transport. Price start from $100 per month plus a varying fee per Mbps, from a few cents to a few dollars per month.
4k Netflix is around 15 Mbps alone, even 1080p is >5 Mbps.
And with games being now > 100 GB downloads these days, I would expect that to contribute meaningfully too to the bandwidth usage even if average person probably doesn't quite download new games daily.
Netflix is only about 30% of all Internet bits, and there's a limit to how much Netflix and chill anybody can do.
3 GB / hour to Mbps = 6.667 Mb/s https://www.wolframalpha.com/input/?i=3+GB+%2F+hour+to+Mbps
7 GB / hour to Mbps = 15.56 Mb/s
In bandwidth sure, but the world isn't wired that way. There's a bottleneck somewhere between the ISP and the customer, that can't support all customers on that link running maxed out. In the gym analogy, even if the gym has 1 treadmill per customer, that doesn't help the shortage of weight machines. An ISP may choose to (or choose not to) invest in adding capacity to remove bottlenecks, but that's additional capital outlay that may not be prioritized or budgeted for.
You can support 5x the bandwidth at 50% of the cost and 20% of the labor than you could in 2005-2010.
And, as I wrote before, in no real life scenario will all 100% of subscriber be running their line at full tilt 24/7.
Engineering a non-blocking 1 Gbps network isn't particularly hard or expensive using FTTH.
My ISP is a "small" provider that focuses on multi-unit urban residential buildings in the midwest. Their business model is to make an agreement with the building management and provide a baseline service to every unit, while offering upgrades and extra services to individual units that want them. They have an incentive to provide far more capacity than the baseline so they have room to offer upgrades.
I pay $25 per month for 250mb symmetrical and am definitely getting those speeds 24/7. I have the option to upgrade to 1G symmetrical for something like $500 per year, but haven't seen the need.
Unless an ISP is serving a very low density customer base, the cost of building out full capacity just isn't prohibitive anymore. My ISP only has around 20,000 customers and they have direct peering with Netflix, Amazon, Apple and others - clearly an ISP doesn't even have to get very large before those cost benefits arrive.
For example, Brazil literally has thousands of tiny ISPs, each with, at most, a few hundred customers. They operate on the narrowest of margins, squeaking out close to no profits. They cut corners everywhere. They definitely do not have spare capacity, and over sell by insane percentages.
Another example, Mongolia, where there's basically just one ISP, the government owned Unitel. They have zero incentive to do anything extravagant, or even provide good service. Its a monopoly.
The cost of building out full capacity is very much still a limiting factor in many parts of the world.
I imagine ISPs do not do this, because of how they sale their service. They want to make it hard for you to get out of the deal you're in, and hopefully in a carrot kind of way where you feel like you're getting a better than normal deal so you don't want to leave.
Giving people the flexibility to change their plan willy-nilly is goes against how most ISPs sell their service. They want to lock you in, not give you free range.
The exception is internet cafés and hotel internet. I could see something like this for cell phone top up plans, but most of those just resell what's available, which means them giving all of the bandwidth they can get.
This seems like a fundamental problem people should be demanding changes to rather than just accepting it as the way it is.
This is the difference between consumer and business Internet in many cases, and is why so many residential services severely limit the outbound bandwidth: it competes with their extremely profitable business service levels.
(Things may have changed, I haven't been involved with ISPs for 5 years)
Also a day of 300 Mbps would not have cost you thousands of dollars as you get 36 hours for “free” when using 95th percentile billing.
As far as $0.1/Mbps, not common around here. Maybe in CA at HE or something, but I can't touch that price around here. Correct me if I wrong, but Amazon's price for a megabit/mo is $55-ish...
At scale means purchasing bandwidth in quantities of 100G. You'd be surprised how straightforward it is to get reasonable wholesale bandwidth rates almost anywhere once you cross a certain monthly spend threshold.
As to the 95th percentile thing, sure, if you've already used up your "free" burst capacity, pushing a further 300 Mbps for a day will push you over the limit.
And if you are a residential ISP you can probably handle 80% of your traffic by peering at a few internet exchanges (google,youtube, netflix, etc.)..
So the wired ISP doesn't save too much money when you don't use your BW.
Could boost to 100 anytime with one click, but it was ~1 Euro per hour. Used it once lol
They gave up on it, probably because no one used it. Maybe if the price was right.
But technically, it seems easy to implement, at least on some network configs.
But the fixed rate contract for high speeds is likely more profitable for the ISP.