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> it reasonable for a $5/month virtual machine customer to use 1Gbps 24/7/365, potentially consuming $100–$200 worth of bandwidth

It's reasonable for OVH to prevent that, and it's also reasonable for OVH to explicitly and clearly define the limits up front.

It’s also reasonable for OVH to not do that, as most of their customers don’t understand 95th percentile billing, which is the model that they’re being charged at by their transit suppliers.

It’s also reasonable for OVH to not do that, as most of their customers dont understand that transit costs blend with port costs depending on destination, and some destinations are effectively ‘free’ to send/receive from (fixed port costs only, no marginal costs), and other destinations are not (marginal costs associated with transit supplier fees).

The billing model consumers want is a simple BW used calculation, without facing the reality that if they consume their entire BW allowance as quickly as possible, it incurs order of magnitude higher costs than if they consume it at a trickle over the whole month.

kind of true except if you've got 1000's of customers it all evens out and your traffic profile is actually quite smooth if you've got say 6 X 100G transits, 4 X 100G IXP ports and 5 X 100G PNIs then the impact of an individual 1G customer is not even noticeable, honestly. We can work to 1Mbps 95%ile being about 250GB of total transfer at scale.

I completely agree. The product being sold has only a loose connection to the cost incurred by the provider. This is why the product being sold is being sold in a vague / loose-ish way, because for the overwhelming majority of customers, the product being sold can be sold for a profit.

You're acting like it's complicated, but they could just not say "unlimited" here: https://www.ovhcloud.com/en/bare-metal/bandwidth/

Like:

> Generous bandwidth limits*

> *see this link for details

It’s worth going back to the start of this thread and seeing that this all started with someone complaining that their provider had reduced the BW allowance and wanting somewhere with more generous allowances. When the provider sells things for what it actually costs, the customer gets upset and looks for someone selling a subsidised product in a misleading way. Leading to other people getting upset about the mislead. Those people should go to the original provider, who is doing exactly what they asked for!

Doing billing like this is awkward as you just don't know what you are going to get. And, in a world where most people are in fact using small amounts of bandwidth, what you have done is caused people who use small amounts of bandwidth to pay MORE than they should, as they are effectively paying the price of the bandwidth for the average user: if you use less than the average, you are subsidizing the people who use more than the average.

Meanwhile, in an ecosystem where everyone isn't already being ripped off with overly-expensive bandwidth, if an ecosystem-level event happens that causes the average user to suddenly use more bandwidth, the service either has to raise rates for everyone or they have to start claiming some uses of bandwidth are "egregious".

The result is then that, to defend the small-scale user from paying even more than the too much you are already charging them (as they are subsiding the larger users), you suddenly start doing traffic analysis with price discrimination by use case, and network neutrality goes out the window :/.

The real reason any of this works is just that people in fact aren't being charged fair prices most of the time, and these unlimited plans let the provider hide that from all involved. If everyone were charged a fair price, not only would heavy users pay a lot and light users pay LESS than they often do today, but everyone would be paying little enough that this idea that it is a big customer "concern" goes away, the same as it is for electricity or water: except in extreme circumstances, no one frets over sudden utility overages.

View this as an insurance and it suddenly all makes perfect sense. You pay a little more so if this month your usage pikes, you won't get a surprise invoice you didn't budget for, and you won't get cut either. At worst, you'll get rate-limited. This price stability is valuable and paying extra to get it isn't being charged an unfair price. Of course if you don't find it beneficial, you should choose another offering.

This is only relevant because the cost of bandwidth is excessively high--much higher than it should be--and so people essentially need to pay for this gouging-insurance.

This is a for profit business not a limited common ressource being shared.

What you are missing here is that the adjustment is not low usage users subsidising high usage users, it’s OVH margins. Nobody is being subsidised. Low usage users just make OVH more money than high usage users. OVH doesn’t mind because per user costs are actually low and they are already competitive at that price without adding more complexity to their product mix. Users which would lead to an actual loss are rate limited.

If you pay $5 and use $100 of bandwidth costs, you are in fact being subsidized by other users, not by margins. We don't know what OVH pays for bandwidth though.

If I order some shoes from Amazon, I find them uncomfortable, and I return them for a full refund causing Amazon to incur a loss - have I been "subsidised" by other customers?

Personally I would say if Amazon makes a profit selling you a book and makes a loss shipping me some shoes which I return, the loss was paid by Amazon, not by you.

Yet book prices will be adjusted so, on net, Amazon does not lose money.

The comparison is more apt if you gained something (because the bandwidth user gets a product out of it), say by having worn the shoes for a day and doing this every day so you get free shoes for life. Then, yes, it's pretty clear the paying customers are the ones footing your bill

But nobody can do that. OVH doesn't let you be a large net negative.

What happens is roughly that:

- You are costing 1$ (bandwidth, etc.). You make OVH 4$. They are happy. Nobody offers you a cheaper alternative so you are stuck paying 5$ anyway.

- You are costing 4$ (bandwidth, etc.). You make OVH 1$. They are happy as marginal costs are low anyway.

- You are costing more than 5$. OVH severely rate limit your bandwidth to cut their costs and wait for you to leave because the service is now useless to you.

> What you are missing here is that the adjustment is not low usage users subsidising high usage users, it’s OVH margins.

I did not miss this, and it was part of my point: the only reason this makes any sense at all is because these providers are ripping people off on bandwidth, which is how they have a margin so large that they feel a need to hide it from people under this kind of ridiculous pricing abnormality.

What is awkward is just accepting that and helping to make it worse by advocating for making it easier to kind of hide that fact: bandwidth is a commodity product, and these pricing games aren't pro-consumer because they somehow help people not have to worry about one month getting ripped off too much... they are anti-consumer because they enable the perpetuation of the state of affairs wherein people get ripped off in the first place.

The bandwidth providers know this, but they--of course ;P--like their excessive margins... but, if you just stopped claiming this was pro-consumer and realized what was actually going on here, the idea that a margin so excessive as to be able to essentially make the usage for the median user irrelevant should indicate a nigh-unto-ridiculous level of market distortion.

Like, we shouldn't sit around and just tolerate these margins. And that this particular pricing trick helps make these margins a bit more stomached by people really sucks! And in some sense I get it that it does make it easier to stomach... but... only because I think people are just buying into the idea that this must be a reasonable price :(.

And--even then--it doesn't fix the other problem I talked about (which I explicitly hedged as being in the world where the price wasn't set up to gouge everyone): when Facetime came out, it overnight was going to cause everyone with an iPhone to suddenly need more bandwidth, and so network providers temporarily needed to ban it or charge more for it; we see the same thing with the step up to video streaming services from basic web browsing, leading to providers feeling a need to zero-rate.

The reality is that bandwidth IS a limited common resource being shared at that provider--the same as any other product where the price isn't being distorted: this is the whole reason we use markets for this stuff in the first place--and the pricing of it at different providers should encounter market forces to drive it down closer to cost... except we are trapped in a local minimum here by people who refuse to understand that unlimited schemes cost more, not less.

You don't actually tolerate high seller margins. Hosting is a competitive market.

If there was significant gains to be made by being more aggressive on the low end of the market, providers would already be doing it (and they are - OVH 5$ offer is quite aggressive). There is a reason nobody actually offers a better deal.

So, the "fair price" for internet bandwidth in Europe/NA is typically between a tenth and a quarter of a single cent per GB transfered in the heaviest direction.

So you prefer to pay $4.50 for your vm + 47.12126 cents for 460Gb data transfer , rather than $5 for your VM with unmetered data transfer?

I think by the way that the sensible answer is what DO/Linode etc do which is allocate some included data transfer per VM and pool it across your account. That's honestly a very sensible balance from my viewpoint, but they then charge you quite alot for overage around 1-2c per GB which is ~10X the "fair price".

> > is a meter attached

> Yes, of course.

So it's not unmetered as advertised or am I misunderstanding that word?

> this stance also risks degrading the experience for the 99.5% of "normal" customers—those who don’t exploit this simplification of "free bandwidth"

How so? If they want to be relaxed about it, the terms can say that you can burst more (e.g. "you can use 500GB/month, and burst to 5TB for two months of every two-year period; we'll send you a notification email whenever this happens so you're not caught by surprise"). If they don't want to be flexible, they can mention the hard limit that they are going to enforce regardless of whether they call it unlimited without asterisk. Either way, the buyer would know what they can actually use and doesn't have to guess

“Unmetered” means “You will not be charged under normal circumstances based on the measurement of the data you use.” It does not mean that your traffic is literally not measured.

They don’t put a specific hard limit because doing so both limits their own flexibility as a service provider and creates a target for abuse by users.

For some definition of "normal circumstances". Being a bigger user should fall within it or that's not accurate advertising.

Some places will offer a choice between faster metered and slower unmetered. That seems like a good compromise to me. A nice big link should cost the host a single digit number of dollars per 100Mbps, so it's not hard to find an option where everyone is happy with the speed and pricing.

If you want a contract that has every term and circumstance negotiated up front, you’re going to need to speak with Hetzner’s business development team. You’ll also need to be a bigger fish than a single hobby developer.

Hetzner has terms up front just fine. $1/TB.

The unmetered issue involves other providers, and plenty of them are up front about it too.

> However, on the other hand, is it reasonable for a $5/month virtual machine customer to use 1Gbps 24/7/365, potentially consuming $100–$200 worth of bandwidth?

Irrelevant. If you sell a vCPU with enough bandwidth to feed your 1GBps 24/7/365 needs, and you charge $5/month for it, then it matters nothing what's your personal notion of reasonable. What matters is the service plan offered by the cloud provider and the performance indicators they are contractually obligated to meet.

> What matters is the service plan offered by the cloud provider and the performance indicators they are contractually obligated to meet

Indeed, and those indicators are specified in the contract, not in the headline product description. There are a lot of people unhappy that those indicators in this contract are not specific enough. Those people shouldn’t buy these contracts.

(Also, if you use your 1Gbps port at full speed at the most peak time for bandwidth utilisation, for 37 hours in a month, and not at all outside of that, assuming 20 cents a megabit with 95th percentile billing, the costs you’ve incurred to your provider are $200. Also it doesn’t matter at all what you do after those 37 hours, the costs to the provider are the same. You doing 300TB in a month costs the same as you doing 16TB, if you do the 16TB the ‘wrong’ way.)

Thats only true if all your customers choose the exact same 37 Hours (and the same/similar destinations) back in the real world that's very very unlikely and so the 95%ile "issue" is a bit misleading unless an individual customer has the ability to use more than a couple of percent of your overall capacity (rare-ish at scale).

I completely agree. The product being sold has only a loose connection to the cost incurred by the provider. This is why the product being sold is being sold in a vague / loose-ish way, because for the overwhelming majority of customers, the product being sold can be sold for a profit.