Why isn't bandwidth cheaper?

[Scooter24]

Since there are huge overcapacities (lots of fiber optic cable everywhere - transatlantic cables being used to a few % of capacity) bandwidth should be dirt cheap. Why isn't this the case?

[willybfriendly]

Comparing prices of just a couple of years ago to today, I would say that bandwidth is dirt cheap. There are any number of hosts charging less than $10 a month for the small website, and comparitively low prices for larger traffic sites. On the receiveing end, high speed access is providing 10 X's plus connection speeds for only 2 X's monthly cost of just a couple of years ago. Too much lower, and they would be giving it away. :)

[bill]

There's a company near me in Japan that is offering FTTD service for ¥3800 (~$31 US) per month for 100MB service. I'd say that's pretty darn cheap...:)

[netcommr]

Do you have any idea what it costs to install ->lots of fiber optic cable everywhere - transatlantic cables <- especially at union wages...

[choster]

I think the problem isn't in the trunk lines connecting cities in continents, where fiber is even being allowed to go dark because there is so much capacity, but the so-called last mile problem-- connecting all this bandwidth to businesses and consumers. To lay fiber in cities often requires digging up streets and then repaving them, an expensive prospect.

Also, in the U.S., the telecom deregulation act's attempt to foster competition has instead meant that companies are extremely reluctant to build infrastructure which they must then share with competitors. Here in Washington, the only reliable DSL is through Verizon the incumbent local Bell monopoly, and to get a cable modem you'll generally be talking to the incumbent local cable monopolies, Comcast/Cox/Cablevision. And I'm not paying $60 a month for Internet access.

[Mike_Mackin]

from the August 2001 issue of Business Communications Review

"In its June newsletter, Enron priced an OC-3 from New York City to Los Angeles, for July delivery, at $29,587 per month. By mid-July, the price was down to $16,437 a month for September delivery, and an amazing $1,879 per month for delivery in January 2002.

Russ Matulich, VP sales for the trading and consulting firm RateXchange said the low prices were not an anomaly. "We are seeing that price compression across the board. We are seeing a general, aggressive decline in bandwidth pricing in all major routes, worldwide. In some cases, the prices are falling 10 to 30 percent month over month."

Source [bcr.com]

Can't find a 2002 source that's from a 3rd party

[Scooter24]

but the so-called last mile problem-- connecting all this bandwidth to businesses and consumers.

Agree it's a last mile problem, which however should affect more the websurfers and less the website owners - provided their host has a fast connection to a backbone.

Interestingly my (private) flat rate DSL line has no traffic limit, while my site has. I could theoretically be downloading videos 24h/day.

[keyplyr]

On the end-consumer side, I pay $7.77 monthly for website hosting with 25 gigs of transfer. I pay $29.95 montly for high speed, broadband cable internet service and it's about as fast as the human eye can measure - LOL. Of course, I also use the same cable company for my digital (line) telephone and high def digital TV service, so it's at a discounted rate for each. I feel the expense is very low.