New York Times Article About Cost Of Data
http://www.nytimes.com/2009/04/20/business/20isp.html?_r=1&ref=technology
All of our economics are based on engineering for the peak hour, said Tony Werner, the chief technical officer of Comcast. Just because someone consumes more data doesnt mean they drive more cost.
Yet even as the providers continually upgrade their networks, the cost of the equipment needed to do so is shrinking steadily, reflecting the well-worn economics of computing.
Indeed, the equipment needed to add capacity to any household costs a fraction of one months Internet service bill. Comcast, the nations largest cable provider, has told investors that doubling the Internet capacity of a neighborhood costs an average of $6.85 a home.
The cost of providing Internet service is about to fall even more, as cable companies install new technology, called Docsis 3, that will both increase their capacity and allow them to offer much faster download speeds.
So far, however, companies in the United States have chosen to use Docsis 3 as an opportunity to offer far more expensive Internet plans. Comcast has introduced a new 50-megabit-per-second service at $139 a month, compared with its existing service that costs about $45 a month for 8 megabits per second. Time Warner just announced it will charge $99 for 50 megabits per second.
By contrast, JCom, the largest cable company in Japan, sells service as fast as 160 megabits per second for $60 a month, only $5 a month more than its slower service.
Why so cheap? JCom faces more competition from other Internet providers than companies in the United States do.
Cable systems in the United States use the same technology and have roughly the same costs. Comcast told investors that the hardware to provide 50-megabits-per-second service costs less than it had been paying for the equipment for 6 megabits per second.