Category Archives: Data Caps

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How Much Does Data Really Cost an ISP?

For consumers in the US, broadband data can be surprisingly expensive. Since the introduction of data caps, Internet subscribers have been frustrated by overage fees ranging anywhere from $0.20–$12 per gigabyte. The seemingly arbitrary fees are particularly frustrating since it’s unclear how much it actually costs an ISP to deliver that gigabyte. One thing’s for certain — it costs a lot less than the $0.20/GB fee charged by major ISPs like Comcast and AT&T. But how much does it actually cost the ISP to deliver 1GB to a customer? Calculations based on Internet transit costs, as detailed below, suggest an ISP cost per gigabyte measured in fractions of a penny. Using the $10/50GB overage fee quickly becoming standard for broadband… Continue reading →

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Why Broadband Caps Are A Sign You’ll Be Paying More for Broadband in the Future

Data caps and fees for “unlimited” broadband access are a hot topic in the minds of both consumers and Internet Service Providers (ISPs).[1] While data caps may seem like just another revenue source for ISPs, they actually signal a shift towards a new pricing structure. For a full overview of Cable, DSL, and Fiber Optic providers currently listing capped plans, take a look at our complete list here. The Dynamics At Play Before we get into the nitty gritty of the situation, let’s look at the big-picture dynamics at play: First off, large Internet Service Providers are generally public companies, and their priorities reflect that fact: Maximize shareholder value Protect themselves from “cable cutting” Manage infrastructure usage Sell what consumers want… Continue reading →