Re: UKNM: RE: UKNM Digest V1 #115

[Nick Sellors]

On Tue, 15 Dec 1998 22:54:49 -0000, "Ray Taylor"

<

taylornmcadplan [dot] com

> wrote:


[bandwidth prices]

>What? As opposed to being overpaid to keep prices artificially high?


If you think anyone who works for an ISP (in the UK) is overpaid,

you're dreaming. If anything, salary levels are lower than in other

market sectors. If I told you what my basic salary is and how many

hours I work, you'd probably have me certified.


>Come on. What's a fair price for a UK ISP service? Ans: Take a quoted price,

>halve it, halve it again, and knock off a few thou' for good measure.


Ok, so we've established that you think UK ISPs charge too much for

connectivity. Let me explain why I believe you're wrong and maybe

you'd like to tell me what a "fair price" for a range of services

is.


>I'll

>bet PSINet UK Ltd charges higher prices than its equivalent operation in the

>US. If I'm wrong, tell me about it.


You're coming at this from the wrong direction. Here, look at this:-


Cost of a T1 (1.544Mb/s) circuit (Bell Atlantic) from central NY to

(one of) our NY PoPs is


Install	$250 (156GBP)

Annual	~$4300 (~2700GBP)


Cost of a 1Mb/s circuit (BT) from central London to our Telehouse

PoP is


Install	4615GBP

Annual	8848GBP


So there's a ~6000GBP pa cost differential just for the customer

circuit and for less bandwidth. The costs for the rest of the UK

network are similarly more expensive.


>UK prices are higher because most UK customers are too stupid to know the

>difference. If PSINet UK can get away with it, good luck to you. Make the

>most of it while you can.


You are mistaken.


Things won't change significantly until the same content is

available from UK mirror sites (and people use them) as is available

from US-based sites. For instance, UK companies hosting their

websites that are aimed at the UK market in the US are pushing up UK

ISPs international bandwidth requirements and are actually making

the situation worse.



Look at it this way - an ISP in the US knows that maybe only 5% of

his offnet traffic is going to be outside of the US because that's

where the main traffic sites are, so why does (s)he need to spend

loads of money on expensive transatlantic bandwidth ?


A UK ISP on the other hand, knows that upto 60-70% of his offnet

traffic is going outside of the UK, so (s)he knows that (s)he has to

invest in expensive international bandwidth, hence the costs of

running the business are higher.


Real world example, from A N Other UK ISP:-


Colocate a server in Telehouse with one full rack.


UK-only[1] traffic	20k pa

Unrestricted traffic	50k pa


You gets what you pays for, maybe you've been asking for the wrong

thing.


N.


[1] The rest of the world can't even see the server

-- 

Nick Sellors			http://www.derby.org/

Views expressed are mine and mine alone, not my employers

PGP Key on Request


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