> It doesn't make sense to compare retail prices to wholesale prices.
It very much does. It gives you a sense of real world marginal costs, a fair assessment of fair market value (fair retail cost = reasonable markup factor * wholesale cost) and a sense of scale.
> If an average coder can't even get bandwidth at $0.001/GB with some serious effort,
If I can, you can. I've even given examples with links to order pages. Not that I recommend FDCservers, mind you.
> then how this this a valid point of comparison for how much bandwidth should cost for the average internet user?
It's a valid point because it tells you how much bandwidth ACTUALLY costs compared to what Comcast says it costs.
> I doubt you can get Level3 or Internap to beat HE prices.
How much money do you have on you? There's a bet I'd like to win.
It's not so bad. Less than pumped hydro and conventional batteries and at grid scale. Combined those are big pluses as pumped hybro can't be built anywhere and batteries are not suitable for grid scale.
The question is, what are the life cycle costs? If it's on par with pumped hydro, then we are talking.
HE is just an example, the other transit providers will match and beat those prices at wholesale scales. For an ISP the wholesale rate is the same as the DC rate.
We are not talking about individuals buying retail bandwidth here.
Price discrimination is ok, if it in addition to providing a premium product also makes the good or product more affordable and available to another class of customers, thus creating a consumer surplus. Classic example: air travel.
Comcast's offering is a sham. It makes broadband more expensive for everyone. This is inherently worse.
Price discrimination is only ok if it increases consumer surplus and you have a choice of providers. Comcast fails on the former and more often than not on the latter.
As I said, ridiculously expensive. Nothing inherently wrong with usage fees, as long as they are fair. That being said, usage fees on a consumer broadband product is a really silly idea if charged at less than 10x wholesale rates as we are talking pennies between no usage and 100% usage.
Not everybody wants to be an ISP. Not enough profit in it to make it worth it for the manager. Lack of backhaul and/or cost/difficulty of connecting to backhaul. Existing long term contracts of tennants. High turnover of tennants. Lack of scale.
> Comcast doesn't need usage-based pricing to raise rates.
The best kind of rate raises are rate raises that don't look like a rate raise but effectively is one.
> Put another way, why is it ok to charge less for a capped speed but it isn't ok to charge less for a capped monthly transfer?
Because the monthly cap is far too low and the usage fees are ridiculously expensive. Combined with the fine print 95% of customers are worse off with a monthly capped transfer.
> I wish they would just meter the peak hours -- this way more people would set their backups to run overnight
There are a few problems with this. Firstly, very few users are going to cut down peak usage, because it's during primetime that they have the free time and inclination to use the Internet.
Secondly most people don't even know what a GB is. Thirdly, you assume usage-based fees are meant to curb usage rather than drive profits.
> or services would offer a way to cache episodes locally during the night so you can watch them after work.
Since we are basically talking Netflix here, this is never going to fly with the DRM guys.
This is not a technical problem, as you can see, since the desided outcome can be reached, if you are willing to ignore some legal niceties...
> What is the additional cost to Comcast of the connection being used at, say 95% of capacity instead of 50%?
The marginal cost to Comcast is close to zero, the question is how to account for upgrades if everybodys usage goes up enough to exceed network design capacity.
Regular folk unexpectedly think that the cost of normal network upgrades are included in this so called "monthly subscription fee", but Comcast has real accountants with actual hard copy degrees on their walls that tell us that we need additional "bandwidth usage fees" and "overage fees" to pay for it in the US.
>I've asked this out in the open before and always got blank stares and crazy looks, but how hard/expensive would it be to start your own neighborhood ISP and peer directly with a backbone?
The technical parts are fairly straightforward, what gets hard/expensive is the legal, permiting, construction part.
> What's the up-front investment required and how many users at what price point would be needed to make it reasonable or profitable?
As the old adage goes, if you have to ask then you can't afford it...
> I guess the main problem is still transport to the premises...
Exactly. Rule of thumb is that 90% of network costs are in the last mile and most of those costs are in the last few yards.
Equipment, cables and materials still cost the same, so the comparison is relevant. Even adjusting for PPP, the difference is striking. And to explain the differences, you have to look at external factors, such as competition and regulation.
> Part of the problem is adding capacity in an HFC network is expensive and difficult
Sure, but no more than doing VDSL, which is basically the same thing for ADSL as splitting nodes in a HFC network. A FTTC+VDSL upgrade is about $400 per subscriber which is $17 per month on a typical 24 month contract. That's quite doable and typical network life cycles are much longer, which brings the cost further down.