Wider Angle: Average Broadband User Costs BellSouth $1/month

According to the BellSouth chief architect, the average broadband user consumes about 2GB/month of bandwidth and costs BellSouth about $1. Hmm. I feel cheated paying $60/month for access. More like robbed.

Setting that aside for the moment, the article points out how video-on-demand could substantially increase the costs for carriers to the point of bankruptcy! Or worse! How dramatic.

The average IPTV user will likely consume about 224 gigabytes per month, he added, at a monthly cost to carriers of $112, a giant leap from the less than $5 attributed to Internet use. If that content were high-definition video, the average user would be consuming more than 1 terabyte per month at a cost to carriers of $560 per month.

“Clearly that’s not what the average user is going to pay per month for their video service,” Kafka said. “That’s why we need help.”

Oh no! BellSouth needs help! And after all they've done for us. Subsidies aren't enough! Either is price gouging! We cannot expect data carriers to keep up with the rest of the market on their own. It's just not fair to them, the corporation we fund. Ladies and gentlemen, strap on your hardhats. Let's go build BellSouth's network for them.

Digg commenter zethris read my mind:

Bandwidth at wholesale costs pennies these days aproximatly .10 per GB. The $1 per user would actually include the other costs for transit of data such as hardware, customer service, operating costs, as well as the advertising, etc. The remaining $18-$40 [ahem, $59 - ed.] is all profit.

The idea that 227gb/mo would cost $112 is also silly. You buy more bandwidth, you pay even less. In addition, the hardware already in place when bought at the 2/gb $1 average per month would still have enough power to deal with the 227gb/mo rate, the customer service would be the same, etc. so much less would have to be purchased now than before. So at that mass of volume, total cost would probably go down to $.25 per 2gb per user per month costing $28.38 at 227gb/mo with a probable retail price of $75/mo or more they still are making over $20 at least per month proffit.

And I think zethris is actually overestimating the final cost on all accounts. I'd be surprised if the price didn't drop to $.10 per 2GB user, or less, if the entertainment industry truly centers around the Internet as its primary means of distribution. DVDs, CDs, cassettes, records, and virtually all other data transmission technologies have seen raw, wholesale prices plummet to almost nothing as the technologies themselves became more and more essential and widespread. It would be a mistake to believe the same thing won't happen in an even more extreme way with the broadband networks.

Setting that aside also (we're running out of room), we should already have 40mbps network connections with fiber lines coming out of our ears since we already paid for them. We should be complaining that they're too slow by now for all the rich media flowing into our homes. But we can't because we don't. Our Internet is run by corporations, lobbyists, and government trolls who think cat-5 only refers to hurricane strength. And even then they don't care.

That's why we need help.