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Ask HN: Why is bandwidth so expensive?

by cmorgan8506 on 5/1/18, 9:30 AM with 23 comments

• by chatmasta on 5/1/18, 4:22 PM

  I've gone on rants about this in the past, but I'll keep this one short: it's only expensive if you're purchasing data transfer from cloud providers and paying per-GB.

  For an illustrative example, imagine you have a 1 Gbps (gigabit-per-second) transit line that you are saturating at 95% (~972 Mbps) 24/7. Over a month, you will push 312,075 gigabytes (312 TB) over that line. Amazon transfer pricing is a bit complex to calculate exactly, but for 312 TB you would pay roughly 0.07 per GB for a total of nearly $22,000.

  You can rent a 1 Gbps line for under $500 per month.

  Think of it like buying a pipe. You can either rent the pipe, or access to the pipe. If you rent the pipe, you're buying IP transit. If you rent access to the pipe, you're buying data transfer. When you rent the pipe, you pay based on its diameter -- the capacity of what you can fit through it. But when you rent access to it, you're charged by how much you put through it.

  IMO, this price gouging is the single biggest problem with cloud providers and also leaves a hole in the market. The cloud is pitched as elastic, but it's only elastic so long as your business is not bandwidth constrained. For example, you would not be able to build a competitive CDN or VPN network in the cloud, because you cannot charge your customers for data transfer since your competitors do not charge like that. But you have to pay for their data transfer, even if it all fits within capacity that you could provision for a 40th of the cost.

  I've been interested in this market for a long time. A few years ago I was pitching a startup that invovled this idea. It never came to fruition, but I do have an (unfinished) slide deck that might interest someone: https://docs.google.com/presentation/d/1BJICGRhDL95vdBFg0ZE8...

  If anyone is working on this problem or wants to discuss it, send me an email as I've got a lot of thoughts on the matter and will be working on a project in this space within the next year.

• by jtchang on 5/1/18, 3:38 PM

  IP transit is pretty cheap and is expected to continue to fall in the future.

  For example here: http://henet.p2knowledgebase.com/view/short_post/WnL8B

  You are looking at 1Gbps-on-GigE of $380/mo.

  You can run that 24/7 (sometimes they bill you at 95th percentile) but this looks like it is flat rate.

  So all the data you can transfer at a 1Gbps pipe.

• by z3t4 on 5/1/18, 9:46 AM

  An cable long enough to cross the Atlantic cost a lot. But you can also get 10Gbit dedicated line for $1000 /month with ip transit, so I don't think it's too expensive. The more bandwidth you need the cheaper it gets per Mbit. For a startup I suggest going peer-to-peer (like the bittorrent protocol) to distribute your content. Note that you can still charge for it. That's what Spotify did in the startup. With peer-to-peer it uses the user's bandwidth to distribute the content, so that you do not have to pay for the bandwidth.

• by stephenr on 5/1/18, 11:31 AM

  Please learn the difference between bandwidth and data transfer.

  Bandwidth is a speed, data transfer is an amount of transferred data.

  Yes I’m aware that a lot of hosting companies show it as “bandwidth”. That doesn’t make it right.

  Bandwidth is like the diameter of the water pipe coming into your house. Data transfer is the like the number of litres/gallons sent down that pipe, and measured by the water meter.

  It’s baffling and depressing to me that so many people in this industry get this wrong. It’s like the tech equivalent of the word irony.

• by WhiteOwlLion on 5/1/18, 2:51 PM

  What is expensive?

  You can find places like OVH or Online.net that has dedicated servers with "unlimited" bandwidth. Cost is far less than you'd find with the major cloud services. I had a 10Mbps dedicated server for several years on online.net serving 2-3 TB of video per month. Unless you get hammered with many requests, SATA might be enough, while SSD will obviously offer better performance.

• by stephenr on 5/1/18, 11:33 AM

  Aprt from my mini-rant, data transfer charges vary a lot by host.

  AWS for example, have ridiculously high charges.

  Can you give some rough figures of how much data and how much you’re paying?