It is indeed strange to see Bell throttle people when they have ridiculous bandwidth caps and extra fees in the first place... One has to wonder if this wasn't planned all along: throttle down the connexions because they were not technically capable to force usage-based billing to their customers. Now that they have figured out that bit, they can get in the lucrative business of reselling bandwidth. And they resell that bandwidth at high price.
Doing the math:
10$/mbps/mth - common datacenter bandwidth, in montreal, over a 100mbps pipe, can vary between 5$ to 40$ according to provider
324GB - 1 mbps constant usage over one month (punch this in the excellent "qalculate": 30 * 24 * 60 * 60 second * 1megabit/second to gigabyte)
125GB - highest bandwidth cap you can get from Bell
0.39mbps - equivalent of that in mbps, constant use, over the month (125 gigabyte / (30 * 24 * 60 * 60 second) to megabit/s = 0,38580247(megabit/s))
59.95$/mth - price of that package
24.95$/mth - price for the 2GB (!) package
35$/mth - effective price for a 0.39mbps commitment
90$/mth - effective price for a 1mbps commitment with bell, over a 20mbps pipe
So. This means that bandwidth is sold by bell 90$/mbps whereas they are paying probably something closer to 10$ or even 5$/mbps, probably even less considering the monopoly and sheer volume. We could also observe how those prices usually also involve a 100mbps pipe, whereas Bell offers you a 20mbps connexion. Of course, those are datacenter prices which do not cover the connectivity costs, but still, one could assume those are covered by the 25$/mth base price.
And i'm not even talking about how competitors of Bell *can't* even offer 25$/mth packages because *they're* base price is over 30$/mth... No wonder they fought so hard to try to charge their competitors based on usage too: it is the only edge they have left. (This is still in the cards, by the way [wikipedia.org].)
I am also ignoring the fact that Bell is also a *content* provider which puts them in a conflict of interest: throttling people and charging them extra for downloading stuff helps them sell their digital TV [wikipedia.org] offerings and other revenues [wikipedia.org]
Doing the math (Score:2)
It is indeed strange to see Bell throttle people when they have ridiculous bandwidth caps and extra fees in the first place... One has to wonder if this wasn't planned all along: throttle down the connexions because they were not technically capable to force usage-based billing to their customers. Now that they have figured out that bit, they can get in the lucrative business of reselling bandwidth. And they resell that bandwidth at high price.
Doing the math:
So. This means that bandwidth is sold by bell 90$/mbps whereas they are paying probably something closer to 10$ or even 5$/mbps, probably even less considering the monopoly and sheer volume. We could also observe how those prices usually also involve a 100mbps pipe, whereas Bell offers you a 20mbps connexion. Of course, those are datacenter prices which do not cover the connectivity costs, but still, one could assume those are covered by the 25$/mth base price.
And i'm not even talking about how competitors of Bell *can't* even offer 25$/mth packages because *they're* base price is over 30$/mth... No wonder they fought so hard to try to charge their competitors based on usage too: it is the only edge they have left. (This is still in the cards, by the way [wikipedia.org].)
I am also ignoring the fact that Bell is also a *content* provider which puts them in a conflict of interest: throttling people and charging them extra for downloading stuff helps them sell their digital TV [wikipedia.org] offerings and other revenues [wikipedia.org]