Breakdown of Bandwidth Costs?

WCityMike asks: "What is the origin of the cost of bandwidth? For instance, if I'm being charged for an apple, I know that, theoretically, the cost of that apple is going towards the purchase of apple seeds, the land on which the apple trees are grown, the fertilizer and water that helps the trees grow, and the salaries of those who pick the apples, clean them, box them, and send them to market. When an Internet provider charges someone hundreds of dollars in bandwidth costs because they were Slashdotted (or Farked) and their bandwidth use shot up, what costs have the Internet provider incurred, and why does it cost them what it does? Is there usually any sort of markup going on along the line, or are people just passing along their own expenses down the line to the end user?" It would be interesting to note the most important factor contributing to bandwidth costs. How much of the total costs are tied to infrastructure versus the human component (technicians, sysadmins, technical support and so forth)?

buying an apple?

[spacedx]

I had always thought that if you were being charged for an apple, that cost was actually going towards Steve Jobs' personal Gulfstream V jet?

the real costs of bandwidth

[kraksmoka]

well, kind of like an apple, it all starts with the seed money from unwitting investors who realize not that their hard earned money is about to be thrown in a hole in the ground. then companies hire construction folks like Mas Tec (Miami, Fl) to quickly and quietly plant the seed money along with some fiber optic cables, or repeater boxes with really expensive chips, or whatever the potential bandwidth provider needs to throw into the hole to make some /.'ing possible. then, once the investor and the company throw all their money into said hole, a wonderful economy based on advertising emerges and the bandwith is carried to market by all the mom and pop bandwith growers and sold everywhere from local farmers markets to big grocery stores. UH OH, advertising didn't work! now we have to pay the saps, er investors, who gave us their money to pour into our special hole, something called a return on investment in a hole. ok, we'll either declare bankruptcy, or now, we'll charge alot of money for bandwidth for a while since our humble little hole grew into a mountain of debt.

and everyone lived happily ever after (except for northpoint, directv dsl, worldcom and anyone else who didn't own a regional telephone monopoly to cover idiotic spending levels and tremendous waste). the end

Costs you don't know about

[Mononoke]

I know a person that makes a healthy sum of money (enough to support a family easily) to sit and watch people dig near buried fiber runs. That right, he just sits in his truck and watches.

It's cheaper for the fiber owner to pay him to be on-site than it is for them to lose the money on lost bandwidth should the cable be cut and communication be down for an hour or two of response time.

He does have to re-certify on his splicing ability a few times a year, but that's about all he really does.

yes, however

[zephc]

If they simply used an Interocitor [shipbrook.com], a device that can lay roads at a mile a minute, it can of course also lay cable, cheap! DIRT cheap! Just gotta get those folks with the funny, large heads to sell em....

Re:How we do it.

[kfg]

"For my organization, about 45% of the customer's cost goes to pay for bandwidth. The rest is mostly people costs."

Which rather brings up the question, "What is the origin of the cost of bandwidth?"

Maybe someone should do an Ask Slashdot on that. :-)

KFG

Re:Well...

[Anonymous Coward]

oh yeah? what about ketchup packets?