
The Relative Cost of Bandwidth Around the World - FredericJ
http://blog.cloudflare.com/the-relative-cost-of-bandwidth-around-the-world
======
Smerity
For those who don't know the story about the Australian internet industry,
Telstra plays a pivotal and depressingly stupid role.

Telstra was a government monopoly in the past and owned + owns almost all the
copper network in Australia. From 1997, Telstra was progressively privatized
without separating the telecommunications business (phones) with the
telecommunications infrastructure (cables). This was an idiotic idea.

There were some regulations that forced the infrastructure to be offered
wholesale to competitors but they're still the gateway that the majority of
the population get onto the internet. It's also problematic as Telstra are
doing worse and worse at maintaining the copper network that is relied upon.
If you are an ISP using their network, you need to go through their
maintenance fees to improve the line quality for any of your customers. The
cost of wholesaling through the Telstra network is also fairly high.
Regardless, we've got reasonable competition at the ADSL/ADSL2+ level thanks
to this.

Forward to the National Broadband Network (NBN), the government plan to
connect the majority of Australian homes to fiber to the node (FTTP). Telstra
submit the equivalent of a joke tender for the project -- 12 pages connecting
only ~90% of the population when the tender requests 98% -- and then suffer
their biggest one day stock fall in history when it's rejected.

Construction of the NBN rolls on without them, promising to replace the copper
network with a fiber network that will be the new telecommunications
infrastructure used by the majority of ISPs.

However... a new government came to power in Australia. One of their election
falsehoods was that FTTP was too expensive and too slow and instead a
ridiculous hodge podge (sorry: "hybrid") network of failing technologies would
be preferred. Instead of building a complete FTTP network for $73 billion,
they're instead going to spend $41 billion on a hybrid network that will need
to be replaced only five years after completion according to the chairman of
the NBN[1].

This hybrid network relies on the old copper network owned by Telstra. Telstra
have previously stated that it is ready to die and will have billions of
dollars of maintenance issues.

This is also only a very brief discussion of the ridiculousness.

tldr; Telstra played an important role in screwing up the previous generation
of Australia's internet. Telstra is continuing to play an important role in
screwing up the current generation.

[1]: [http://www.zdnet.com/its-time-for-turnbull-to-swallow-his-
nb...](http://www.zdnet.com/its-time-for-turnbull-to-swallow-his-nbn-
pride-7000024263/)

~~~
stephen_g
$73 billion was the LNP's figure, by the way, which involved some extremely
questionable assumptions (such as despite the actual FTTP cost per premises
dropping over time as the rollout was progressing, exactly like it did in
other rollouts around the world, the LNP's strategic review claims it would
have doubled in the future for reasons which were redacted). I think even
Fletcher admitted eventually that it would have been much more like the other
sceneario, $56 billion, in reality. Still a bit more than Labor's $44.1bn
estimates, but nowhere near the LNP's past ludicrous claims (they were saying
up to $96bn).

Still would have been worth it at double the price to get rid of Telstra. I
can't believe how much the politicians have ruined it.

~~~
vacri
Today in the paper[1] there was a feasibility study by an 'independent'
analysis group that said that most homes would only need to use ~14MBit
connections - two HDTV streams plus a couple of vidchats. As a result, the
crappy alternate NBN was more than suitable.

How on earth can you take these people seriously when they can't recognise
that data consumption trends have been rising continuously throughout the life
of the internet. I mean HDTV is only 1080p, and we already have 4k monitors
available to consumers today - which are more than 4 times the data. One
single 4k video feed is already about double everything else they'd budgeted
for in their "somewhat extreme" scenario. Zero forward thinking.

[1]"Such a thing as too much speed"... [http://www.theage.com.au/federal-
politics/political-opinion/...](http://www.theage.com.au/federal-
politics/political-opinion/nbn-cost-benefit-analysis-finds-theres-such-a-
thing-as-too-much-speed-20140826-108jtw.html)

------
Sami_Lehtinen
I think there are a few huge gaps. Russia, they got as many people as Japan.
And another even larger hole is Africa, there's well over one billion people
in Africa. Compared to ridiculous 22 million in Australia, that's a lot more.
And in India, there's even more people than there is in Africa. Roughly US,
Europe and Australia combined got same population as India or Africa which is
in same ball park with China.

~~~
mlvljr
In Russia, 2 Mbit / 512 Kbit ADSL costs me about $8 per month; they keep
suggesting I make a free switch to a 15 (or 30 or 60, have not checked the
actual speeds yet) Mbit cable connection, but I am unsure if I do want to pay
extra $3 :) Given the (free) D-Link 2300 running a 2500 firmware is really
showing its age sometimes now (after 6 or 7 years of non-stop work), it may be
indeed time to switch (not that I need anything more than 5 Mbit downlink, I
think though).

This is a state provider, there are many private ones around, and their prices
(usually for a 50-100 Mbit downlink via usual Ethernet cable) are $10-20 per
month (comparable, that is), if I remember correctly.

The ADSL quality has always been good, btw (esp. given I wired the modem to
telephone cables probably 30-40 years old :) ) -- decent pings, stable speed,
was down only once or twice (in all the years).

~~~
driverdan
I'm curious why you're satisfied with 2 Mbit / 512 Kbit. Do you never use
streaming video / music? Don't you get frustrated waiting for large downloads?

~~~
mlvljr
2 Mbits means 900 Mbytes per hour -- enough for youtube streams in 480p (and
more often than not, in 720p, without pauses to buffer), and ok if software
distributions are downloaded (XUbuntu 14.04 was 900 Mb, iirc); music takes a
fraction of the downstream capability...

Shortly, people used to 30 MBit downlinks might have forgotten how little most
of our (modern-day) media requires -- often a megabit, or two per second :)

~~~
ksec
I am on a 4Mbps ADSL line, I would have liked a little more like 10Mbps. But
Stability and Ping time matters A LOT more for an internet connection.

The only real downside is uploading speed. Which meant i dont to enjoy Google
Drive or DropBox as much.

Hopefully when G.Fast arrive next year, those who are still relying on copper
will get a very decent upgrade.

------
slagfart
Just as a note, Cloudflare is not alone in struggling with this. I'm very
surprised that the status quo has been maintained for so long. I suggest that
Cloudflare should look under the process of transit becoming 'Declared',
within the Australian Trade Practices Act. More here:
[http://en.wikipedia.org/wiki/Competition_and_Consumer_Act_20...](http://en.wikipedia.org/wiki/Competition_and_Consumer_Act_2010#Part_IIIA:_Access_to_Services)

------
mrmondo
Australian here: can confirm Telstra as one of the most 'evil' companies I've
dealt with and it's very clear to those of us in the Australian IT sector that
they're holding us back.

------
thejosh
Holy crap Australia is expensive. Thanks Telstra, this is why Blizzard and
other companies won't come here.

~~~
yotelstra
blizzard is actually peered in sydney ;)

[http://monitor.nsw.ix.asn.au/cacti/graph.php?local_graph_id=...](http://monitor.nsw.ix.asn.au/cacti/graph.php?local_graph_id=455&rra_id=all)

~~~
heywire
Interesting set of graphs available through that site. Is the same type of
information available for US peering?

~~~
kuschku
No, the US exchanges don't provide any public data at all, this is also why
they can't be listed in the Wikipedia Table for "Internet Exchange Nodes by
throughput".

If you can find some data though, I'd encourage you to add the data to the
table :)

------
triggercut
At my place of work our 50:50 Unlimited (not Telstra) is in the low to mid
four figures a month.

For a company with offices worldwide, we have by far the most expensive and
have the worst performing connection to our regional datacenter.

The standard response from any supplier is to blame Telstra.

Recently I was porting some ISDN phone lines from an old provider to a new SIP
provider. Not only did the two need to arrange and agree the porting with each
other, but Telstra needed to work on both of their behalf to facilitate the
port. One number took 3 months.

------
photorized
Is this the thread where everyone is sharing how much they are paying?

All of my companies are bootstrapped (and bandwidth is the largest expense
item), so some of the rates quoted got me excited.

It sounds like there are a lot of knowledgeable folks here (on the buy side),
would you mind sharing some info?

I typically buy between 2..5 Gbps per POP in the US and Europe.

What's the best rate I should be able to get, you think? Tend to buy L3 or
premium blend (no Cogent or HE). Any insights would be appreciated.

------
Swannie
Note that CloudFlare never states that they use Telstra for transit, nor what
the blended cost would be for transit with the other transit providers, so
this is actually, somewhat misrepresenting Australia.

------
santaclaus
No mention of New Zealand. New Zealand is an amazing country, but goddamn,
they have some pricey internet access. Wasn't Kim Dotcom planning to finance a
new pipe to New Zealand at one point?

~~~
jpollock
My experience is that Internet connections are price competitive with the US
(and perhaps cheaper).

You can get 100/50 with 80GB of traffic for NZ$110/month, which is US$91.64.
You can go full unlimited at USD$115. Amazingly, this is the same price as
Comcast Extreme 105 which is only 105/20.

One thing to understand about the NZ market. Since carriers charge per byte, I
was generally able to get full speed out of my links during prime time -
barring TCP RTT throttling.

------
guard-of-terra
"Running undersea cabling is more expensive than running fiber optic cable
across land"

I always imagined that the opposite would be true.

~~~
dyladan
While sharks biting internet cables may be funnier, more often ship anchors
and natural disasters cause cables to break.

~~~
caf
On land there is a seemingly unlimited supply of idiots with backhoes, though.

~~~
Thimothy
Or just one Georgian grandma with a shovel.

[http://www.theguardian.com/world/2011/apr/06/georgian-
woman-...](http://www.theguardian.com/world/2011/apr/06/georgian-woman-cuts-
web-access)

------
kondro
I'm confused. AAPT, Optus, PipeNetworks, etc all offer transit at
significantly lower prices than this for anything I've been quoted with (circa
$20-30/Mbps for 100Mbps+).

Is this just because they're offering blended traffic?

~~~
jacques_chester
50% of the traffic they send in Australia terminates in Telstra-controlled
networks and Telstra don't offer peering.

~~~
kondro
Was talking about transit offered by Australian providers.

------
abdelm
I'm not sure why Africa and the Middle East specifically aren't really
mentioned in that article since the prices would be on par with Australia if
not more, also due to having only 1 or 2 ISPs and no competition.

~~~
squeaky-clean
Because CloudFlare doesn't have any data centers there.

[https://www.cloudflare.com/network-map](https://www.cloudflare.com/network-
map)

------
parisidau
Telstra seems to disagree:
[https://twitter.com/Telstra_news/status/504435708098908160](https://twitter.com/Telstra_news/status/504435708098908160)

~~~
eastdakota
They're correct that at scale the dollar pricing listed is at least 10x too
high in Australia. What they fail to acknowledge is that it's also 10x too
high in every other region described. So the conclusion remains the same,
Australia is 20x more expensive than Europe for no reason other than Telstra's
market power.

------
ajcarpy2005
Would it be feasible to have a global federation that played referee to
negotiations between citizens and ISP's on pricing for Internet access?

------
chatmasta
Good article, but frustrating they picked some arbitrary $10/mbps as their
baseline instead of a more accurate number.

~~~
tarblog
Do you know what a more accurate number would be? I'm curious...

~~~
samcrawford
We pay $1.50 per Mbit with a commit of 200Mbps in NY, LA and Miami. This is
for 'premium' blended transit (e.g. Specifically excludes Cogent and HE)

------
msrpotus
Why is peering so much lower in the US? Is that a business strategy on the
part of ISPs?

~~~
xeroxmalf
From the article: "In North America, while there are Internet exchanges, they
are typically run by for-profit companies." ... "In North America the
combination of relatively cheap transit, and relatively expensive exchanges
lowers the value of joining an exchange. With less networks joining exchanges,
there are fewer opportunities for networks to easily peer."

~~~
theandrewbailey
Let me get this straight: North America has several for-profit companies that
operate continental-wide networks, because building them is cheap, but they
peer with each other less often than in Europe. The situation isn't ideal, but
it makes the internet "backbone" market competitive, so it works out.

Side note: the situation is very different when talking about last mile ISPs
in North America.

~~~
adventured
I always find it interesting that the business network in the US is often
ignored. It's quite stellar on a combination of quality and price. I think
it's an inconvenient data point for people that only like to bash the US
telecommunications situation.

~~~
curiouscats
People tend to complain about problems and ignore things that are fine.

While a desire to avoid pointing out any positive of a situation that drives
them crazy frequently may be part of the reason it isn't mentioned I think it
pales in comparison to just forgetting about whatever isn't a problem.

------
sp332
Wow, North America came out on top of an Internet comparison for once?

~~~
kalleboo
No, Europe had more free peering so had a lower effective cost.

~~~
r00fus
Just spent a few weeks there and I can tell you home broadband is very fast
compared to back home in the US - and apparently my relatives in the EU pay
1/4 as much as me when you add in TV and landline.

------
valarauca1
The TL;DR of the article.

>If Australians wonder why Internet and many other services are more expensive
in their country than anywhere else in the world they need only look to
Telstra (Note: ~50% of all internet is from Telstra in Australia).

>What's interesting is that Telstra maintains their high pricing even if only
delivering traffic inside the country.

>Given that Australia is one large land mass with relatively concentrated
population centers, it's difficult to justify the pricing based on anything
other than Telstra's market power.

>In regions like North America where there is increasing consolidation of
networks, Australia's experience with Telstra provides a cautionary tale.

~~~
idlewords
This seems to be a common failure mode in Australia. Grocery prices follow the
same pattern—food is extraordinarily expensive, which you assume might have to
do with the country's remoteness until you notice that local foods are just as
overpriced. Mangoes grow by the side of the road in Queensland, but sell for
$3.50 at the supermarket.

The root problem is duopoly (in the case of grocery stores) or monopoly
(Telstra).

~~~
pkaye
Is it expensive relative to your income?

~~~
bane
Australia is shockingly expensive the first time you visit there. Normal
economics just don't seem to be at play.

It took me a long time to put my thumb on what Australia is like and it wasn't
until I watched the show "Fringe" and saw the alternate universe (with the
Airships and the Twin Towers) that it finally struck me, it's like an
alternate universe America. Everything is _just_ like the U.S., except for
some weird little details. Big cars, lots of open land, cowboy analogs
(drovers), purpose built capital designed by a foreigner, densely packed East
Coast, East Coast vs. West Coast rivalry. And then suddenly it's not: driving
on the left, everything is overpriced, egg yolks are a different color, etc.

I remember seeing real estate listing for some _really_ remote housing in some
dying gold town somewhere. Like 2 bedroom bungalows with no property. And
they're priced at what you'd expect to find in a nearby suburb of Sydney
(except the housing in the suburbs around Sydney is ludicrously expensive).
While anywhere else in the world people would basically be paying you to take
the title so they could get the hell out of there.

The local markets in Australia are just _weird_.

 _note_ I live in one of the most expensive housing markets in the U.S. so I'm
used to seeing high prices. But even single bedroom apartments in Sydney
suburbs rent out at prices you can get entire houses for in similar geographic
regions around my area. You'd think the exact opposite would be true. In
almost any other part of the world with plentiful land and low population, you
end up with cheap housing, while in Australia that doesn't seem to be true at
all.

~~~
stimut
Australia is generally ridiculously expensive, that is true, but there is
usually a reason (not necessarily a good one) why "local markets in Australia
are just weird."

> I remember seeing real estate listing for some really remote housing in some
> dying gold town somewhere.

Without further details, I can't say whether your assessment of "dying" is
correct or not, but it is true that towns that have mining operations
experience explosive growth (and contractions) in housing prices. Local
governments in general don't want to allow a lot more house building, because
in 5, 10 or 20 years time when the mine closes down, having all those empty
houses causes a ghost town effect where the town really will die (the towns
almost always existed before the mines, and they want them to exist after the
mine leaves too). That means people pay north of $1 million dollars for a
fibro shack. Mining companies will hire the local showgrounds long term, so
that they can build a tent city for their workers (who use the showground
toilet and shower facilities etc). Local house prices will fluctuate by
hundreds of thousands of dollars in days, based upon financial news from the
mining companies about whether they are liking to build/expand/close the local
mining operation.

Yes, it's weird.

As for Sydney specifically, it is actually very space constrained. With the
ocean on one side, and the Blue Mountains on the other side, there actually
isn't a lot of room for expansion.

You are correct that in general there is a lot of undeveloped coast line
though (inland is basically inhospitable). It's just not where the jobs are.

~~~
vacri
_As for Sydney specifically, it is actually very space constrained. With the
ocean on one side, and the Blue Mountains on the other side, there actually
isn 't a lot of room for expansion._

Melbourne has vast swathes of open land in all directions, and housing prices
are nearly the same.

I asked the question to a friend, and he replied that I just don't get it: the
people who already have houses aren't interested in reducing the value of
them. Almost all federal politicians have multiple properties. Why would they
legislate to do that? So we have negative gearing that will never get solved,
lots of foreign purchasing driving up prices, and no-one willing to pull the
pin out of the electoral grenade and start dealing with our housing bubble.

~~~
robryan
While Melbourne doesn't have any shortage of land to build out into it is
getting very far away from the inner city.

As long as you are happy to drive everywhere and can find a suburban job or
are prepared to make long commutes there is plenty of relatively cheap housing
to be had.

------
jessaustin
_In regions like North America where there is increasing consolidation of
networks, Australia 's experience with Telstra provides a cautionary tale._

But, but, the market is _magic_! Regulation is _evil_. Does not compute!?!!

~~~
jacques_chester
Australia didn't start with a free market in telecommunications and the
aftermath of a botched privatisation means that we're left with a distinctly
dysfunctional market as a consequence.

~~~
jessaustin
The USA might have had a free market at one time, but we haven't since 1934,
so memories are hazy. The uptick in competition post-1996, which has steadily
rolled back for some time now, was mostly a gimmick to funnel investment into
the Daughters Bell. TFA is spot-on that concentration is bad for consumers,
and our slow roll-back from even the paltry market diversity we once had for
data connection bodes ill for us.

I heartily apologize to all who were disconcerted by my caricature of the
useful idiots who "believe in a free market in telecommunications", as the
most recent email I received from my corrupt Senator put it.

