Where on earth are the prices not going up? I used to get cable internet for $40/mo and now it's more like $60/mo.
I had to buy the DOCSIS 3 modem for my house, so they're not paying for that. I suspect that they had to buy new modems on their end, but my modem was only about $100 so I can't imagine that theirs was more than $100 especially if they're buying millions of them.
They haven't upgraded the coax that runs to my house, or the pulls that run along the telephone poles. Those are all the same. So it's an equipment upgrade? $100 once so that they can charge $20/mo more forever? They made their money back on the last mile well inside of a year.
And they haven't had to put more fiber into the ground either. Fiber transceiver keep getting faster and cheaper every year. As slower ones break you can replace them with faster ones for less money. Even if you upgrade early, it's not as though it's hugely expensive.
I pay for 50/5 but I suspect that Comcast only allocates 5/0.5 or so for me, since it can't manage to keep up with Netflix all that well. So that means that Comcast can do the last mile for $100 or less of new investment and the last 25 miles for $4 (2000 people per pair, $8k per pair) of incremental investment. This is not a lot of money relative to the $60/mo that I pay.
> Is it valid to look at this as paying for that, and if CDNs can't pay, then end user prices will have to go up?
So first I disagree that the CDN should have to pay anything, again since I'm paying Comcast to connect me to the CDN!!
But even if I admit your point (which again, I emphatically DO NOT!) the amount of money to make an upgrade happen is TRIVIAL relative to yearly revenues. $104 in one-time hardware versus $720 in yearly, recurring revenue.
I had to buy the DOCSIS 3 modem for my house, so they're not paying for that. I suspect that they had to buy new modems on their end, but my modem was only about $100 so I can't imagine that theirs was more than $100 especially if they're buying millions of them.
They haven't upgraded the coax that runs to my house, or the pulls that run along the telephone poles. Those are all the same. So it's an equipment upgrade? $100 once so that they can charge $20/mo more forever? They made their money back on the last mile well inside of a year.
And they haven't had to put more fiber into the ground either. Fiber transceiver keep getting faster and cheaper every year. As slower ones break you can replace them with faster ones for less money. Even if you upgrade early, it's not as though it's hugely expensive.
Here's a 10gig, 10km transceiver for $400: http://www.newegg.com/Product/Product.aspx?Item=N82E16816523...
And here's a 10gig, 40km transceiver for $4k: http://www.newegg.com/Product/Product.aspx?Item=N82E16816401...
I pay for 50/5 but I suspect that Comcast only allocates 5/0.5 or so for me, since it can't manage to keep up with Netflix all that well. So that means that Comcast can do the last mile for $100 or less of new investment and the last 25 miles for $4 (2000 people per pair, $8k per pair) of incremental investment. This is not a lot of money relative to the $60/mo that I pay.
> Is it valid to look at this as paying for that, and if CDNs can't pay, then end user prices will have to go up?
So first I disagree that the CDN should have to pay anything, again since I'm paying Comcast to connect me to the CDN!!
But even if I admit your point (which again, I emphatically DO NOT!) the amount of money to make an upgrade happen is TRIVIAL relative to yearly revenues. $104 in one-time hardware versus $720 in yearly, recurring revenue.