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Monthly Usage Cap: More Money In Their Pockets = Higher Capacity Equipment?

Dom
Grafter
Posts: 277
Registered: 09-03-2010

Monthly Usage Cap: More Money In Their Pockets = Higher Capacity Equipment?

Hi all,
Having been on the forums for a while last night and today, I had a thought about being charged extra if we go over our monthly usage limit.
As I understand it, the monthly limits are in place in order to ensure that everyone receives a reasonable service, and that the top 5% of bandwidth hogs don't slow everyone else's connection down (please correct me if I'm wrong). So on top of our monthly bill, we get charged extra if we go over our limit.
But what I don't understand is how that's justified. I don't want to make a whiny thread about monthly caps or anything, but I do want to know how Plusnet came to the figures that they did (i.e. £5 for 5 extra gigs, etc).
From my understanding, the monthly limits are in place because the general state of the UK infrastructure is such that it just can't handle the load that it would need to if everyone just ploughed through their downloads like there's no tomorrow, and so by introducing a limit (or making people pay extra for a higher limit) you're effectively making sure nobody uses "too much".
So how does paying Plusnet extra cash each month for the extra bandwidth increase the capacity of the lines, or help upgrade the exchanges, or otherwise make the hardware capable of handling the extra load? If I pay £5 extra one month for example, I'm 99% sure that that £5 doesn't go towards laying a new higher-quality line from the exchange to my house, or perhaps go towards the cost of upgrading equipment in the exchange. As Plusnet uses BT equipment, it's safe to say that BT is responsible for maintaining and upgrading most of the hardware, and I don't imagine that allowing 5 gigs of extra data that month would cost Plusnet an extra £5... so how does Plusnet justify asking the customer for £5 more?
It seems to me that Plusnet (well, most ISP's if we're being honest) all use the old "there's not enough bandwidth to allow unlimited broadband" excuse, but miraculously there's always enough bandwidth if someone wants to pay for it, despite none of the extra cash the ISP's receive actually going towards upgrading the phoneline/exchanges/other equipment.
I understand that Plusnet have got their own costs, such as paying BT for the bandwidth that they use (which is just an exercise in formality as Plusnet is owned by BT) but if you can offer a 60Gb allowance for £11.49 p/m on one package, it seems strange that on your Pro package (20Gb for £20 p/m) it costs your customers an extra £1.50 per two gigabytes. The fact that you offer a 60Gb allowance must mean that the hardware is capable of providing it, and so it seems like the real reason for the low monthly caps and high extra charges is just to make money, rather than to "curb excessive usage".
Sorry if I come across as a cynic, but in this day and age where everyone is trying to rip-off everyone else, I can't help but ask the questions!
Smiley Smiley Smiley
6 REPLIES
Community Veteran
Posts: 5,082
Thanks: 442
Fixes: 16
Registered: 10-06-2010

Re: Monthly Usage Cap: More Money In Their Pockets = Higher Capacity Equipment?

I thought all the traffic classification and prioritisation, and speed restrictions for certain activities (p2p, ftp, download sites, download servers etc.) varying at different times of the day was the main thing that ensures everyone receives a reasonable service.
I suppose the £5 for 5GB is just a small part of the terms for their current offerings, which seem to be mainly aiming for low price, and they probably expect most people not to use all or even very much of their quota. The 80GB Premium product was replaced with the cheaper 60GB Extra.
And it wasn't that long ago when Plusnet were offering the Unlimited package.
Community Veteran
Posts: 3,789
Registered: 08-06-2007

Re: Monthly Usage Cap: More Money In Their Pockets = Higher Capacity Equipment?

http://community.plus.net/blog/2008/02/28/how-uk-isps-are-charged-for-broadband-the-cost-of-ipstream... is a good start.
The £5 per 5GB is used to pay for faster connections between Plusnet and the BT 20CN or 21CN network ("The Central" or "The MSIL").  This money is paid to BT, who in turn use it to upgrade the critical infrastructure between the exchanges, and the POP's where Plusnet connect into the BT network  ("The Backhaul").
These two points are the main contention areas in the entire network between you, and the internet.
B.
David_W
Rising Star
Posts: 2,296
Thanks: 30
Registered: 19-07-2007

Re: Monthly Usage Cap: More Money In Their Pockets = Higher Capacity Equipment?

One thing that puzzles me, how come over-night is free?  I know the interactive traffic is nice and quiet that time of day so there is plenty of capacity, but doesn't it still cost PlusNet money per gig downloaded?
Community Veteran
Posts: 3,789
Registered: 08-06-2007

Re: Monthly Usage Cap: More Money In Their Pockets = Higher Capacity Equipment?

No. - see the article.  The figures are out of date, but the principle stands.
Plusnet pay for a set amount of bandwidth, not transfer.
For example, they "rent" a pipe that is 155MBps (for simplicities sake, this refers to one LTS segment on a central).  This will provide them with 155MBps any time of the day or night.
Quote
Then there’s a base rental for the 622Mbps central pipe of £160,000 per year and from there a £166,800 yearly rental for each 155Mbps segment that is active.
So you have yearly charges as follows:
0Mbps of capacity – £160,000
155Mbps of capacity – £326,800
311Mbps of capacity – £493,600
466Mbps of capacity – £660,400
622Mbps of capacity – £827,200

So, as Plusnet have to pay for the "width" of the pipe to sustain daytime transfers, the pipe is still the same "width" overnight, but much less used.
Please, go and read the article.  It clears up many points as to why costs are as they are.
B.
David_W
Rising Star
Posts: 2,296
Thanks: 30
Registered: 19-07-2007

Re: Monthly Usage Cap: More Money In Their Pockets = Higher Capacity Equipment?

Ahh I get it now, I was remembering an old post(?) where PlusNet were charged by BT per gb used rather than a flat rate.
Dom
Grafter
Posts: 277
Registered: 09-03-2010

Re: Monthly Usage Cap: More Money In Their Pockets = Higher Capacity Equipment?

Thanks for the answers!
Yeah I thought PN might have been charged per Gb transferred (perhaps on top of the monthly rental fee for the bandwidth).
I'll read the article you've linked to as well, as it seems quite in-depth.
Smiley Smiley