Capacity/transit costs vs growth

[faisal at snappytelecom.net (Faisal Imtiaz)]

>>>>But if this happens over a period where there have been improvements in equipment/efficiency, then one would think the increase in costs would be less than 20%.

The above hypothesis why imply that the 20% linear increase is not fair, vs directly making the case that the base rate, set in some point in the past is not fair/appropriate anymore ?  


Faisal Imtiaz
Snappy Internet & Telecom

----- Original Message -----
> From: "Jean-Francois Mezei" <jfmezei_nanog at vaxination.ca>
> To: Nanog at nanog.org
> Sent: Wednesday, May 27, 2015 5:36:23 PM
> Subject: Capacity/transit costs vs growth
> 
> 
> I am looking for some rough estimates of the ratio of capacity
> (equipment) pricing declines versus average increase in end user capacity.
> 
> For instance, say end user average capcity usage increases 50% over 3
> years, would the ISP's costs also increase by 50% ? Or would increased
> efficency of equipment result in a 50% decrease in capacity costs
> yielding roughly the same total cost to the service provider ?
> 
> So I am looking are some sort of ratio of gross costs
> increases/decreases relative to end user usage increase in usage over time.
> 
> 
> 
> 
> Context:
> 
> Wholesale services in Canada are priced linearly and there is a process
> trying to convince the CRTC to review them ASAP.  So if average use
> grows from 1mbps during peak to 1.2mbps, we are looking at 20% increase
> in costs in a linear pricing scheme. But if this happens over a period
> where there have been improvements in equipment/efficiency, then one
> would think the increase in costs would be less than 20%.
> 
> So I am looking for any and all information that can help convince the
> regulator that current linear increase is not right and needs a review.
> 
> any help appreciated.
>