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Subject: Re: UKNM: RE: UKNM Digest V1 #115
From: Nick Sellors
Date: Wed, 16 Dec 1998 14:49:29 GMT

On Tue, 15 Dec 1998 22:54:49 -0000, "Ray Taylor"
<tayloratnmcadplan [dot] com> wrote:

[bandwidth prices]
>What? As opposed to being overpaid to keep prices artificially high?

If you think anyone who works for an ISP (in the UK) is overpaid,
you're dreaming. If anything, salary levels are lower than in other
market sectors. If I told you what my basic salary is and how many
hours I work, you'd probably have me certified.

>Come on. What's a fair price for a UK ISP service? Ans: Take a quoted price,
>halve it, halve it again, and knock off a few thou' for good measure.

Ok, so we've established that you think UK ISPs charge too much for
connectivity. Let me explain why I believe you're wrong and maybe
you'd like to tell me what a "fair price" for a range of services

>bet PSINet UK Ltd charges higher prices than its equivalent operation in the
>US. If I'm wrong, tell me about it.

You're coming at this from the wrong direction. Here, look at this:-

Cost of a T1 (1.544Mb/s) circuit (Bell Atlantic) from central NY to
(one of) our NY PoPs is

Install $250 (156GBP)
Annual ~$4300 (~2700GBP)

Cost of a 1Mb/s circuit (BT) from central London to our Telehouse
PoP is

Install 4615GBP
Annual 8848GBP

So there's a ~6000GBP pa cost differential just for the customer
circuit and for less bandwidth. The costs for the rest of the UK
network are similarly more expensive.

>UK prices are higher because most UK customers are too stupid to know the
>difference. If PSINet UK can get away with it, good luck to you. Make the
>most of it while you can.

You are mistaken.

Things won't change significantly until the same content is
available from UK mirror sites (and people use them) as is available
from US-based sites. For instance, UK companies hosting their
websites that are aimed at the UK market in the US are pushing up UK
ISPs international bandwidth requirements and are actually making
the situation worse.

Look at it this way - an ISP in the US knows that maybe only 5% of
his offnet traffic is going to be outside of the US because that's
where the main traffic sites are, so why does (s)he need to spend
loads of money on expensive transatlantic bandwidth ?

A UK ISP on the other hand, knows that upto 60-70% of his offnet
traffic is going outside of the UK, so (s)he knows that (s)he has to
invest in expensive international bandwidth, hence the costs of
running the business are higher.

Real world example, from A N Other UK ISP:-

Colocate a server in Telehouse with one full rack.

UK-only[1] traffic 20k pa
Unrestricted traffic 50k pa

You gets what you pays for, maybe you've been asking for the wrong


[1] The rest of the world can't even see the server
Nick Sellors http://www.derby.org/
Views expressed are mine and mine alone, not my employers
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  Re: UKNM: RE: UKNM Digest V1 #115, Ray Taylor

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