Best of the ISP-Lists

The Shape of Bandwidth

Members of the ISP-Bandwidth list pore over the many forms and sizes in which bandwidth is bought and sold, including that most elusive of contracts: paying only for what you use.

[February 5, 2002]

On the ISP-Bandwidth list in January, JW asked,

"Are any carriers providing pay-as-you-go bandwidth, charging customers only for what they use?"

JR explained that it's a common offering from a number of providers:

"It's called 'burstable service.' It's either part of a specific contract or a month-to-month arrangement, depending on the provider. There's also a version that's a hybrid: you pay a lower per-meg cost for a specific floor, and the burstable rates kick in over the specified limit. With either kind of burstable service, though, it's more expensive per megabit than tiered or fixed service-sometimes by a lot. If you're not monitoring your usage, you can end up with a seriously rude awakening when you get your bill."

LK suggested that burstable service can be prohibitively expensive to offer:

"It used to be very rare to allow usage-based billing. It was considered risky, due to the cost of the resources required to track it at lower levels. Why give up a port that can be billed at DS3 capacity for one that may only be billed at T1 if it's a slow month? These days, though, it may be possible to justify the exposure, due to the lower prices of gear and bandwidth. Advances in billing software should also play a role. I would imagine it's come a long way."

A number of respondents observed that, under the right circumstances, it can be the perfect solution:

[RB noted] "If you are a VoIP provider, then you have typical telephony traffic patterns: high for part of the day, and close to dead for the rest. Similarly, a corporation will have very little use after business hours. Burstable service is a very logical way of managing bandwidth that should be less expensive to both customer and carrier. The tricky part is that the customer needs to do a thorough analysis of their usage to decide whether or not it's appropriate."

[MG added] "We sell mostly to service providers; how they use it depends on their implementation. For example, enterprises that do virus prevention or online purchasing appreciate the ability to turn up the bandwidth when a new virus attack has been fixed and they need to get the solutions out quickly, or during Christmas when more people are buying presents online. People like that are great candidates."

[MJ agreed] "This serves as another option for customers who can't predict what their traffic will be, but still require the full port worth of bandwidth. Every customer is different, and having options for flat rate, tiered, burstable, or data transfer (where you pay by the amount of GB transferred over a month), give customers the opportunity to find one that fits their needs."

— End