[8307] in Commercialization & Privatization of the Internet
Re: Net Access/Service Providers
daemon@ATHENA.MIT.EDU (James D. Bruce)
Sat Nov 13 11:34:06 1993
Date: Sat, 13 Nov 93 12:34:01 EDT
From: jdb@MIT.EDU (James D. Bruce)
To: Miles R Fidelman <fidelman@civicnet.org>
Cc: Ed Tully <tully@cscns.com>, com-priv@psi.com
At the risk of confusing the numbers further
> On Fri, 12 Nov 1993, Ed Tully wrote:
>
> > Miles F. wrote
> >
> > >
> > > just as a benchmark: it costs MIT about $100k per year for their
> > > connection into the Internet through NEARnet
MIT's fee to NEARnet is considerably less, around $45,000 per year.
This is NEARnet's standard fee for its 10MB/sec Ethernet over microwave
service.
> > > (I believe they have
> > > two 10mb microwave links) -- at 10,000 desktops on the campus
> > > network, that comes out to 83 cents/per desktop/month! -- MIT
> > > charges internal users a $300 one-time connection fee to the
> > > campus net, and $20/month thereafter
At MIT there are several fee plans. The one Miles is actually referring
to costs $25.00 per month.
> > > -- so, the cost of campus
> > > networking is $19.17/month, or just about the cost of a
> > > residential phone line or a basic capble tv service (note: the
> > > average bit rate available to a desktop it pretty low when you
> > > divide it out, but the peak rate is 10mb, which is what really
> > >counts)
> >
> > I missed someting here. Can you tell me where the $19.17 comes from?
> > >
>
> $20/month internal charge for a campus network connection -
> $0.83/month for 1/10,000 of MIT's NEARnet costs leaves $19.17 ----
> which presumably goes for campus wiring, central servers, support
> staff, etc.
The correct number here for this very incomplete analysis is $24.17.
> > > there's a big gap between $20/month and $290/mo. and between
> > > $290/mo. and $1000/mo.
> > >
> > > since I don't think it costs that much more to provide
> > > metropolitan area service over campus area service, there's a lot
> > > of money from smaller sites being split right now between local
> > > telcos and Internet providors
Real experience shows that the cost of supporting individual users at
geographically dispersed locations is significantly greater (at least an
order of magnitude) on a per user basis than supporting the same number
of users at one location.
> > The difference is the campus is a captive audience and marketing
> > costs are minimum. And there are a large number of users within a
> > short period of time. and they don't have to borrow money to get
> > going. And they get "free" support from students on campus.
The last time I checked I paid the students who support the MIT network.
>
> captive audience, agreed, but 10,000 users x $19/month is over $2 mil.
> a year - pays for a lot of staff and central equipment -- and
> universities have costs of capital just like anyone else
Because of the different fee plans available, the actual income is less
than half this amount.
......................................................................
James D. Bruce
Vice President for Information Systems
MIT
Cambridge, MA
