The case against bandwidth caps part II

We’ve heard a lot of bellyaching about high cost of providing bandwidth from the cable guys and the death star lately. For the small number of you that have bought the line that bandwidth caps and surcharges are necessary to pay for the “rising cost of providing service and insure a good user experience”, here’s a news piece for you to contemplate:

According to Telephony Online, Cogent this morning announced that customers who commit to three-year contracts and higher volume service provider customers will now get access to bandwidth at a flat $7 a megabit. Prices go as low as $4, for three-year contract customers who consume a 10 gigabit port. An interesting comment from the report: We have seen Internet traffic growth slow over the past year as measured by a couple of references,” Schaeffer said. “The rate of growth in percentage terms has slowed and that is because of a number of factors. The casual video and social networking sites that drive a lot of traffic are maturing and we have not seen the huge wave of displacement by professional video services that would cannibalize cable and satellite TV. (Broadband Reports)

I’ll let you do the math any way you want to. This is indelible proof that the cost of those precious gigabits they want to ration is pennies, not dollars. The bandwidth caps are just a sneaky way to raise prices. This is proof that the cost of wholesale bandwidth is declining rapidly and that there is no financial strain in providing more bandwidth at current uncapped price levels.