In our last post we discussed the costs of bandwidth in Canada, and why it is higher than other countries.
Bandwidth usage is very comparable to electricity, or natural gas. Electricity and gas spins a meter. Hydro has a basic service charge, and then a usage charge, for both electricity and gas.
While electricity doesn’t “wear out” a power line, there is considerable costs for maintenance and very high cost for upgrading – compounded by the costs of regulations and safety which is very important.
In the Internet world, we work on a similar concept. However, bandwidth usage is exponentially increasing with streaming services and people “cutting the cord” and dropping their satellite TV. This creates significantly higher costs for upgrading which is planning, designing, purchasing equipment, the labor to perform the upgrades, and ongoing support. Much of these costs are also in US dollars as we purchase direct from distributors and manufacturers.
Back in 1935 there may have been a couple lights and a 40 amp panel in a house. Today, that standard is 200 amp or even 400 amp.
It’s a similar comparison for bandwidth. As little as 15 years ago it was only 2-3 Gigabytes per month, today, we see customers using 200 Gigabytes and many customers are now in the “One Terabyte” membership group on our fiber network. That is a 30,000% increase in usage over the past decade – and the costs only doubled thanks in large part to new technologies being deployed, and extensive planning and strategies to meet the bandwidth demands for the next 2 years.
This is why we are continuously upgrading to meet the demands of the new applications such as online gaming, telecommuting and VoIP services.