Why does fee cost more than free to run? Scott Rafer wrote several days ago that it cost about $30 per day to run a for-fee hot spot, while a free hot spot cost $6 per day. I commented on his remarks, and he responded in the comments section.
In the last week, I've been interviewing hot spot operators for an article I'm working on, and Scott's comments came up a few times. Most of the operators were vaguely dismissive, pointing out that for most venues, even ones they operated, the cost were pretty minimal even when dividing out OSS (back end billing and authentication) across the system.
But it struck me that there's one key difference between most free and fee hot spots: a T-1 one. Many of the fee networks have decided a T-1 line is the basic level of service they want. Speakeasy Networks will sell you a T-1 for about $650 per month with unlimited bandwidth in many parts of the country. Other providers, with different assurances and network configurations, could charge much more. But evn at $650 per month, you've got to recoup $20 per day just to pay bandwidth.
Free hot spots are more likely to employ an inexpensive DSL or cable modem connection that can cost $50 to $100 per month, or more like a few bucks a day to recoup.
Until backhaul drops significantly, we'll probably continue to see that disparity. With low usage rates at hot spots, the big cost may remain high-quality backhaul. DSL has latency and reliability issues, even with good providers; T-1 typically doesn't.
When you said this: "Speakeasy Networks will sell you a T-1 for about $650 per month with unlimited bandwidth in many parts of the country."
I think you really ment to use the word "Utilization" or something like "megabytes per month" because a T1 does have a limited bandwidth of 1.5mbits/sec.
Bandwidth = the size of the pipe, like the diameter.
Utilization = how much you move through the pipe over time.
David
Imp pretty sure ever one knows that a t1 speed is 1.5mbit, the unlimited here was used in the same way as unlimited is at aol or any other internet provider, meaning there is NO limit to how much data you download/upload. there is a limit on the speed of getting that data.
On the topic of DSL vs T1. I use business DSL at my Internet kiosk. Its $200 a month for 7mbit/768k service. The DSL has been very reliable (never has gone down) and have been more than happy with the speeds (800k a sec!!) so in certain situations DSL can make sense. I know that if the DSL did go down, I will not get the same service level if I had a T1 line, they make that clear when you sign up.
but so for DSL is working great for me.