[lug] Cogent pricing...

[jb at forethought.net]

>So they can only bring in $2.4M/month (80 x 30) before the pipe                 
>overflows.  I suspect an OC192 to Sacramento is going to cost say               
>$500K/month.  Costs don't align with revenues.  Something is fishy.             
>Luckily, Cogent is public, and a quick visit to the SEC yields:

Cogent basically owns the fiber. So their operational costs on an OC-192
are very, very, very low. Probably a few thousand, not counting engineers 
to keep it going.

Their model does assume that the typical business user of a $1000/mo 
circuit won't use anything like that much bandwidth, but that's no 
different from any other backbone operator.

That's why they charge more for their "wholesale" circuits, where they 
know they'll have higher utilization.

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