YouTube’s Bandwidth Bill Is Zero. Welcome to the New Net2009-10-19 10:14 by PhilipTags: YouTube
YouTube may pay less to be online than you do, a new report on internet connectivity suggests, calling into question a recent analysis arguing Google’s popular video service is bleeding money and demonstrating how the internet has continued to morph to fit user’s behavior. In fact, with YouTube’s help, Google is now responsible for at least 6 percent of the internet’s traffic, and likely more — and may not be paying an ISP at all to serve up all that content and attached ads. Credit Suisse made headlines this summer when it estimated that YouTube was binging on bandwidth, losing Google a half a billion dollars in 2009 as it streams 75 billion videos. But a new report from Arbor Networks suggests that Google’s traffic is approaching 10 percent of the net’s traffic, and that it’s got so much fiber optic cable, it is simply trading traffic, with no payment involved, with the net’s largest ISPs. "I think Google’s transit costs are close to zero," said Craig Labovitz, the chief scientist for Arbor Networks and a longtime internet researcher. Arbor Networks, which sells network monitoring equipment used by about 70 percent of the net’s ISPs, likely knows more about the net’s ebbs and flows than anyone outside of the National Security Agency. And the extraordinary fact that a website serving nearly 100 billion videos a year has no bandwidth bill means the net isn’t the network it used to be. But the lack of a monthly bill in the mailbox doesn’t mean Google’s internet connection is free — it’s just that it has purchased unused fiber optic cable known as "dark fiber" — and uses it to carry its traffic to other networks where it "peers" or trades traffic with other ISPs. Its costs for bandwidth are then amortized across the life of its fiber and routers. YouTube has been mum on its actual costs, for competitive reasons, but did say in blog post in July that it has homegrown infrastructure and that traditional pricing models don’t apply. Read the full Wired story -here-
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