A piece in the Globe and Mail, “What is a fair price for Internet service?” by Hugh Thompson, revealed a truly interesting tidbit that Northwestel has been somewhat resistant to discuss: how much it costs to transmit 1 GB of data.
Here’s the relevant paragraph on this question from Thompson’s article:
To find out what is a fair price, I contacted several industry insiders. They informed me that approximately four years ago, the cost for a certain large Telco to transmit one gigabyte of data was around 12 cents. That’s after all of its operational and fixed costs were accounted for. Thanks to improved technology and more powerful machines, that number dropped to around 6 cents two years ago and is about 3 cents per gigabyte today.
3¢ per GB? That’s a chilling number, when you consider that Northwestel resells it to internet customers for $10. In a nutshell, that means that Northwestel marks up the cost of the data that it doesn’t even provide, but merely transmits, at a rate of 33,233%.