From Morgantown to Tinseltown:
Why Bandwidth Costs Vary From Place to Place

Morgantown, West Virginia is a pretty town—near the Pennsylvania border and not far from western Maryland. The home of the University of West Virginia is beautiful, surrounded by mountains, rivers and remote places where a person can escape the rush of life. It’s also home to some of the highest bandwidth costs in the nation and a lesson in why bandwidth costs vary from place to place.

When Pavlov Media went to build fiber to a property in Morgantown a few years ago, trenching and drilling equipment was needed, just like any other fiber project.

But first, dynamite and experts in explosives were brought in. That’s because the ground is so rocky around the property that shovels strike rock. Trenching doesn’t happen easily. Even something as basic as putting fiber optic cabling into the ground is complicated and expensive.

Then there’s the need to haul data out of Morgantown to the rest of the world.

Morgantown’s isolation and beauty also make it tough to build the networks needed to move data.

Problematic Terrain

There is one phone company in Morgantown and a cable company with limited bandwidth available to sell to ISPs. Therefore, ISPs wanting to provide service in Morgantown are hit with staggering costs for a circuit.

Direct Internet access circuits from the incumbent phone company reflect those costs:

  • 200M DIA: $5,497
  • 500M DIA: $8,128

The same is true in other rural areas. In a rural Georgia town 150 miles from Atlanta, 150Mbps of bandwidth runs at least $6,000 per month. Bumping that up another 50Mbps sends the costs to nearly $7,000 a month.

The differences between cities

But, introduce a larger urban area with few topology challenges and lots of bandwidth providers and prices for DIA (direct Internet access) circuits fall quite a bit.

In a well-served Tennessee city, circuit prices look like this:

  • 250M DIA: $1,899
  • 500M DIA: $2,699

When Google searched for a place to launch fiber optic-based Internet service to homes, it chose north Kansas City, Missouri. No wonder.

North Kansas City has relatively low commodity bandwidth costs because of their existing collocation space near a major Internet point of presence (POP) within the area, which eliminates transport costs and offers ISPs more competitive options for bandwidth. A Gigabit circuit (1,000Mbps) in north Kansas City costs less than 200Mbps of bandwidth in Morgantown, West Virginia.

A Google Earth map shows the challenge. Any company providing backhaul has to build a network through mountains, large stretches of forest and across rivers. Redundancy is twice as tough. The backhaul provider must maintain that network, finding skilled labor in a rural area and fight snow, storms, rock slides, lawsuits from groups opposed to construction of any type and more.

The complexity of moving data

It’s also worth understanding the sometimes complex relationships between companies involved in providing Internet service. Let’s say we have five companies involved in transporting data back and forth between customers:

  • Company A connects to B and D.
  • Company B connects to A and C.
  • Company C connects to B and D.
  • Company D connects to B and C.

In Summary

In more urban areas, there is typically plenty of competition to lower prices. Distances are shorter as well. Hauling data around the New York City market isn’t difficult compared to Morgantown.

Bandwidth costs then are much lower where there is more competition, more people to spread costs and hauling data is physically easier.

This means that supply and demand, topology and distance all impact bandwidth costs. Pricing is clear—the more rural the area and the less competition for bandwidth, the higher prices for ISPs and customers.