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**[ NNSquad ] Re: User sues AT&T after $5000+ bill for exceeding 5 GB, bandwidth cap (Brett Glass)**

*To*: nnsquad@nnsquad.org
*Subject*: [ NNSquad ] Re: User sues AT&T after $5000+ bill for exceeding 5 GB, bandwidth cap (Brett Glass)
*From*: "David P. Reed" <dpreed@reed.com>
*Date*: Wed, 04 Mar 2009 12:31:32 -0500

`Let me understand the calculation Brett is making. If AT&T pays $3M for
5MHz of spectrum for its cellular data, one would have to determine how
many bits can be transmitted per second. Let's assume HSPA+ which is
what ATT is deploying. That gets 42 Mb/sec down or 22 Mb/sec up in a
good case, which is what will happen when it deploys enough cells to
provide good coverage. (not counting cost of equipment here: Brett said
*cost of spectrum*).`

`Let's assume the license is for one year. So, 30 megaseconds in a year
gives $0.10 per second as the rate ATT pays for a second, FOR A WHOLE
LICENSED REGION (say NYC). `

`So let's assume ATT has a few (2) thousand cell site sectors in that
region (sectors are directional swaths from a cell site, and they can
build more). Then the cost of spectrum per cell site sector would be
$0.00005/sec. So assuming the user gets 42 Mb/sec, we get a cost for 1
GByte to be 0.00005 /42,000,00 * 8,000,000,000 or $0.10. Yup, that's
right: a Gigabyte should cost about 10 pennies of spectrum in NYC. So
50 G per month costs ATT about $5.00 worth of spectrum.`

`In theory, if traffic got heavier, ATT could deploy more sites, further
cutting the cost of spectrum per user, because they can service the same
user with more spectrum. `

`The real point here is that Brett's response was too glib by half. Not
what one would expect from a businessperson or engineer doing their
math. Of course there are lots of other costs that ATT incurs. But it
is JUST WRONG to say that ATT, who touts the best and most efficient
bits/Hz wireless data network on the planet, pays more for spectrum than
the user spends.`