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Average Per-Bit Delivery Cost, or APBDC, is the
Average Per-Bit Delivery Cost divides the cost of however many bits were actually modulated across a network or component of a network over a period of time by the total operational and amortized capital expenses associated with the network or component over the same time-period, to produce an average cost for the delivery of each transmitted bit of data. This is contrasted principally with flat-rate and 95th percentile functions, which are typically used for billing customers rather than cost accounting. In typical use, APBDCs of individual links or components of an operating network are compared with the APBDC of the whole, in order to evaluate the efficiency of the components and to track improvements in efficiency.
High APBDC may reflect either a high cost or a low utilization, either of which is detrimental to the price/performance of the network as a whole, and indicates an area that needs attention and improvement. Besides reduction in costs of existing network components, use of already-amortized or less expensive components, and transmission of greater volumes of traffic, fundamental or "revolutionary" changes to the topology of a network, such as the substitution of peering-derived bandwidth for purchased transit, often have substantial impacts on a network's APBDC.
The use of Internet Exchange Points (IXes or IXPs) to disintermediate ISP networks from sources of Internet bandwidth is a typical mechanism by which ISPs reduce their APBDC. Properly-sourced, bandwidth procured directly from its point of production in an IXP has a lower APBDC than bandwidth procured indirectly through an intermediary
cost accounting
Cost accounting is defined by the Institute of Management Accountants as "a systematic set of procedures for recording and reporting measurements of the cost of manufacturing goods and performing services in the aggregate and in detail. It includ ...
method by which Internet Service Providers
An Internet service provider (ISP) is an organization that provides a myriad of services related to accessing, using, managing, or participating in the Internet. ISPs can be organized in various forms, such as commercial, community-owned, non ...
(ISPs) calculate their cost of goods sold
Cost of goods sold (COGS) (also cost of products sold (COPS), or cost of sales) is the carrying value of goods sold during a particular period.
Costs are associated with particular goods using one of the several formulas, including specific iden ...
.
Concept
Average Per-Bit Delivery Cost divides the cost of however many bits were actually modulated across a network or component of a network over a period of time by the total operational and amortized capital expenses associated with the network or component over the same time-period, to produce an average cost for the delivery of each transmitted bit of data. This is contrasted principally with flat-rate and 95th percentile functions, which are typically used for billing customers rather than cost accounting. In typical use, APBDCs of individual links or components of an operating network are compared with the APBDC of the whole, in order to evaluate the efficiency of the components and to track improvements in efficiency.
High APBDC may reflect either a high cost or a low utilization, either of which is detrimental to the price/performance of the network as a whole, and indicates an area that needs attention and improvement. Besides reduction in costs of existing network components, use of already-amortized or less expensive components, and transmission of greater volumes of traffic, fundamental or "revolutionary" changes to the topology of a network, such as the substitution of peering-derived bandwidth for purchased transit, often have substantial impacts on a network's APBDC.
The use of Internet Exchange Points (IXes or IXPs) to disintermediate ISP networks from sources of Internet bandwidth is a typical mechanism by which ISPs reduce their APBDC. Properly-sourced, bandwidth procured directly from its point of production in an IXP has a lower APBDC than bandwidth procured indirectly through an intermediary transit
Transit may refer to:
Arts and entertainment Film
* ''Transit'' (1980 film), a 1980 Israeli film
* ''Transit'' (1986 film), a Canadian short film
* ''Transit'' (2005 film), a film produced by MTV and Staying-Alive about four people in countrie ...
provider.
Average Per-Bit Delivery Cost was first described under that name by Bill Woodcock in 2004, but built upon his previous work on Internet cost calculation, some of which was in collaboration with Andrew Odlyzko in the 1990s and with Zhi-Li Zhang and others in the early 2000s.
References
{{DEFAULTSORT:Average Per-Bit Delivery Cost Telecommunications economics Management accounting Data transmission