I read a recent article about YouTube's mythical bandwidth costs, which to date have been left to speculation. YouTube minimizes it's costs by purchasing 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. It is evident that over time, the top 30 content providers will become increasingly adept at finding ways to minimize bandwidth costs.So what does this all mean? Bottom line: Profit from bandwidth will plummet - competition from content will increase as bandwidth costs decrease. As the room becomes increasingly noisy from content providers, the winners will be those who provide quality content.
