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# Why proxy bandwidth costs what it costs, and why that number is wrong
- URL: https://98-95-177-14.sslip.io/journal/utilization/
- Published: 2026-06-16T09:00:00.000Z
- Updated: 2026-09-27T22:31:12.000Z
- Description: The unit price of a gigabyte is almost entirely a function of how full the pipe already is. Here is the arithmetic, with the numbers we actually run.
- Author: Arthur Embry
- Tags: Market structure

## Fixed costs, variable billing

A residential network buys three things: peering, hardware and compliance. All three are committed in advance, none of them scale with the gigabyte, and together they account for most of what a provider spends in a year. The marginal cost of moving one more gigabyte over a pipe you have already paid for rounds to nothing.

That leaves utilization as the only real lever on price. A route running at 12% of capacity has to recover its fixed cost across a twelfth of the traffic, so each gigabyte carries eight times the overhead. The provider does not describe it that way on the pricing page. They describe it as a premium residential rate.

> You are not paying for your traffic. You are paying for the silence on either side of it.

## What aggregation changes

A single buyer cannot fill a route. Their demand is bursty, concentrated in a handful of geographies, and idle overnight. Dozens of buyers with uncorrelated patterns can fill it between them, provided somebody is willing to schedule the traffic rather than simply sell access and hope.

That scheduling is the entire product. We aggregate buy-side demand across dozens of platforms, sort it by tolerance for latency and jitter, and place the tolerant work into the intervals the impatient work leaves empty. Utilization goes up, the fixed cost spreads thinner, and the list price follows it down.

## The number

At the utilization we run today, a marginal gigabyte costs us a small fraction of a cent to move. We list at seven cents because the difference funds the scheduler, the auditing and the arbitration, and because a price that looks impossible does not get bought. As utilization improves, the list price will keep falling.