Average Per-Bit Delivery Cost
Encyclopedia
Average Per-Bit Delivery Cost, or APBDC, is one relatively common method by which Internet Service Providers calculate their cost of goods sold
. Basically, it averages the cost of however many bits were actually sent or received across a link with the actual cost of operation of the link. This is contrasted principally with flat-rate and 95th percentile functions, which are typically used for billing 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 effectiveness. 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.
Cost of goods sold
Cost of goods sold refers to the inventory costs of those goods a business has sold during a particular period. Costs are associated with particular goods using one of several formulas, including specific identification, first-in first-out , or average cost...
. Basically, it averages the cost of however many bits were actually sent or received across a link with the actual cost of operation of the link. This is contrasted principally with flat-rate and 95th percentile functions, which are typically used for billing 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 effectiveness. 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.
External links
- Packet Clearing HousePacket Clearing HousePacket Clearing House or PCH is a non-profit research institute formed in 1994. It supports operations and analysis in the areas of Internet traffic exchange, routing economics, and global network development.-Overview:...
: Brief tutorial on the calculation of Average Per-Bit Delivery Costs