Comment Re:Tier-1000 providers make claims about Tier-1 (Score 1) 167
I'm sure there's definitely a measure of marketing going on here on the part of the smaller folks. Any chance they have to score some points against Comcast/Tier-1 is an opportunity they'll take. However, I don't think the math supports that as the primary motivator.
Comcast, in it's wireline business has to support both ends: backhaul and last mile. The smaller providers support last mile and pay a tier 1ish provider for the backhaul. Tier 1s are going to charge the small guy for bandwidth whatever their cost is plus a magin, so unless the smaller provider is completely skimping out on their last mile (a distinct possibility for CLECs) there'd be no way for them to undercut the large players by the margins that they are and still be profitable. This is even more clear in the case of MVNOs, who pay Verizon for everything, but still undercut big red by a considerable margin.
The simple answer is that the smaller players are willing to accept a lower profit margin than the large players are. Whether that rises to the level of gouging or not is a different conversation, but when the smaller players tell you that they don't worry about transit (backhaul) costs when they accept thinner margins than tier 1, it's likely the truth. Or they're lying and will be driven out of business by the backhaul costs. Time will tell.