antipaucity

Why are colocation bandwidth rates so crazy expensive? In an era of ubiquitous broadband to the home, why are connections in datacenters still so expensive?

I see charges on the per-GB-transferred scale, or flat-rate charges per MB of bandwidth. I have yet to figure out why these rates can vary so wildly even in datacenters in the same geographical region. It’s not like it costs Sprint or Level3 [noticeably] any more to use the fiber they’ve already laid to have more systems utilizing it. Yet costs go up every year, even though available speeds haven’t shown major improvements in the last few years.

So I ask, what causes these charges?