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  1. #1
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    Reasonable x-connect fee with HE.net? Home DC.

    Wondering what is reasonable or what I should expect?

    I am considering getting a point to point link from my home to One Wilshire via Sothern California Edison Carrier Solutions and getting transit via Hurricane Electric. Trying to gauge what I should expect as a cross-connection fee would be reasonable for a 100m circuit and/or for a 1g circuit.

    I am that guy who is known for using 70 TB on FIOS and I won't go into details but I am coming into a lot of income this year and while I could afford paying 2k/month for internet I it wouldn't be worth it and I think I would rather use that money to fund a Nissan GT-R.

    Now that I will be hitting the highest tax bracket this year I am actually considering starting a very small business in order to write off an expensive internet connection and deduct it (as well as other things) from my taxes.

    I figure doing I can get the benefit of super fast internet (I was paying vz $450/month for internet) and use the tax-deductions to make its cost worth-wile for me. What do you guys think and what would I be looking at for cross-connection?


    And yes I know better I would not do any serious hosting out of my home. This connection would probably be more for personal use than business but I would like to utilize it via a business for tax reasons.

  2. #2
    While I have trouble taking your post seriously (do you really think the IRS won't find you?), are you asking for what charge he.net will charge you for the port or what the cross connect itself will cost? Cross connects themselves are usually not based on port sizing except that 100M you might be able to do as copper and 1G will likely be fiber. Expect to pay around $300/mo for the fiber cross connect. Maybe $700/mo to HE for an unmetered 1G port?

  3. #3
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    Quote Originally Posted by Xeon852 View Post
    While I have trouble taking your post seriously (do you really think the IRS won't find you?), are you asking for what charge he.net will charge you for the port or what the cross connect itself will cost? Cross connects themselves are usually not based on port sizing except that 100M you might be able to do as copper and 1G will likely be fiber. Expect to pay around $300/mo for the fiber cross connect. Maybe $700/mo to HE for an unmetered 1G port?
    Basically I already know around what their transit costs. I would be paying SCE for a connection from my home to one-wilshire and the issue is the fee going from SCE -> HE.net in the one-wilshire building. I figured there could be a cost difference between 100m and 1000g also due to the hardware needed/port type as well or maybe thats just more with 1g -> 10g.

    Technically according to VZ nothing I was doing (even if its for non-profit as i host many mirrors and stuff too) was personal and was all considered to be 'business'

    I really need to talk to someone who knows the laws about taxes and stuff. I didn't think it was illegal to deduct from a business expense if the business is operating at a loss. I was trying to think of a legitimate way to get more use out of money that would otherwise just be going to the government. I know lots of businesses do stuff like this all the time where they barely pay any taxes.

  4. #4
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    It's not illegal to operate a business at a loss. Don't listen to the guy above, you didn't say anything about trying to not pay your taxes. Just get a tax accountant and get your expenses in order for deductions.

    Cross-connect will be around $300 MRC and NRC.
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  5. #5
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    Quote Originally Posted by CGotzmann View Post
    It's not illegal to operate a business at a loss. Don't listen to the guy above, you didn't say anything about trying to not pay your taxes. Just get a tax accountant and get your expenses in order for deductions.

    Cross-connect will be around $300 MRC and NRC.
    Yeah I didn't think it was illegal. So CGotzmann what do you think of my idea? I actually provide a lot of businessy services including lots of game VPNs for people I just do it for free ATM. I would seriously consider starting a hosting business on the side and maybe evn an ISP for my neighbors and if I can deduct it of my taxes and possibly enjoy a 1000m connection to my home... why not?

    Honestly I don't think there any other business/expenses I could do that could at all effectively be used as deductions. I might actually start out of my home and eventually grow it and move it in a data center if it ever started getting serious. I actually have colo machines and used to have a full rack With 10 years linux sysadmin experience and php/python programming I actually have the skillset to complete start a web-hosting company by myself.

  6. #6
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    Yes, you can pass through expenses and revenue to your personal tax liability with some forms of corporations (LLC, S-Corp I think).

    If I was your neighbor, I would definitely want a gigabit port to your gigabit XC to an LA DC. So if you can charge a few neighbors and become their ISP, plus do your hosting of VPN and whatever else from home and offset your cost of getting the service (or at least to where you feel comfortable paying the difference from your pocket) -- why not.
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  7. #7
    May I ask what you do for a living? =)

  8. #8
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    Quote Originally Posted by CGotzmann View Post
    Yes, you can pass through expenses and revenue to your personal tax liability with some forms of corporations (LLC, S-Corp I think).

    If I was your neighbor, I would definitely want a gigabit port to your gigabit XC to an LA DC. So if you can charge a few neighbors and become their ISP, plus do your hosting of VPN and whatever else from home and offset your cost of getting the service (or at least to where you feel comfortable paying the difference from your pocket) -- why not.
    This was kind of my thought as well. Start an ISP and sell to some near neighbors. Maybe consider buying some real wifi-quipment and get the right license and serve the few blocks in my area or something. Lots of possibilities.

    Quote Originally Posted by EtherVM View Post
    May I ask what you do for a living? =)
    I am basically devops. I am part sysadmin: I single-handedly manage the entire network and all aspects of about 14 racks of servers/vpms (I used to work on a team of 20+ admins for 200+ racks of servers).

    I also do programming for automation of things (chef, creating cloud-init images for all the major linux distro's under the sun) as well as maintain the python/libvirt based utility for deploying said vms. I work for an Open Source company behind the development/support of a distributed/clustered file-system. If you can't figure out it from that the company i work for just got acquired (officially) today and thus why my income will be a bit crazy this year.

    I am mid-level network-administrator. I am pretty familiar with cisco and can single-handedly manage mid-sized networks. I actually have a lot of experience dealing with issues of large networks like 10+ gig ddos's from china to. Also tons of experience with VPNs and bonding (over VPN). Kind of a jack of all trades. I have actually worked with 10 gig a lot and with force10, and hp procure switches outside of cisco)

    I am most proficient as a linux-sysadmin but honestly I have never met another linux-sysadmin that has as much of a networking background as I do (not to say I know more than most network admins) but usually its one or the other in this field.

  9. #9
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    Quote Originally Posted by houkouonchi View Post
    If you can't figure out it from that the company i work for just got acquired (officially) today and thus why my income will be a bit crazy this year.
    If I remember correctly you are on the ceph/Inktank project?

    http://www.pcworld.com/article/21498...r-inktank.html
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  10. #10
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    It seems the posters above missed the thread title about connecting your HOME. Build out costs are highly variable.

    Also if you do 70TB on FiOS you don't want to DOWNGRADE to 100mbit HE.net. To achieve 70TB in one direction in a month you need higher than a 100mbit port. For example, 100TB transferred in a month is approx equivalent to ~330mbit/second constant usage. Assuming your data transfer needs peak at different times, you probably want a gigabit port.

  11. #11
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    Quote Originally Posted by Steven View Post
    If I remember correctly you are on the ceph/Inktank project?

    http://www.pcworld.com/article/21498...r-inktank.html
    Bingo! You are correct!

  12. #12
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    Quote Originally Posted by gordonrp View Post
    It seems the posters above missed the thread title about connecting your HOME. Build out costs are highly variable.

    Also if you do 70TB on FiOS you don't want to DOWNGRADE to 100mbit HE.net. To achieve 70TB in one direction in a month you need higher than a 100mbit port. For example, 100TB transferred in a month is approx equivalent to ~330mbit/second constant usage. Assuming your data transfer needs peak at different times, you probably want a gigabit port.
    I am 0.5 miles away from a Socal edison fiber drop and already have some quotes for my point to point link to one-wilshire so that was kind of a moot issue. Going that route is actually a lot cheaper than Metro ethernet with verizon even at 50 megabits...

    And I don't use that much traffic anymore at home as i have migrated a lot of stuff to the DataCenter now. A 100 megabit link would suffice but honestly I would want a 1 gig link for future expandability.

  13. #13
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    Quote Originally Posted by gordonrp View Post
    It seems the posters above missed the thread title about connecting your HOME. Build out costs are highly variable.

    Also if you do 70TB on FiOS you don't want to DOWNGRADE to 100mbit HE.net. To achieve 70TB in one direction in a month you need higher than a 100mbit port. For example, 100TB transferred in a month is approx equivalent to ~330mbit/second constant usage. Assuming your data transfer needs peak at different times, you probably want a gigabit port.
    Edison and LADWP run their own fiber networks and sometimes can give you good pricing on leased fiber or capacity. They all terminate back to various buildings in downtown LA that datacenters are in. It's actually not that hard in metro LA to get fiber if you are near one of the paths of the electric/propane companies, or just near a major fiber path period.
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  14. #14
    For tax purposes running a business at a loss does not offset wage income, it can only offset other business income. So there's no benefit to classifying these as business expenses unless you can classify your income as business income instead of wages.
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  15. #15
    Quote Originally Posted by CGotzmann View Post
    It's not illegal to operate a business at a loss. Don't listen to the guy above, you didn't say anything about trying to not pay your taxes. Just get a tax accountant and get your expenses in order for deductions.

    Cross-connect will be around $300 MRC and NRC.
    OP said this: "This connection would probably be more for personal use than business but I would like to utilize it via a business for tax reasons."

    It is illegal to deduct thing as business expenses that are really for personal use.

  16. #16
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    Quote Originally Posted by Xeon852 View Post
    OP said this: "This connection would probably be more for personal use than business but I would like to utilize it via a business for tax reasons."

    It is illegal to deduct thing as business expenses that are really for personal use.
    Maybe the IRS will do a PCAP and analyze the exact percentage.

  17. #17
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    Quote Originally Posted by houkouonchi View Post
    I am most proficient as a linux-sysadmin but honestly I have never met another linux-sysadmin that has as much of a networking background as I do (not to say I know more than most network admins) but usually its one or the other in this field.
    Off topic, but I find usually the best network engineers have sysadmin background. Coincidentally, I started as a sysadmin before moving into the neteng field. Helps a lot when it comes to understanding applications, proper design, troubleshooting, etc.

    Either way, congrats on the acquisition! Hope you guys were extremely small and you had a $*&# ton of options .

  18. #18
    Quote Originally Posted by houkouonchi View Post
    Bingo! You are correct!

    Congrats! Wish you the best!

  19. #19
    Quote Originally Posted by funkywizard View Post
    For tax purposes running a business at a loss does not offset wage income, it can only offset other business income. So there's no benefit to classifying these as business expenses unless you can classify your income as business income instead of wages.
    Not to mention after enough of a sustained loss, the IRS will formally view your business as a hobby, and thus you will surely be unable to offset your personal income by any "business expense". The common flow-through entities that do offset personal income (e.g. S-Corp) typically require that you show income flowing through the entity, as well as wages being paid out. Operating an S-corp with no recorded officer wages will provoke an audit more than likely. IRS changed their tune awhile back making that, alone, a necessary characteristic to operating an S-corp. My guess is to prevent people like OP writing off personal expenses against their separate personal income.

    As to becoming an ISP (servicing your neighbors), at that point you better act as a business because you will be taking on liability. Being single-homed to HE is probably not the brightest idea. You will need an ASN and have at least 2 transit providers.
    Last edited by Blc4; 05-01-2014 at 02:16 PM.

  20. #20
    Quote Originally Posted by Blc4 View Post
    As to becoming an ISP (servicing your neighbors), at that point you better act as a business because you will be taking on liability. Being single-homed to HE is probably not the brightest idea. You will need an ASN and have at least 2 transit providers.
    Upstream redundancy is the least of your worries if you plan to be an ISP. When I was looking into becoming a WISP several years ago, one requirement stood out among the others, was the requirement that you provide very specific access to law enforcement to your network. See: http://www.wispa.org/calea/WCS

    I don't know how things have changed, but at the time you needed to be able to pinpoint traffic to / from a particular subscriber (which would exclude some of the mesh network equipment I was looking at at the time), and provide law enforcement access to this data over a proprietary (and expensive) port designated for that usage. Maybe the technology has improved somewhat in terms of getting the cost of compliance down, but either way the requirements are still there and it's not entirely straightforward to be compliant.
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  21. #21
    Good point. I guess I view these things as a baseline for anyone entering the industry (as you should have some form of subscriber isolation), but it might be easy to overlook if you have no knowledge of it.

  22. #22
    Quote Originally Posted by Blc4 View Post
    Good point. I guess I view these things as a baseline for anyone entering the industry (as you should have some form of subscriber isolation), but it might be easy to overlook if you have no knowledge of it.
    There was some equipment put out by meraki a few years back (they've since changed their business model), which would do natting and meshing on wireless nodes. By the time the traffic reached your internet connection there was no way to tell whose traffic was whose due to natting being performed by upstream wireless devices. The devices themselves didn't support any kind of intercept functionality either. In that kind of situation, you couldn't have been able to abide the law while offering internet services over the devices, unless you required everyone pppoe or vpn their connection back to a central location to tunnel the traffic to a place you can intercept. Might seem like a minor thing for residential gear, but at the time meraki was marketing this equipment for use by cheap WISPs. The platform had a number of serious reliability and performance problems (read: it barely worked), as well as the fact that management of the wireless portion and ensuring quality was basically impossible. At least it was cheap.... until they tripled the price.

    But I digress. The point is that starting an ISP is not something I'd suggest someone do as a hobby or a tax write off. And in any case, any kind of business can only write off expenses to the extent that it has income. You can't claim a loss on your business and use that loss to offset non-business income.
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  23. #23
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    Well I would be giving each customer an IP address and at the level I would be doing this I would easily be able to monitor any traffic from any of my subscribers fairly easily. Actually the technical side of things is really no problem but its more the non-technical issues.

    Also the odds that I would actually have to deal with law-inforcement as an ISP where I would not expect to ever have more than 100 or 200 customers (maximum ever) i think are low. I was just thinking of being in both hosting and ISP (using the connection for bost) would be an option to have access to more options for revenue to help offset the connection.

  24. #24
    Quote Originally Posted by houkouonchi View Post
    Well I would be giving each customer an IP address and at the level I would be doing this I would easily be able to monitor any traffic from any of my subscribers fairly easily. Actually the technical side of things is really no problem but its more the non-technical issues.

    Also the odds that I would actually have to deal with law-inforcement as an ISP where I would not expect to ever have more than 100 or 200 customers (maximum ever) i think are low. I was just thinking of being in both hosting and ISP (using the connection for bost) would be an option to have access to more options for revenue to help offset the connection.
    And what happens when a customer does commit a crime? 1 out of 200 is still some form of risk.

    What happens when a customer generates a number of abuse complaints, will the address space be SWIP'd to you as an individual? Are you willing to take on that liability? Or do you have a legal entity handling all of this? Will HE continue to lease you address space when they're receiving abuse complaints generated by your subscribers? From my experience, HE is not as generous as other providers at handing out address space. My personal experience.

    You're at the mercy of one provider, almost the same scenario you were in with Verizon. You're still bound by their terms and have zero control over it when you're single-homed to them.

    If you want to truly act as an ISP and not be at the mercy of another provider, you'll have to take the necessary steps to do so.

  25. #25
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    Quote Originally Posted by Blc4 View Post
    And what happens when a customer does commit a crime? 1 out of 200 is still some form of risk.

    What happens when a customer generates a number of abuse complaints, will the address space be SWIP'd to you as an individual? Are you willing to take on that liability? Or do you have a legal entity handling all of this? Will HE continue to lease you address space when they're receiving abuse complaints generated by your subscribers? From my experience, HE is not as generous as other providers at handing out address space. My personal experience.

    You're at the mercy of one provider, almost the same scenario you were in with Verizon. You're still bound by their terms and have zero control over it when you're single-homed to them.

    If you want to truly act as an ISP and not be at the mercy of another provider, you'll have to take the necessary steps to do so.
    No way in hell it would be SWIP'd to me as an individual LOL. Of course I would have the business registered and the connection would be under the business not under me.

    I am not at the mercy of a single provider. I am talking about getting a p2p link to one wilshire then i can get any provider from there. All I am getting from socal edison is a point to point link not transit. I don't even think they sell transit.

    Honestly for the size I am thinking of I don't think being single-holmed is a problem. I dont plan to row this to thousands of customers. Yes if there was downtime I would even give some refunds which is more than most ISPs would do. I can very easily manage a network myself that is doing <1 gbit of traffic.

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