They still had to purchase HDs at the other end. It's not like data just lives in ether. At some point it's got to be written to someone's spinning rust.
How is this any cheaper than copying the HDs, shipping to the Northeast and installing the HDs into waiting servers there?
The logistical challenge of swapping 1000+ drives into/out of a small number chassis, keeping track of what data you've copied, would have been painful (but not impossible if stretched over a week)
I think the key issues here would be was moving the data at all time sensitive (is a two month latency not a problem), and, did they really have a "free" 1 GigPort they could sneak under the 5% window with? If it really was free (or very, very cheap) - then maybe it would have been worth it.
Depends on their architecture. Maybe the data and the system image lived on the same drive. Maybe they were just provisioning cheap / refurbished parts.
How is this any cheaper than copying the HDs, shipping to the Northeast and installing the HDs into waiting servers there?