Re: last mile, regulatory incentives, etc (was: att fiber, et al)

[Owen DeLong <owen () delong com>]

On Mar 22, 2012, at 10:12 AM, chris wrote:

> On Thu, Mar 22, 2012 at 12:26 PM, Jared Mauch <jared () puck nether net> wrote:
>
> > On Mar 22, 2012, at 11:05 AM, chris wrote:
> >
> > > I'm all for VZ being able to reclaim it as long as they open their fiber
> > > which I don't see happening unless its by force via government. At the
> > end
> > > of the day there needs to be the ability to allow competitors in so of
> > > course they shouldnt be allowed to rip out the regulated part and replace
> > > it with a unregulated one.
> >
> > I think this partly captures the incentive case here, but there is also a
> > larger one at play.  Over the years the copper infrastructure was installed
> > and extended through various incentive programs.  You can see the
> > modern-day reflection of that in the RUS (used to manage rural
> > electrification act, part of USDA) and NTIA (Department of Commerce).

Yes, I find it quite "amusing" that I am paying additional fees on all of my telecommunications services to subsidize 
high speed PON networks in rural bumf*ck while I can't get anything like it in San Jose, California.

> > The barriers to entry are significant for a new player in the marketplace.
> > The cost is putting the cabling in the ground vs the cost of the cable
> > itself.  One can easily pick up hardware for $250 to light a single strand
> > of 9/125 SM fiber @ 10km for a 1Gb/s ethernet link.  That's low enough you
> > could likely get a consumer to buy the hardware.  The real cost is the
> > installation per strand foot/mile.

Yes, at some point, we need to recognize that LMI (Last Mile Infrastructure) is and likely always will be a natural 
monopoly in all but the most densely populated areas (and actually even in many of those). THe market simply won't 
support the costs of deploying duplicate infrastructure installed by multiple providers. Given this fact, the only way 
to ensure competition in the services arena is to divorce the infrastructure from the services and require an 
independent operator of the infrastructure to make it available on an equal basis to all service providers.

> > In the past this has been subsidized for copper plant.  There is no reason
> > in my mind that the fiber plant should be treated differently from this
> > standpoint.  I can find fiber optic cabling for $0.25/ft.  The problem here
> > is a multi-dimensional one that I've seen play out in a few markets:

One reason the fiber plant should be treated differently is that we should learn from the mistakes we made with copper 
and we shouldn't continue to subsidize corporations to build out infrastructure that extends their ability to block 
competitors and should, instead insist that subsidized infrastructure is deployed in such a manner as to benefit all 
and support healthy competition for the services market.

> > It is my firm belief that without a regulatory regime it will not be
> > feasible to connect many communities robustly to modern communications
> > infrastructure.  This could clearly change if the carriers involved see fit
> > to replace this infrastructure, but with their current debt loads, I think
> > it will be challenging to say the least.

WHile I agree with you, the situation is already somewhat inverted in the US in that the existing USF subsidies have 
now made it more cost effective to build advanced networks into rural low-density subscriber bases than into moderately 
populated areas.

> > I do think we need a new last-mile regime in many areas, be it more "fair"
> > access similar to pole attach fees or the removal of local barriers to
> > build this infrastructure.

The mechanism I have described above has been deployed in Sweden for some time now and is working out quite well from 
what I hear. It's also being tried in Australia now, much to the consternation of Telstra, but, it seems to be going 
well for the residents and businesses.

> > Some school and other governments here in Michigan would love to
> > sell/lease their excess fiber capacity to the private sector, but are
> > worried about turning a profit when it was built with taxpayer funds and
> > problems associated with that.  I'd like to see these barriers removed.  If
> > it's there, lets make it of value.  If the school system turns a profit on
> > their enterprise, that's fine, it can lower the tax burden elsewhere.

+1

I do not understand this aversion to government having other sources of revenue besides direct taxation. If government 
can earn money from infrastructure it built with taxpayer money by leasing it to corporations or others, so long as it 
doesn't interfere with the original purpose for which the taxpayers funded its construction, I think this should 
absolutely be allowed and even encouraged.


> > Me?  I'd be willing to pay $2500 to have Fiber built to my home.  I might
> > even pay more.  At this point, my research continues on building the fiber
> > and arranging my own easements for where to place it.  I suspect you just
> > need a few geeks that are willing to part with some extra $ for fiber
> > bragging rights and one can build it.

There was a project in New Zealand that started out not too far off from what you are describing above and resulted in 
a fiber run that now stretches from one end to the other of one of their islands IIRC. It was presented at PacNOG in 
American Samoa a couple of years back.

Owen