Re: Muni Fiber (was: Re: last mile, regulatory incentives, etc)

[Owen DeLong <owen () delong com>]

That is why I believe that the L1 buildout should be done by or under contract to the local authority (whether that be 
a municipality, county, special district, or whatever) and then leased to L2+ service providers on an equal cost per 
subscriber basis.

Now it doesn't matter which subscribers cost more or less to build out, they all cost the same to serve. Yes, the more 
expensive subscribers are being subsidized by the less expensive ones. Overall, I don't really have a problem with this 
as I don't think that the discrepancies within a given authority area will be that large. I do think that we should 
require each authority to build out to all end sites within their jurisdiction not served by a smaller authority.

For example, Contra Cost County, California would be required to build out El Sobrante (unincorporated area of the 
county), but, not Pinole, Rodeo, Crockett, Hercules, etc. (since they would be required to be built out by their 
cities).

Yes, it's likely that the L2+ providers would have a higher cost per customer to serve El Sobrante than to serve the 
cities. However, since that increased cost would apply equally to all L2+ providers, it would easily be passed on to 
those subscribers and they would, therefore end up paying roughly the true cost of their choice to live in an 
unincorporated lower-density area.

Yes, higher-density authorities would have a better chance of attracting greater competition and diversity in L2+ 
providers. However, nothing would prevent or exclude smaller authorities from working out colocation deals with nearby 
larger (or even groups of smaller) authorities and bringing the termination points of multiple authorities together in 
the same location. Likewise, nothing would prevent authorities from building inexpensive backhaul facilities to 
adjacent larger centers.

If you cleanly separate the L1 infrastructure from the L2+ services providers, you really do have opportunities to do 
better for the subscriber base overall.

Yes, the L1 buildout will cost slightly more than an optimal monopoly build-out by a service provider. However, that 
small increase in cost yields huge benefits on the other side in terms of reduced barriers to competition, increased 
diversity, and more price pressure on the L2+ services side of things.

Owen


Sent from my iPad

On Mar 24, 2012, at 12:49 PM, "Frank Bulk" <frnkblk () iname com> wrote:

> > From my own experience in my $DAYJOB, separating capital decisions at the L1
> and L2 layers would end up adding cost.  As mentioned elsewhere, GPON and
> similar shared medium approaches do not lend themselves well to structural
> separation.  The most practical approach is dark fiber runs from the
> customer to as few centralized places as possible.  The CLEC would co-locate
> their equipment at those centralized places.  The CLEC is then free to use
> ActiveE, GPON, whatever-the-next-gen-of-PON.  
>
> Structural separation works best when the cost to build to a customer are
> roughly the same. Wherever there's significant disparaties, those will be
> exploited and people will overbuild to the highest-margin/lowest cost
> customers to avoid the averaged cost of L1 network.
>
> Frank
>
> -----Original Message-----
> From: Owen DeLong [mailto:owen () delong com] 
> Sent: Friday, March 23, 2012 9:28 AM
> To: Masataka Ohta
> Cc: nanog () nanog org
> Subject: Re: Muni Fiber (was: Re: last mile, regulatory incentives, etc)
>
> <snip>
>
> It doesn't promote local monopoly if you don't allow the L1 company to
> provide L2+ services.
>
> If the L1 company is required to be independent of and treat all L2+
> services companies equally, then, the ILEC, CLEC, et. all have the same cost
> per customer.
>
> Owen