Re: Hope for Wireless Cities. (revised for clarity)

[David Farber <dave () farber net>]

________________________________________
From: Miles Fidelman [mfidelman () meetinghouse net]
Sent: Monday, March 31, 2008 10:48 AM
To: David Farber
Cc: ip
Subject: Re: [IP] Hope for Wireless Cities. (revised for clarity)

David Farber wrote:
> From: ken () new-isp net [ken () new-isp net]
> Sent: Monday, March 31, 2008 6:24 AM
> To: David Farber
>
> A century of uninterrupted telecommunication would beg to differ with you.
> While no one here is defending the telco business model as perfect, the
> reality is that is has served us well, albeit expensively, and it should
> be pointed out that you and I are communicating through this medium in
> this discussion.
Something that keeps getting lost in the discussion:  The economics of
networking look very different when looked at from an enterprise network
perspective, vs. a carrier perspective.

The Internet largely grew up as an enterprise network for academics,
government, and industry, and only later became something more like a
carrier.

The philosophies and economics are VERY different:

For an enterprise network:

- the costs of computers, switches, wires, leased circuits, etc. are
small when compared to other business costs (materials, manufacturing,
sales, marketing, shipping, etc.)

- ROI is measured at the bottom line: if the network increases revenue
or reduces operating costs, it's a win

- it's cheaper to deploy the latest equipment, everywhere (highest
common denominator), because you don't know who's going to be in which
office, when, or what they're going to need, and it's a lot cheaper to
pull wire once, than to open the walls again

- it's costly if a user doesn't have the capabilities they need to do
their job

For a carrier:

- the carrier doesn't see benefits or costs to the end users

- ROI is measured against sales of network services and maybe of content

- deployment is driven by the mass market: deploying a lowest common
denominator network has a higher ROI, even if it doesn't meet the more
specialized needs of the top end of the market

It's no wonder that we have gigabit ethernet in our homes, offices, and
campuses, but the carriers are only deploying megabit services.  The
economics drive things that way.

That's why I'm always driven to municipal and cooperatively owned
networks as the only way to get to enterprise level services for small
users.  Essentially a municipal network is a very large campus network,
owned by the taxpayers in a community.  The economics work for streets
and waterworks.  Municipal electric utilities have proven pretty
effective (avg. cost of electricity is 18% less than from commercial
power).  The model should work for networks - and does in some
communities: the only projects deploying gigabit FTTH seem to be those
being pursued by municipal electric utilities, which provide another
example to draw from.

Miles



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