Finding real costs

[David Farber <dave () farber net>]

Begin forwarded message:

From: Dave Burstein <daveb () dslprime com>
Date: September 24, 2008 2:03:39 PM EDT
To: "Stan Hanks" <stan () colventures com>, <dave () farber net>
Subject: Finding real costs

Dave, Stan
    Stan's comments are all perfectly sensible and to the point about  
what was true than. They easily could be true today. The test is to  
put in the real numbers and see whether the costs are "painfully high"  
or "surprisingly low," especially at the large carriers who service 90+ 
% in the U.S., have fiber in place, but do need to add switches,  
routers, WDM and similar equipment to deliver more bandwidth.

     When I put in the best numbers I can find. I come to bandwidth  
costs of 1-4% of the price charged the customer, and not increasing.  
Traffic is growing fast, 25-40% per year per customer (Odlyzko.)  
Relevant equipment costs are coming down about as fast. Carrier  
spending on bandwidth per customer has been about flat.

     Data and evidence wanted. I certainly could be wrong. Especially  
as NN became a political battle, carriers are very reluctant to  
provide real data even to respected professors. If anyone has the  
direct bandwidth cost data, I'd love to see it. I'm specifically  
speaking of large, wireline carriers. I know wireless has more  
constraints and I am not expert there, cable local upstream has  
problems at least until they go to DOCSIS 3.0, and smaller carriers  
are in a bad situation. Christopher Yoo  notes them in a brilliant  
article he just wrote about the possible problems of NN, well-informs.  
The key question remains, what are the costs at a Verizon, Comcast,  
Cox or Bell?  (up to the limit of the local access without digging,  
such as the 25 down, 1 up of AT&T U-verse.)

     There are probably people on the list who have answers. Please  
find a way, perhaps anonymously via Dave or similar, to get us the  
real numbers to inform this discussion.
Dave Burstein




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