WORTH READING cost of 1 gig of transport

[David Farber <dave () farber net>]

Begin forwarded message:

From: "Stan Hanks" <stan () colventures com>
Date: April 14, 2009 7:35:05 PM EDT
To: <dave () farber net>
Subject: RE: [IP] Re:   cost of 1 gig of transport

I take some exception to Larry's comment. It wasn't necessarily the  
towns not getting the on and off ramps due to a lack of desire, it was  
a matter of economics.

When we were doing the Enron build, many of the small towns "got it"  
and attempted to place onerous conditions on grants of right-of-way  
through their towns. Having grown up in a town in the middle of  
nowhere in Texas with a population of 2,400, I had a certain amount of  
sympathy for their cause -- I got what a huge advantage that would be  
to the town, and the people in it. And the town fathers? They "only"  
wanted me to be able to provide them ultra-high-speed Internet access,  
for free, forever.

If they had taken a position of "we'll share the cost" or "at my cost"  
or of "at prevailing market prices", I could have possibly sold it.  
What they didn't understand is exactly what that was going to cost to  
do... You see, you have to have optical amplifier sites every so far,  
and then you have to have full regeneration sites every so far. At  
these sites, you have the opportunity to break the signals out --  
maybe. Depending on when your network was built, and what the state of  
the art was when your equipment went in, you might not be able to  
break out signals other than at full regen sites, which are far less  
frequent than op-amp sites.

So, in  a perfect world, a small town would be at a nexus where you  
would naturally place a full regen. Wonderful, now all you have to do  
is provide core and distribution routers, monitoring and mangement  
servers, and all the other things that go along with having a drop on  
a major backbone network. OH -- and the space and HVAC and power  
associated with that. It gets to be multiple hundreds of thousands of  
dollars, pretty quick.

In a less than perfect world, in addition to that expense, you have to  
now break the cable in a place where you really didn't plan on doing  
that. And that gets really expensive really quickly -- you now need  
land for the regen site, plus buildings, generators, power plant,  
HVAC, tax title license white sidewall tires dealer prep and delivery  
charges. Oh -- and this new unplanned site? That just messed up the  
rest of your route plan because now you have to put the rest of the  
network spacing together around this new site which at best costs you  
for custom optical driver electronics for extra reach on a couple of  
sites, and at worst costs you TWO additional regen sites, one of the  
"east" leg, one on the "west" leg.

And regens are that gift that keeps on giving. In addition to the cost  
to acquire and build, you now have created a new taxable nexus, and  
have local, county, and state property taxes to deal with. Plus the  
fact that you now have more gear in more places which takes more spare  
parts and more trucks to deliver them and more guys in them to install  
and service them.

Those drops in small out of the way places get expensive quickly.  
There was one town in eastern Oregon which literally held us hostage  
on the matter for a long time. Eventually, when the economic analysis  
was done factoring in all the above mentioned items, it was determined  
to be significantly less expensive to acquire private right of way and  
bypass the town completely.

Not a win for anyone. But it's economic reality.

Stan

________________________________

From: David Farber [mailto:dave () farber net]
Sent: Tue 4/14/2009 3:31 PM
To: ip
Subject: [IP] Re: cost of 1 gig of transport





Begin forwarded message:

From: Larry Vaden <vaden () texoma net>
Date: April 14, 2009 4:52:53 PM EDT
To: dave () farber net
Subject: Re: [IP] Re: cost of 1 gig of transport

For IP if you wish:

> From: "David P. Reed" <dpreed () reed com>
> Date: April 14, 2009 10:57:41 AM EDT
> To: dave () farber net
> Cc: ip <ip () v2 listbox com>
> Subject: Re: [IP] cost of 1 gig of transport
>
>
> While I feel sympathy for WISPs in rural America and their inability
> to
> compete at scale or to generate adequate profits to reinvest in their
> customers' and investors' interests, I don't quite understand why we
> ought
> to view them as special experts on the communications economics
> issues of
> Big Cable and Big Phone in dense HFC and Fiber in urban areas.

Small towns and cities along the inter-city fiber routes did not
understand the importance of the Internet at the time they granted
rights of way, with the result that "local loop" mileage (and
therefore cost to rural operators) is _far greater than_ if on/off
ramps had been negotiated as part of the rights of way discussions.

Kind regards/ldv
Internet Texoma, Inc.




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