Re: FCCs RFC for the Definition of Broadband

[Leo Bicknell <bicknell () ufp org>]

In a message written on Thu, Aug 27, 2009 at 10:47:01AM -0400, Paul Timmins wrote:
> Seems like a good idea to the technical side of me, but the business 
> side sees a problem: that the employees like to eat in the 33 year span 
> wherein the company isn't making a dime on its customers.

The last letter of ROI is Investment.  When Ford decides to build
a new car it sinks in billions of dollars over a 5 year period where
it makes nothing.  It then starts selling the new model, and finally
reaches a point where it makes a profit, and uses that to find the
next Investment.

What Telecom companies have done is confused infrastructure and
equipment.  It would be stupid to plan on making a profit on your
GSR over 30 years, after 10 it will be functionally obsolete.  When
it comes to equipment the idea of 1-3 year ROI's makes sense.
However, when it comes to fiber or copper in the ground or on a
pole it has a 20, 30, 40, or even 50 year life span.  To require
those assets to have a 1-3 year ROI is absurd.

I remember when Cable TV was "new".  I lived in a neighborhood
without it, and the men with ditch wiches came through and wired
the entire neighborhood.  I don't think it had an ROI of a year,
or even 5, but it has now, 30 years later, spawned a multi-billion
dollar industry and allowed us to have things like Cable Internet,
which weren't even invented at the time.  Someone loaned them the money
to do it, and it appears to me the investment performed well, overall.

-- 
       Leo Bicknell - bicknell () ufp org - CCIE 3440
        PGP keys at http://www.ufp.org/~bicknell/

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