RE: Level 3 blames Internet slowdowns on Technica

["Naslund, Steve" <SNaslund () medline com>]

What do you mean by average monthly bill?  That is the issue here.  The average monthly bill includes the services you 
are getting.  In the Chicago area a fiber optic access circuit unbundled from the imcumbent carrier to a competitive 
carrier is something like $10 a month or so.  How could you possibly think you can fund a build out in a new area for 
that price?  It may be possible to pay for that over 20 years.  The problem is that no one goes into business to break 
even over 20 years.  Would you fund my business model if I told you I needed hundreds of millions of dollars in capital 
expense and I might show you a profit in 20 years?

How much are you willing to have added to your cable and Internet service bills for the access component of the service?

Now think of this.  I am the guy who owns all of the layer 1 in your area.  What if I go out of business?  What if I 
overcharge you?  What if I charge $100 a month to access the infrastructure?  Who fixes that.  The government 
regulations. 

I think this business model existed before.  It was called the Bell System and the only way they could pay for it was 
to charge you high rates for services.

Steven Naslund



-----Original Message-----
From: Jim Popovitch [mailto:jimpop () gmail com] 
Sent: Friday, March 21, 2014 10:15 AM
To: Naslund, Steve
Cc: Sholes, Joshua; Larry Sheldon; nanog () nanog org
Subject: Re: Level 3 blames Internet slowdowns on Technica

On Fri, Mar 21, 2014 at 10:25 AM, Naslund, Steve <SNaslund () medline com> wrote:
> Nice idea, too bad no one can make any money on building infrastructure but not selling the services on top of it.  
> Remember Global Crossing?  You are asking one company to put up all the capital expense and then try to recover it by 
> allowing access to their infrastructure to anyone at low rates.  Not gonna work.  Just on a piece of paper, figure 
> out what it costs to get fiber to your neighborhood from the nearest central office and then how much you have to 
> charge to pay for that.  If you can get a reasonable price that returns your investment within 20 years, I will be 
> impressed.

IIRC, GLBX didn't receive taxpayer funded subsidies, nor municipal bonds, in order to roll out their infrastructure.

I would gather that a fiber plant, on whole, costs less than the number of subscribers, multiplied by average monthly 
bill, and again by average length of service.... not to mention 20 years.

-Jim P.