Re: Level 3 blames Internet slowdowns on Technica

[Owen DeLong <owen () delong com>]

On Mar 21, 2014, at 12:13 , Jared Mauch <jared () puck nether net> wrote:

> On Mar 21, 2014, at 11:01 AM, Joe Greco <jgreco () ns sol net> wrote:
>
> > Why wouldn't you instead charge for the build out as a NRC and then charge 
> > for maintenance as a MRC?
>
> I for one would be willing to bear a high NRC start-up cost for someone building fiber to my home.  Not everyone 
> would make that tradeoff.  I know people who trade between the two local DSL/DOCSIS incumbents every year because 
> it's $5 cheaper/mo to get the next 12-month deal as a switcher.  While their time may not be worth ($5*12)/hour to 
> account for this minimal switching cost, it's certainly a real economic cost if you're waiting for a 4 hour window 
> for a tech to show-up and do an install.
>
> aside:
>
> I recently got natural gas at my home, the install cost was something like $2k, the utility had an option, pay an 
> extra $27/mo for however many months, or pay the $2k up-front.  Some folks can't absorb a cost like that, others can. 
>  I've heard from FTTH providers their install cost is in that same ballpark.  Really wish they would have been able 
> to pull fiber at the same time as the HDPE.  The fact that it was a contractor as well certainly means they could run 
> a side-business building their own fiber using the other utility as the main seed-money and have a wholesale fiber 
> network for "cheap".
>
> - Jared

Which is why, in many cases, the most plausible solution is something like muni fiber where the infrastructure is 
rolled out as many initial public utility builds with tax dollars and/or government bonds, then operated on a 
cost-recovery basis where the costs considered include both operating and bond-repayment. All L2+ service providers are 
given equal pricing and access to any subscribers that choose to sign up.

Nothing wrong with $27/month for 'however many months' so long as 'however many months' doesn't exceed about 9 years 
(108 months = 2,916, which I believe approximates reasonable interest for the period in question). If it's $27/month in 
perpetuity, however, then that's as disingenuous as cellular rates that include phones and is the kind of pricing 
distortion that people are complaining about.

Owen