[101942] in North American Network Operators' Group
Re: Lessons from the AU model
daemon@ATHENA.MIT.EDU (bmanning@vacation.karoshi.com)
Sun Jan 20 23:55:32 2008
Date: Mon, 21 Jan 2008 04:47:01 +0000
From: bmanning@vacation.karoshi.com
To: Geoff Huston <gih@apnic.net>
Cc: Randy Bush <randy@psg.com>, Andy Davidson <andy@nosignal.org>,
Andrew Odlyzko <odlyzko@dtc.umn.edu>, nanog@merit.edu
In-Reply-To: <4794015C.2010509@apnic.net>
Errors-To: owner-nanog@merit.edu
On Mon, Jan 21, 2008 at 01:20:12PM +1100, Geoff Huston wrote:
>
> Randy Bush wrote:
> >
> >and pricing in australia had nothing to do with a monopilist telco with
> >a rapacious plan highly well articulated and sold to the govt by an
> >arch-capitalist with a silver tongue?
>
> I don't know about that. However, I do know that relatively small
> isolated communities in the bottom end of the South Pacific Ocean have
> to make somewhat tough calls in the provisioning of international
> connectivity. Satellite is too slow, so it has to be submarine cable. If
> you head west on cable then the costs escalate because of the
> transcontinental costs just to get the the west cost and the trans-
> Indian Ocean runs are either long or run very close to geologically
> active areas, and even when you get to Singapore you still have to do a
> full trans-Pacific to off load the majority of your traffic, so the end-
> to-end delays start to rise.
her we start feeling for those poor Oz folk who want but can't
get sub 150ms latency.. and who's "buying" that they will forever be
held hostage to the low-latency center of the global network, the US.
one of the reasons GLORIAD was built was to get asian/eu connectivity
below 150ms.
> If you head north from the East Coast of
> Australia then in theory you can tap into the larger equatorial and
> north Pacific east west capacity market, but at the same time the end to
> end delays are high and the cost of heading north is almost the same as
> the costs of heading north east. And the east west market is highly
> uncertain - during business slumps capacity could be had very cheaply,
> but when asian demand is strong hen the price escalates very quickly, so
> there are some risks with this option. Or you can head directly north
> east, as Southern Cross has done some years back. The transmission delay
> is as close to optimal as you can get, but it doesn't negate the fact
> that at one of the cable is a community of 24M people, which is not
> exactly a big market by anyone's metric, and these 24M individuals have
> to fuel the entire business case for the infrastructure investment.
>
> Southern Cross cost some US $1B to construct about a decade ago - I
> suspect that a comparable project today would cost somewhere between
> $300M and $700M depending on the amount of redundancy you are after, lit
> capacity, and the precise landing points of the cable system. But these
> days its an investment not without risk, as the existing deployed
> systems have a significant capacity overhang in the AU/NZ end of the
> market and therefor have the ability to undercut the price of any new
> venture if they wished. So new ventures in cable systems in this part of
> the world normally requires the buy-in from larger cashed up players.
> The consequence is that aspirations of a fiercely competitive market
> with follow-on in pricing drops to end consumers tends to be difficult
> to realize. I suspect that in these markets it more of a battle between
> bankers and investment models than it has any bearing on the technology
> or the end user costs in the long run.
bankers, investment models, and government commitments tend
to drive nearly all infrastructure development.
end user costs are rarely, if ever reflected in the costs of
infrastructure deployment.
--bill
