[101949] in North American Network Operators' Group
Re: Lessons from the AU model (was: An Attempt at Economically
daemon@ATHENA.MIT.EDU (Tim Franklin)
Mon Jan 21 05:55:48 2008
In-Reply-To: <7D042CF9-64E6-4674-ABC9-5AF606E6505E@nosignal.org>
Date: Mon, 21 Jan 2008 10:53:36 -0000 (GMT)
From: "Tim Franklin" <tim@pelican.org>
To: "Andy Davidson" <andy@nosignal.org>
Cc: "Andrew Odlyzko" <odlyzko@dtc.umn.edu>, nanog@merit.edu
Errors-To: owner-nanog@merit.edu
On Sun, January 20, 2008 11:40 pm, Andy Davidson wrote:
> Thanks to the pricing model imposed on last-mile connectivity imposed
> by the incumbent, it costs an ISP US$471/Mbit to send data to my
> customer[1]. Maybe the same data that's just come all the way from Oz
> through my transit for US$10.
That would imply that either:
- There's an opportunity in the market to provide competing (cheaper)
last-mile infrastructure
- It really *does* cost that much to provide the last-mile connectivity
In actual fact, the last-mile is cheap (at least for the UK, the incumbent
is forced to let you have access to the copper at a fairly reasonable
price); the business challenge is in balancing the cost of CO equipment
and backhaul against revenue from customers served by that CO.
Of course, the supplier for facilities at the CO, and quite likely
backhaul from it, is the same incumbent; wearing a cynical hat, I might
suggest that they are trying their best to make the situation seem more
like the second option than the first.
Putting your own gear out to the CO has some other wins too - you can
control your own contention ratios (and, depending on the CO equipment,
sell *different* contention ratios to different customer types), if you
have L3 equipment on site then local customer-to-customer traffic doesn't
touch your backhaul, and you get to deploy your own choices of technology
at your own pace (SDSL, Annex M, EFM, VDSL, etc).
Regards,
Tim.
