[170061] in North American Network Operators' Group
RE: Level 3 blames Internet slowdowns on Technica
daemon@ATHENA.MIT.EDU (Naslund, Steve)
Sun Mar 23 22:26:43 2014
From: "Naslund, Steve" <SNaslund@medline.com>
To: Adrian <choprboy@dakotacom.net>, "nanog@nanog.org" <nanog@nanog.org>
Date: Mon, 24 Mar 2014 02:26:11 +0000
In-Reply-To: <201403211119.40822.choprboy@dakotacom.net>
Errors-To: nanog-bounces+nanog.discuss=bloom-picayune.mit.edu@nanog.org
>> ... In fact, having been a service provider I can tell you that I=20
>> paid the LEC about $4 a month for a copper pair to your house to sell=20
> >DSL service at around ten times that cost. I am sure the LEC was not
>>making money at the $4 a month and I know I could not fund a build out fo=
r that price.
>I take it you have not been a service provider for a while? Thanks to its=
=20
>removal from the tariff list, that $4 DSL pair from the ILEC for a third p=
arty=20
>ISP now costs $34... That doesn't include ISP cost.
That price is not what a licensed CLEC pays today for an unbundled pair, th=
at is the price of a DSL access loop which includes electronics. As a CLEC=
providing DSL we had our own terminal equipment collocated, however the i=
ncreased cost you quote only strengthens the point. If you are buying a DS=
L transport loop then the ILEC is actually selling a service on the dry lo=
op (they are working at least at layer 2). In the model being discussed th=
ey would not be able to do that, they would only provide the copper path. =
As a DSL provider you would have to collocate to keep the distance down. I=
n a FTTH model you would have to at least locate some kind of aggregation e=
quipment near the area or the fiber count gets unmanageable.
The company I work for now builds a lot of warehouses nationwide. Some of =
them in rural areas like Alabama. If the LEC did not have to provide acces=
s to that building they wouldn't. It just would not be profitable for them=
to install that much cable (in some cases miles of it) and equipment just =
to sell loops to competitive carriers. Picture this: our average building=
has maybe four POTS lines as backups to several MPLS high speed connection=
s that carry the bulk of the voice and data. The LEC gets to charge for fo=
ur POTS lines and a couple of fiber or copper loops to competitive carriers=
. That is just not profitable for them. They only do it because those are=
the ground rules for an incumbent carrier. As residential POTS lines cont=
inue to die off, their model has become one of trying to move into the serv=
ice provider area for video and high speed data. Many of them are also cel=
lular carriers in their own right. If they could not sell these services, =
the model does not work without drastically increasing costs to the CLECs. =
This may happen in any case since the residential POTS service was the cas=
h cow that funded the entire network they have today. They were able to re=
ly on that monthly revenue with very little overhead for over 50 years, it =
required little maintenance and technology upgrades.
If you are going to try to do a fiber build out to the home, what would be =
the monthly cost of just the cable if I cannot sell services on it and is a=
nyone will the pay the much. If I have to pay something like say $40 a mon=
th for a fiber connection, how much is service and equipment going to cost =
on top of that? If you have the choice of being a service provider or an i=
nfrastructure provider, why would anyone in their right mind want to be the=
infrastructure provider. The infrastructure guy eats the lion share of th=
e capital expense and takes all of the risk that someone at the home will c=
ontinue to want the service. That separated model just does not work excep=
t in the case of the ILEC which has capitalized that network over the last =
50 years.
Steven Naslund
Chicago IL
