[3778] in North American Network Operators' Group
Re: Customer AS
daemon@ATHENA.MIT.EDU (Dave Morton)
Tue Aug 20 09:30:41 1996
Date: Tue, 20 Aug 96 15:09:11 +0200
From: Dave Morton <Dave.Morton@ecrc.de>
To: perry@piermont.com, smd@icp.net
Cc: nanog@merit.edu
>| We can't pretend to be able to replace the phone networks until we can
>| achieve similar reliability. Phone networks typically are spec'ed to
>| two minutes a year downtime.
>
>Uh huh, while I agree with you that the Internet is not
>remotely as stable as voice networks are, I think that
>this has a great deal to do with the revenue difference.
>
>Consider that a T3, eating 690 DS0s, at 10 cents/minute/DS0,
>is worth ($52560 * 690) some thirty-six million dollars a year
>in revenue on the voice network.
Sean - not picking nits but should that not be 28 T1s i.e. 24 * 28
giving 672 DS0s ?
Given the cost of even the cheapest voice tariff from DE to the US
as another example I get an annual worth of 311 million dollars
for the same DS2 circuit. Given that a leased transatlantic DS3 costs
between 6.5-7 million dollars p.a. this again reinforces your point below.
Dave
>I think you will agree that a T3 for Internet connectivity
>is not worth a very large fraction of that.
>
>Moreover, a backbone T3 for voice going down costs
>(at roughly 10 cents/minute/DS0) $4000/hour in lost
>billable revenue.
>
>If the money figures for Internet connectivity were anywhere
>near the figures for voice, and was billed by use in small
>increments, you would expect greater investment in reliability,
>as one sees on voice networks.
>
>Frankly, where there is significant competition and little
>or no loss-leading and cross-subsidy, the Internet
>is precisely as reliable as people are willing to pay for.
>
> Sean.
>