[8305] in Commercialization & Privatization of the Internet
Re: Net Access/Service Providers
daemon@ATHENA.MIT.EDU (Miles R Fidelman)
Sat Nov 13 07:36:15 1993
Date: Sat, 13 Nov 1993 07:20:39 -0500 (EST)
From: Miles R Fidelman <fidelman@civicnet.org>
To: Ed Tully <tully@cscns.com>
Cc: com-priv@psi.com
In-Reply-To: <9311130547.AA23512@cns.cscns.com>
On Fri, 12 Nov 1993, Ed Tully wrote:
> Miles F. wrote
>
> >
> > just as a benchmark: it costs MIT about $100k per year for their
> > connection into the Internet through NEARnet (I believe they have two 10mb
> > microwave links) -- at 10,000 desktops on the campus network, that comes
> > out to 83 cents/per desktop/month! -- MIT charges internal users a $300
> > one-time connection fee to the campus net, and $20/month thereafter -- so,
> > the cost of campus networking is $19.17/month, or just about the cost of a
> > residential phone line or a basic capble tv service (note: the average
> > bit rate available to a desktop it pretty low when you divide it out, but
> > the peak rate is 10mb, which is what really counts)
>
> I missed someting here. Can you tell me where the $19.17 comes from?
> >
$20/month internal charge for a campus network connection - $0.83/month
for 1/10,000 of MIT's NEARnet costs leaves $19.17 ---- which presumably
goes for campus wiring, central servers, support staff, etc.
> > there's a big gap between $20/month and $290/mo. and between $290/mo. and
> > $1000/mo.
> >
> > since I don't think it costs that much more to provide metropolitan area
> > service over campus area service, there's a lot of money from smaller
> > sites being split right now between local telcos and Internet providors
>
> The difference is the campus is a captive audience and marketing costs are
> minimum. And there are a large number of users within a short period of
> time. and they don't have to borrow money to get going. And they get
> "free" support from students on campus.
>
captive audience, agreed, but 10,000 users x $19/month is over $2 mil. a
year - pays for a lot of staff and central equipment -- and universities
have costs of capital just like anyone else
> >
> > the entrepreneurial profit is in bringing the cost/user/month for small
> > sites down towards the $20/user/month currently achieved at larger sites
>
> I agree that is the target - we just have not figured out how to do that.
> If there were more metro area participation, I think it is possible. Maybe.
>
> >
> > one example of people getting ready to do this is the Continental
> > Cablevision / PSI deal, which will bring 24-hour Internet service to
> > cable tv taps at under $100/user/month
> >
>
> Why should it be that high? the cable is there - it is old plant and has
> been paid for several times and then again- the return amp is less than
> $150. The "modem" at the customer site is about $200 in quantity. Why is the
> price so high? New toy?
well, you just argued all the reasons that its so much cheaper to run a
campus network than a metropolitan network -- now you're begrudging
someone for bringing the price to a small end user down by a factor of 10?
by the way, right now, ethernet over cable tv modems cost $5000 each from
DEC/LanCity, and somewhat less from Zenith (for lower speeds) -- and I
don't think anyone is making them in quantity
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