Date: Sat, 06 Jun 1998 17:57:45 -0500 From: Allen Marsalis <am@shreve.net> To: inet-access@earth.com Cc: linuxisp@friendly.jeffnet.org, freebsd-isp@FreeBSD.ORG, iap@vma.cc.nd.edu Subject: Re: US West and RADSL (fwd) Message-ID: <3.0.32.19980606175744.00ff7320@mercury.shreve.net>
next in thread | raw e-mail | index | archive | help
At 12:34 PM 6/6/98 -0600, Jawaid Bazyar wrote: >Let's examine what ISPs *think* they want. > >The cheapest DSLAM setup that can host more than a single customer and >scale to anything reasonable costs in excess of $10,000. same cost as USR TC, PM4's, etc.. albeit less ports though.. >Yes, you can get >a onesy-twosy Pairgain modem type thing for a grand or two, but do you >really want to pay $2K per port long-term? I didn't think so. Pairgain HDSL units run under $1K per port.. > >Alright, the Denver metro area as an example has approximately 30 central >offices. Instantly, in order to reach the whole potential customer base, >you're looking at $300,000. Just in equipment. Now you have to tie all >that together, in which case you're probably still looking at (minimum) >30 T1 ports into an ATM cloud, at $400 per month each, for a total of >$12,000 a month. Not to mention co-location/rent fees, anywhere from a >couple hundred to a couple thousand a month. The cloud would be priced so high by the telco as to eat up 75% of the gross revenues.. Just like they do now. If I have a customer with a second "modem" line (~$20) and internet service (~$20), then the telco gets ~$28 out of $40 for the service. Yet we provide much more information, entertainment, and quality service for the $12 we get to keep. The telcos will fight this thing "tooth and nail" anyway they can. That's why my idea is to locate adjacient to the CO and build a spread spectrum multipoint cloud to backhaul the bandwidth and totally stay off the phone network entirely.. A dozen or so 75' towers would do the job nicely and would be no different than the dozen or more cellular towers already here. Our NOC is in a 24 story highrise that can be shot at nicely from 360 degrees.. Anyone have any opinions on this "crazy" idea? > >And yes, you *have* to hit the entire area for this to make economic >sense, because we're seeing loop qualification rates of 15% to 25%. That >means that less than a quarter of the phone lines coming into the office >are even capable of having DSL run over them. kinda low isn't it.. >So, take your existing customer base, divide by two to weed out those who >won't pay more than $20/mo for anything, divide by five to get the number >you can reach at all with DSL, and divide by two again for those who are >happy with their existing internet service. > >Are you *really* going to invest $300,000 cash and $12,000 to $50,000 a >month so you can serve DSL to maybe 1/20th of your customer base? Exactly >which "most ISPs" can afford that? Ohh, right. The *big* ones. No one can afford that senario and expect to make a dime; big or small.. cable modems would rule if this were the case.. >Let the telco make this infrastructure enhancement. That's what it is. >The economics of this dictate that some one single company make the >investment, and since it's the telco's copper and the telco's central >office, and since the telco is willing to sell the service at a very >reasonable price, let the telco pay for it. I cannot name a service that the telco is willing to sell at a very reasonable price with the exception of maybe residential phone service which basically hasn't changed in decades.. Clearly compared to microcomputer technology, the phone companies have sat on their ass. And why not without any competition.. I really don't think they have a clue as how to compete fairly.. > >For ISPs to try to get Washington DC to 'force' telcos to give them >access to something that doesn't make any economic sense is a complete >waste of energy. That energy should be spent on spam legislation, or >fighting the comeback of Internet censorship. Who is lobbying for spam? Who is lobbying for internet censorship? and compare those organizations to the telecommunication lobby groups and you will see my point.. clearly it's like "grass roots" compared to major century old political and economic powers.. > >Force the telcos to let ISPs in, and you'll get it. But it won't be "most >ISPs". In fact, forcing this may well make it impossible for small ISPs >to get access, whereas only the largest ISPs can afford the "drop a DSLAM >in every CO" arrangement. Equiment is not the cost prohibitive factor here. On average, we spend 10 times as much each month to connect a port to the telco than the port costs as an equipment expense. ($5 verses $50/mo) In areas without serveral competing CLEC's to lower costs, the LEC dictates what our margins are by charging $1500/mo for a PRI.. (bellsouth) Believe me, these guys don't want to help me make money.. > >The above might be feasible in a small town with one or two COs. But not >in any large metro area - and that's where the big money is. > >-- that's not true either. You can get access in dallas for $9.95/mo verses $25-30 in some rural markets.. And many rural area have extended calling areas making the total market large even though the biggest town served might only have a population of 25k or less.. I know of one isp exactly the same size as us even though his largest city served is 1/10 the size of ours.. He pays less for PRI's and could care less about DSL since his customers are spread out 5 miles apart anyway.. He seems to be sitting prettier than some "metro" isp's in other states.. Allen _____________________________________________________________ Allen Marsalis President Voice: 318.222.2NET (2638) Shrevenet, Inc. mailto:am@shreve.net 333 Texas St. Suite 619 FAX: 318.221.6612 Shreveport, LA 71101 http://www.shreve.net _____________________________________________________________ Thoughtful Provider of Internet Services To Unsubscribe: send mail to majordomo@FreeBSD.org with "unsubscribe freebsd-isp" in the body of the message
Want to link to this message? Use this URL: <https://mail-archive.FreeBSD.org/cgi/mid.cgi?3.0.32.19980606175744.00ff7320>