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Finding real costs
From: David Farber <dave () farber net>
Date: Wed, 24 Sep 2008 14:30:19 -0400



Begin forwarded message:

From: Dave Burstein <daveb () dslprime com>
Date: September 24, 2008 2:03:39 PM EDT
To: "Stan Hanks" <stan () colventures com>, <dave () farber net>
Subject: Finding real costs

Dave, Stan
Stan's comments are all perfectly sensible and to the point about what was true than. They easily could be true today. The test is to put in the real numbers and see whether the costs are "painfully high" or "surprisingly low," especially at the large carriers who service 90+ % in the U.S., have fiber in place, but do need to add switches, routers, WDM and similar equipment to deliver more bandwidth.

When I put in the best numbers I can find. I come to bandwidth costs of 1-4% of the price charged the customer, and not increasing. Traffic is growing fast, 25-40% per year per customer (Odlyzko.) Relevant equipment costs are coming down about as fast. Carrier spending on bandwidth per customer has been about flat.

Data and evidence wanted. I certainly could be wrong. Especially as NN became a political battle, carriers are very reluctant to provide real data even to respected professors. If anyone has the direct bandwidth cost data, I'd love to see it. I'm specifically speaking of large, wireline carriers. I know wireless has more constraints and I am not expert there, cable local upstream has problems at least until they go to DOCSIS 3.0, and smaller carriers are in a bad situation. Christopher Yoo notes them in a brilliant article he just wrote about the possible problems of NN, well-informs. The key question remains, what are the costs at a Verizon, Comcast, Cox or Bell? (up to the limit of the local access without digging, such as the 25 down, 1 up of AT&T U-verse.)

There are probably people on the list who have answers. Please find a way, perhaps anonymously via Dave or similar, to get us the real numbers to inform this discussion.
Dave Burstein




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