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Re: Info on MAE-EAST
From: "Brett L. Hawn" <blh () nol net>
Date: Wed, 15 Jan 1997 22:18:06 -0600 (CST)

On Wed, 15 Jan 1997, Nathan Stratton wrote:

If part of your business was public interconnects why would you want to
help private interconnects? I think you are right though, at the
Atlanta-NAP we wanted to draw some of the big players, and one of the ways
to do this was to let them do private interconnects over the gigaswitch of
cascade 500 and then let them peer with people if they wanted to. 

Intelligent business knows when machines get overloaded and how to make
money by allowing people to circumvent their network. One can assume that if
the price for private interconnects were somewhat more reasonable more
people would come to the MAE's. Enforcing a poorly planned economy even at
this small a level is not the best way to make money. 

MAE-Houston, a small NAP in the scheme of things, but it makes for a good 
example so we'll use it. $2000/month to get your foot in the door, then
another large chunk of cash to connect to the Gigaswitch which all things
considered, isn't really needed. Rather than waste their money on equipment
that all in all just doesn't need to be there, why not make it more economic
for local players to get involved and cross connect to eachother. In the end
you not only save money by not bringing in useless hardware but you garner
more customers by lessening the price of the private interconnect. 

Think about it:

Assume you have 5 customers at your NAP, all paying $5000/month for the
local loop to the NAP + a connect to the Gigaswitch. You're making
25k/month, which if I guess correctly (and I could be way off, considering
I'm not really up on my figures) covers your costs and payroll with perhaps
1-5k left over profit.

Now take 20 customers all paying 3000/month for rack space and private
interconnects. You don't have the overhead of the Gigaswitch, you have less
people (less payroll expenses) and you're making $60,000/month. Less
overhead, more profit.


[-]                Brett L. Hawn (blh @ nol dot net)                       [-]
[-]                Networks On-Line - Houston, Texas                       [-]
[-]                           713-467-7100                                 [-]

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