Broadband in Japan vs. US

[Dave Farber <dave () farber net>]

------ Forwarded Message
From: "Robert J. Berger" <rberger () ibd com>
Date: Wed, 05 Feb 2003 10:50:27 +0900
To: Dave Farber <dave () farber net>
Subject: Broadband in Japan vs. US

Both Joichi Ito's and Alex Salkever's articles were excellent, but I think
they are talking about different revolutions. It has been very interesting
living in Japan for the last few months observing both of the domains
discussed.

I want to amplify what Alex Salkever had to say (I don't feel at all
capabile to comment on Jochi Ito's article except to say "Right On" or
whatever is equivilant in Japananes)

Some of the things I've observed:

NTT East and NTT West are kind of like the RBOCs of Japan (ie the local
exchange carriers after divesture from the original NTT vertical monopoly)
They control the last mile copper loop infrastructure.

They have set the wholesale price for the copper loop at around 180 Yen
(US$1.50) per month. They believe they will make money on this. From what I
have been told, they base their calculations on their own assumption that
the copper plant has already been paid for.

They also offer intra metro fiber capacity at somewhere around 8000 Yen
(US$15) /month to backhaul traffic from the DSLAMs to the ISP's core
network.

Compare this to US wholesale prices for copper loop from RBOCs runs $5 -
$20/month, DS3's / OC3s are somewhere around $2000/month (I don't have a
really recent price on this though I'm sure its still orders of magnititude
greater than what Japan is charging.

I am working to get these numbers and assumptions confirmed, but so far have
heard similar numbers from a variety of second hand sources, though I was
told by a manager from NTT East that they feel that their wholesale pricing
is profitable.

We should hold the US RBOCs to a similar standard.

-- 
Robert J. Berger - Internet Bandwidth Development, LLC.
In Tokyo as Glocom visiting research fellow through April 2003
Cell: +81 80-3121-6128 Work: +81 3-5411-6613 http://www.glocom.ac.jp
eFax: +1-408-490-2868 rberger () glocom ac jp rberger () ibd com


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