connectivity outside the US

Sean M. Doran smd at
Sun Jun 1 01:40:12 UTC 1997

Barry has an excellent point, and I'm glad that someone with
his, um, background is helping undersea cable operators and
Internet operators understand each other better.

The not very extensive history of private undersea ventures
has revolved around "cream-skimming" -- taking high-revenue
high-capacity traffic from consortium-built cables -- and 
bandwidth appreciation.   Essentially the private cable operators
want to walk a line between having to depreciate their assets
due to lack of revenue and having enough spare capacity for
those times when consortium partners run short.

That is, if you have a private cable, you don't want to
sell all your capacity to end users because you are hoping
that your competitors will run short on bandwidth, allowing
you to jack up your prices.   If and when you sell capacity
you want it in long-term contracts, preferably for restoration
of other paths so that if someone builds a competing cable
or the accountants start demanding some return on investment
you can do short-term "as-available" deals with government-funded
research networks.

Unfortunately this model does not tend to drive down prices
substantially for most users, and particularly not for most
users looking for an easy growth path (any kind of easily-tuned
end-to-end TDM in theory should change this).

Even turning unused capacity over for internal commercial purposes
(and it is unclear whether UUNET would be an "internal purpose"
given the joint ownership of the Gemini company) would be a 
huge risk as it involves tying capacity to a revenue stream,
which means making hard decisions when someone wants to pay
real money for that capacity when they run into a crunch.

Terrestrial capacity politics have some similarities, btw,
however the acquisition of rights-of-way in some places is
so difficult that alot of the cross-leasing games revolve
around trading capacity along various paths as much as 
playing the you're out of bandwidth pay us lots of money
games (which AT&T does remarkably well, btw, in the U.S.).

What becomes interesting is alot of new rights-of-way opening
up and making it possible to offer dark fibre along them.  This
directly threatens the price escalation model as well as the
managed-services pricing schemes bell-heads like.   This is good
for people building parts of the Internet.


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