State Super-DMCA Too True

Mon Mar 31 08:49:29 UTC 2003

Peter Galbavy wrote:
> Er, isn't that the fundamental difference between IP and fixed-bandwidth
> voice ? I have spent any number of years trying to 'educate' old guard telco
> management and planners that one of the key economic benefits of the
> Internet over old fashioned private networks is that the sharing of capacity
> actully works 99.99% of the time...
> 
Yes, this is the fundamental difference, and it isn't a bad thing. 
However, the theory of oversell is dependant on the type of customer. In 
production, businesses actually oversell better than other customer 
type. ISP transit customers oversell next. Then there is the home user 
who can be oversold the least amount. Granted, 99% of the oversell 
problem with home users has now become piracy. It's no longer the one or 
two power users, but everyone and their dog that is computer illiterate 
but can still install p2p software or at least use it if their friend 
installs it for them.

> To many telcos came into this market and sold 'no overbooking' QOS and then
> wondered why so few bought their overpriced services compared to the new
> (also going bust now) network operators ?
> 
Yeah. Give things away for free and you go bust. In Oklahoma, the telco 
price for DSL is around $35. SWBell was doing a plan for the longest 
time (may still be doing it) of allowing ISPs to use their DSL, but the 
problem with the deal is that the ISP only got $10 out of it. $10/mo for 
1.5Mb bandwidth? ha! If I'm nice, I might give you 64k for $10/mo. 
Modems have the luxury of working well on oversell because we 1) 
oversell the lines going into the modems at anywhere from 4:1 to 10:1 
depending on the town and 2) oversell the bandwidth because p2p is too 
slow and takes too long, so many modem users don't use it. Take this to 
DSL speeds and then it's suddenly attractive and they'll suck a 1.5Mb/s 
worth in nothing flat. Let's see. It costs me a minimum of $1000/mo for 
a T1 (loop charge, not port) to some of these DSL supporting towns. The 
home user isn't going to pay $1000/mo for their 24/7 p2p. I can't afford 
to support it at $50/mo either. Even cranking up to DS3, I don't save 
much on the oversell. 30 customers doing p2p will do well on saturation 
of a DS3 and even if I have 180 customers with only 30 doing p2p, 
$9,000/mo (50/per) is hardly going to pay for the DS3. Much less the 
SWBell "you get $10" plan. Thus I charge more than $50/mo and you can 
forget getting 1.5Mb at that price. Unfortunately, there are ISPs out 
there who are trying to compete against people in Chapter 11 or people 
who are subsidizing DSL costs with other costs (ie, SWBell does 1.5Mb/s 
for $49.95/mo which they are subsidizing with the telco and business 
customers but still lose money on the home user).


-Jack