Muni fiber: L1 or L2?

Tue Feb 12 00:14:52 UTC 2013

On 11-Feb-13 16:37, Scott Helms wrote:
>
>     I disagree; he is obsessing over how to reduce the amount of
>     fiber, which is a tiny fraction of the total cost, and that leads
>     him to invite all sorts of L2 problems into the picture that, for
>     a purely L1 provider, simply would not apply.
>
>
> Not at all, I've obsessing about all of the costs.  IMO if you can't
> pay for the initial build quickly and run it efficiently then your
> chances of long term success are very low.

The fiber plant would presumably be paid for with 30-year bonds, same as
any other municipal infrastructure (eg. water and sewer lines--the real
"pipes"), for which interest rates are currently running around the rate
of inflation.  There is no need to pay them off quickly.  Heck, some
forward-thinking folks might even see the fiber as paying for itself
through increased property values (and therefore tax revenues) and not
demand that it pay back its bonds through access fees at all, just the
(minimal) operating costs.

L2 and above, though, is another story due to the (relatively) short
depreciation cycle and higher operational costs--yet another reason they
should be separated.

> L1, at scale, sharing is simply impractical for all of its
> philosophical benefits for more municipal network operators.  That's
> not to say there aren't exceptions, but I can point to lots of
> successful muni operators who are the layer 3 provider.  I can point
> to several that offer open access at layer 2 successfully but I don't
> know of any doing L1 sharing that would call it a success.  Do you
> know of some that do?

There have been several examples cited in this thread, but I don't know
how many (if any) meet both your criteria, i.e. muni _and_ open at L1.

>     We have a philosophical disagreement here.  I fully support public
>     ownership of public ownership of "natural" monopolies, and the
>     fiber plant itself (L1) certainly qualifies.
>
>     However, running L2 (or L3) over that fiber is _not_ a natural
>     monopoly, so I do _not_ support public ownership.  At most, I
>     could stomach a "provider of last resort" to guarantee resident
>     access to useful services, in the IMHO unlikely event that only
>     one (or zero) private players showed up, or a compelling need to
>     provide some residents (eg. the elderly or indigent, schools,
>     other public agencies, etc.) with below-cost services.
>
>
> Too many places have either no or very poor services being provided
> from the market for me to take this stance.

... hence my reluctant acceptance of having a publicly-owned "provider
of last resort" for L2 and L3 services.  I would hate to see all that
fiber go unused just because no private players showed up to the party. 
OTOH, it is still fundamentally different from L1.

(Note that I also endorse this same model in urban and suburban markets,
where there is no shortage of folks wanting to offer service--but few
players with access to enough capital to put the necessary fiber in
place, none of whom are interested in open access.)

>     I think the ILECs got this part right: provide a passive NIU on
>     the outside wall, which forms a natural demarc that the fiber
>     owner can test to.  If an L2 operator has active equipment, put it
>     inside--and it would be part of the customer-purchased (or
>     -leased) equipment when they turn up service.
>
>
> What ILEC is offering L1 fiber access at all?

Think copper.

S

-- 
Stephen Sprunk         "God does not play dice."  --Albert Einstein
CCIE #3723         "God is an inveterate gambler, and He throws the
K5SSS        dice at every possible opportunity." --Stephen Hawking

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