Level 3 blames Internet slowdowns on Technica

Naslund, Steve SNaslund at medline.com
Fri Mar 21 15:48:40 UTC 2014

What do you mean by average monthly bill?  That is the issue here.  The average monthly bill includes the services you are getting.  In the Chicago area a fiber optic access circuit unbundled from the imcumbent carrier to a competitive carrier is something like $10 a month or so.  How could you possibly think you can fund a build out in a new area for that price?  It may be possible to pay for that over 20 years.  The problem is that no one goes into business to break even over 20 years.  Would you fund my business model if I told you I needed hundreds of millions of dollars in capital expense and I might show you a profit in 20 years?

How much are you willing to have added to your cable and Internet service bills for the access component of the service?

Now think of this.  I am the guy who owns all of the layer 1 in your area.  What if I go out of business?  What if I overcharge you?  What if I charge $100 a month to access the infrastructure?  Who fixes that.  The government regulations. 

I think this business model existed before.  It was called the Bell System and the only way they could pay for it was to charge you high rates for services.

Steven Naslund

-----Original Message-----
From: Jim Popovitch [mailto:jimpop at gmail.com] 
Sent: Friday, March 21, 2014 10:15 AM
To: Naslund, Steve
Cc: Sholes, Joshua; Larry Sheldon; nanog at nanog.org
Subject: Re: Level 3 blames Internet slowdowns on Technica

On Fri, Mar 21, 2014 at 10:25 AM, Naslund, Steve <SNaslund at medline.com> wrote:
> Nice idea, too bad no one can make any money on building infrastructure but not selling the services on top of it.  Remember Global Crossing?  You are asking one company to put up all the capital expense and then try to recover it by allowing access to their infrastructure to anyone at low rates.  Not gonna work.  Just on a piece of paper, figure out what it costs to get fiber to your neighborhood from the nearest central office and then how much you have to charge to pay for that.  If you can get a reasonable price that returns your investment within 20 years, I will be impressed.

IIRC, GLBX didn't receive taxpayer funded subsidies, nor municipal bonds, in order to roll out their infrastructure.

I would gather that a fiber plant, on whole, costs less than the number of subscribers, multiplied by average monthly bill, and again by average length of service.... not to mention 20 years.

-Jim P.

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