Level 3 blames Internet slowdowns on Technica

Mon Mar 24 02:26:11 UTC 2014

>> ... In fact, having been a service provider I can tell you  that I 
>> paid the LEC about $4 a month for a copper pair to your house to  sell 
> >DSL service at around ten times that cost.  I am sure the LEC was not
>>making money at the $4 a month and I know I could not fund a build out for that price.

>I take it you have not been a service provider for a while? Thanks to its 
>removal from the tariff list, that $4 DSL pair from the ILEC for a third party 
>ISP now costs $34... That doesn't include ISP cost.

That price is not what a licensed CLEC pays today for an unbundled pair, that is the price of a DSL access loop which includes electronics.  As a CLEC providing DSL we had our own terminal equipment collocated,  however the increased cost you quote only strengthens the point.  If you are buying a DSL  transport loop then the ILEC is actually selling a service on the dry loop (they are working at least at layer 2).  In the model being discussed they would not be able to do that, they would only provide the copper path.  As a DSL provider you would have to collocate to keep the distance down.  In a FTTH model you would have to at least locate some kind of aggregation equipment near the area or the fiber count gets unmanageable.

The company I work for now builds a lot of warehouses nationwide.  Some of them in rural areas like Alabama.  If the LEC did not have to provide access to that building they wouldn't.  It just would not be profitable for them to install that much cable (in some cases miles of it) and equipment just to sell loops to competitive carriers.  Picture this:  our average building has maybe four POTS lines as backups to several MPLS high speed connections that carry the bulk of the voice and data.  The LEC gets to charge for four POTS lines and a couple of fiber or copper loops to competitive carriers.  That is just not profitable for them.  They only do it because those are the ground rules for an incumbent carrier.  As residential POTS lines continue to die off, their model has become one of trying to move into the service provider area for video and high speed data.  Many of them are also cellular carriers in their own right.  If they could not sell these services, the model does not work without drastically increasing costs to the CLECs.  This may happen in any case since the residential POTS service was the cash cow that funded the entire network they have today.  They were able to rely on that monthly revenue with very little overhead for over 50 years, it required little maintenance and technology upgrades.

If you are going to try to do a fiber build out to the home, what would be the monthly cost of just the cable if I cannot sell services on it and is anyone will the pay the much.  If I have to pay something like say $40 a month for a fiber connection, how much is service and equipment going to cost on top of that?  If you have the choice of being a service provider or an infrastructure provider, why would anyone in their right mind want to be the infrastructure provider.  The infrastructure guy eats the lion share of the capital expense and takes all of the risk that someone at the home will continue to want the service.  That separated model just does not work except in the case of the ILEC which has capitalized that network over the last 50 years.

Steven Naslund
Chicago IL