On Sun, January 20, 2008 11:40 pm, Andy Davidson wrote:
Thanks to the pricing model imposed on last-mile connectivity imposed by the incumbent, it costs an ISP US$471/Mbit to send data to my customer[1]. Maybe the same data that's just come all the way from Oz through my transit for US$10.
That would imply that either: - There's an opportunity in the market to provide competing (cheaper) last-mile infrastructure - It really *does* cost that much to provide the last-mile connectivity In actual fact, the last-mile is cheap (at least for the UK, the incumbent is forced to let you have access to the copper at a fairly reasonable price); the business challenge is in balancing the cost of CO equipment and backhaul against revenue from customers served by that CO. Of course, the supplier for facilities at the CO, and quite likely backhaul from it, is the same incumbent; wearing a cynical hat, I might suggest that they are trying their best to make the situation seem more like the second option than the first. Putting your own gear out to the CO has some other wins too - you can control your own contention ratios (and, depending on the CO equipment, sell *different* contention ratios to different customer types), if you have L3 equipment on site then local customer-to-customer traffic doesn't touch your backhaul, and you get to deploy your own choices of technology at your own pace (SDSL, Annex M, EFM, VDSL, etc). Regards, Tim.