From nanog-bounces+bonomi=mail.r-bonomi.com@nanog.org Mon Dec 20 15:01:07 2010 Date: Mon, 20 Dec 2010 13:00:22 -0800 From: Leo Bicknell <bicknell@ufp.org> To: NANOG list <nanog@nanog.org> Subject: Re: Some truth about Comcast - WikiLeaks style
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In a message written on Mon, Dec 20, 2010 at 03:02:05PM -0500, Joe Provo wr= ote:
An assertion which was false; you can discuss the 'practicality' or whatever the experience has taught us as a nation, but to say "there are no" are "this datum generalizes for all" in most all of this=20 and sister threads is a major error. There is no national scope,=20 and the jury is still out if statewide scope [fpr video] is a good=20 or bad thing.=20 =20 Sorry to muddy with facts, please resume pontificating.
Facts are good. It appears there are more areas with two or more cable TV providers than I thought, and that knowledge is useful. I still maintain that the current set of regulation, laws, and economic realities have lead to insigifnicant compeition in that area, but that's purely an opinion.
You are also correct that there is a lack of context in these threads. There is a federal role (FCC, congressional), a state role (state PUC's), and a local role (county/city/town PUC's). Looking from the perspective of a town it's clear some have cable compeition, for example. Look at it nationally, and it's a really small percentage (on the order of under 2%, best I can tell so far). One man's everyone is another's no one.
I guess the question is, if these overbuilds work out so well in the cities where they do exist, why don't they exist more places?
As a character in a Robert Heinlein book says: "The answer to _any_ question that starts off 'why don't they..' is always 'money'." For a cable built-out to be 'profitable', you have to get some particular percentage of the 'covered' households to sign up for service. To support multiple providers the total 'penertration' in that area has to be at least: #providers * break-even_subscriber_percentage I have no idea what the current break-even percentage is, but (picking numbers out of thin air for the sake of argument) if it is, say 30% of the households within the service area, then there are simply "not enough customers to go around", even at complete market saturation (where 100% of the households have cable service) to support _four_ "profitable" cable providers. "Overbuild" is practical *ONLY* where: (a) the population density is high, lowering 'per customer' costs, and (b) service 'penetration' is high enough that the active subscriber base (as distinct from 'potential' subscribers) sufficient to support the 'overhead' of two complete, parallel, physical plants. This tends to be 'self-limiting', to up-scale, high-density housing, neighborhoods. The 'raw economics' of the situation may well be distorted by local government 'intrference' -- e.g., requiring a provider serve _all_ households within arbitrary boundaries, rather than just 'low hanging fruit' areas.