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North American Network Operators Group Date Prev | Date Next | Date Index | Thread Index | Author Index | Historical Re: The Paradox of Commoditization
<rant> There's no law stopping you or me from building out my own network over the top of the ILEC. Why don't we? Because its too expensive (at least thats what the complaint is.) As a commodity, we won't get the ROI to make it worth our while. That's why we ended up with a regulated monopoly in the first place. Technically, the ILEC's don't have a monopoly on the last mile. At least in the state I live in (Maine) If I declare myself as a facilities based CLEC, I automatically have access to the poles (rental charges not withstanding). I can overbuild Verizon. If I get a franchise agreement with the town (franchise agreements are not exclusive), I can deliver cable on that as well. However, since Time-Warner is the cable provider here, I doubt that they are going to make it easy or inexpensive for me to carry their content (HBO/Cinemax, etc.) on my network. How many networks did we want on the poles outside? Let's see, verizon, time-warner, central maine power (who is also talking about internet and phone access over the power system.), joe smith's telecom, susie q's telecom ad infiitim. How many of us can actually make money from that limited market? In the current model being a CLEC in a CO leaves you in the business of selling off of someone else's plate. I don't think thats a good business model. You're having to do business with a company that would rather stomp you out of existence. Worse, everytime you sign up a customer, you have to give all that information to your competitor. There's no substitute for owning the physical layer. If a company thinks they can build a better network thats less expensive to operate and do a better job than the current ILEC, they should stop griping and build it, market it and sell it. Alcatel has some very nice fiber equipment that will fit the bill. Did I mention that its just a tad more than $5,000. I think $5,000 might buy one chassis. Personally, If I could find a way to build a fast scalable network without wires, I'd go find financing and do it in a second. I can't, why? Too many trees and hills, buildings, etc.. So I'm back to wires/fiber/coax or what have you. Copper is out. you can't drive signal for any kind of distance, its too inefficient. Of course it is, the technology is over 100 years old and is about as refined as its going to get. That leaves fiber or coax, or a hybrid network. I won't even get into a regulatory $1,000,000 barrier to entry. Keep an eye on TimeWarner up here in Portland, ME. They're rolling out telephone service on the cable plant. The Road Runner service in this area kicks butt in a big way (very snappy performance for $45.00 per month residential - 85.00 per month business). No distance limitations of xDSL. Their phone service should do just as well. It cost them 2.5 million to rewire my town with a fibre ring (107 plant miles 6,000 homes past). Its fibre/coax hybrid plant running (I believe) at 1 GHz. What a business model; they get to sell me that cable 3 times over (catv,phone,internet). Did I mention that the ICLEC's are not allowed to deliver cable over the phone system? How fair is that? I say if the cable company can provide phone service, then the phone company can provide cable service. If we want competition, then lets have competition. However, a duopoly is not competition. Did I mention that the entire system is packet data and I haven't had an outage (at least that I've noticed) in over a year and that was during an ice storm If you're in a rural area, your phone and electric power went dead, too. worse, in a rural area, telecommunications companies are not interested in you either, No ROI. lots of plant, no subscribers. Its another reason we ended up with a monopoly. There's no requirements for competition in rural areas either. this is maine, I don't have as much choice when it comes to telecom up here as there is in other parts of the country either. Cell phone coverage is downright crappy. large area no subcribers. The Cellular companies want to deliver internet too, but at $0.40 per min or $0.03 per kilobit, I'm not interested. Their system won't do broadband either. In the meantime, I was just laid off from my job at a CLEC yesterday because they're not quite making a profit either: almost, but with 15 fewer people they might, but customer service is going to take a hit.. Worse the folks with the really big salaries that weren't getting it done are still there. </rant> ----- Original Message ----- From: "St. Clair, James" <[email protected]> To: "'Jack Bates '" <[email protected]>; <[email protected]> Cc: "'Gordon Cook '" <[email protected]> Sent: Thursday, April 10, 2003 6:20 AM Subject: RE: The Paradox of Commoditization > > Jack Bates wrote: > > *I have yet to see someone swear by their own life that the new > *technologies will meet the uptimes of the legacy. The fact is, in the > *telco world, they don't. > > Good point, but I think what Gordon *may be* saying is that part of the > reason the above is true is the degree monopolies are struggling to keep > their legacy systems. I would argue those folks who have paid (handsomely) > for *pure* transitions to new technologies have seen benefits; it is the > persistent hybrids of new and legacy that complicate service. > > *Even businesses that require time sensitive, guaranteed communications > *don't trust the new technology whole heartedly. > > Hmm, I would disagree. More and more critical processes (such as RTU > controls at utilities) are going to new technologies, with the ROI being > less expense of special technicians and remote controls. Dell "bet the farm" > on new technologies for e-commerce and helped turn PCs into a commodity. > > Just a thought... > Jim >
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