From: jim bell <jimbell@pacifier.com>
Date: Thu, 22 Aug 1996 09:03:37 +0800
To: Brian D Williams <cypherpunks@toad.com
Subject: Re: telco's vs x-phones
Message-ID: <199608211952.MAA00938@mail.pacifier.com>
MIME-Version: 1.0
Content-Type: text/plain


At 09:19 AM 8/21/96 -0700, Brian D Williams wrote:
>
>
>In a reply to Vipul Ved Prakash, Jim Bell wrote:
>
>>Assume 30 cents per meter per fiber for cabled fiber, or about $10
>(US) per meter for 36-fiber cable. 
>
>Siecore plain vanilla 36 fiber singlemode list $ 1.82 a foot, $5.46
>a yard

In other words, it's a fact of 5+ cheaper than I thought...


>>Each fiber pair should be able to handle approximately 1 million
>>conversations at current data rates, or a total of 18 million
>>conversations for that 18-pair cable, or 9.5 trillion 
>>conversation-minutes.
>
>At current data rates (OC-48 Sonet) 32,256 voice channels per
>fiber, 580,608 total for the fiber.

Well, I think I blew a decimal point, there.  Even so, semi-leading edge 
systems do about twice as well...

>
>Off by a factor of roughly 36 at this point.

However, the errors partially cancel, so I'm actually off by a factor of 2.

>
>>Multiply this cost by 10 for right of way, trenching, repeaters,
>>and other auxiliary hardware, or $100 per meter.  This is probably
>>just a ballpark estimate, but...
>
>Off by a factor of at least 10 not counting switching equipment.

In which direction? 

BTW, keep in mind I'm considering long-haul LD links between cities and 
states, NOT the kind of trenching that requires digging up city streets most 
of the way.  I don't doubt that some portions of a coast-to-coast link are 
substantially more expensive than $100 per meter, but as a proportion of the 
total length they are very small.


>In a reply to me Jim bell wrote:
>
>>The long distance companies are not "using local networks," your
>>customers are...to connect to those long distance companies.  And
>>any payments LD companies make to you are, indeed, a subsidy.  
>>Tell me, how much is this _subsidy_, exactly?
>
>Who's using who is a matter of perspective. 

Which is why you're unwilling to call it a "subsidy."


>Q) if you call a dog's tail a "leg" how many legs does a dog have?
>
>A) four, calling a tail a leg doesn't make it one.
>
>Point? The LD companies pay to use the RBOC's networks, calling it
>a subsidy doesn't make it one, except maybe to you. If they don't
>like it, they are free (or soon will be) to build their own, or use
>someone elses.
>
>>As an alternative, the phone company would presumably be entitled
>>to be served by phone lines, at say $30 per month or so, through
>>which their customers reach them.  $30 per month is $1 per day or
>>4 cents per hour or about 0.07 cents per minute.   3 cents doesn't
>>equal 0.07 cents, now does it?!?
>
>"Presumably be entitled?" The RBOC's currently charge what
>regulations allow, if the regs go away, they will charge what the
>market will pay.

You're full of inconsistencies.  First, you stated that the local/LD 
subsidies "went away with the breakup" (paraphrased) yet NOW you're saying 
"RBOC's currently charge what regulations allow."    I suggest that if those 
regulations "allow" RBOC's to charge 3 cents per minute to LD companies, 
_that_is_the_subsidy_ that you claimed had "gone away."  It's obvious that 
you don't want to use the dirty word "subsidy," but that's exactly what this 
thing is!

You need to remember that unless a price is defined by negotiation in the 
free market, there remains a possibility that it contains an underlying 
subsidy.  Since the whole purpose of the the payment from the LD company to 
the local co was as a subsidy, unless that payment disappears there is 
always a question of whether the subsidy remains.  Apparently it does.

The most obvious alternative, one that doesn't contain an obvious subsidy is 
a "per line per month" pricing system, where the number of lines counted is 
the maximum number of simultaneous calls that can be made through a given LD 
company at one time.  (NOT the total number of customers that the LD company 
has.)


>>How has this remaining SUBSIDY dropped over time, assuming it has? 
>>When is it scheduled to drop to zero?
>
>The rate has gone down since the regs are changing and competition
>is increasing. I would be interested in hearing why you think it
>will ever drop to zero.

It's because the locals don't NEED a subsidy.


Jim Bell
jimbell@pacifier.com