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Re: [OM] 19th Century Link

Subject: Re: [OM] 19th Century Link
From: Ken Norton <ken@xxxxxxxxxxx>
Date: Tue, 26 Jun 2018 17:08:49 -0800
> Ken, I hear what you are saying. Unfortunately I live in an area that is not
> economical to serve. Back in the day the rural electrification initiative
> was a plus for the economy even though it was a net money loser by itself. A
> similar situation now maybe.

Somewhat. The main difference is that with all other forms of utility
service, there is rarely, if ever, any form of competition to undercut
and change the financial metrics. Electrical power is delivered to a
community or area by a single utility company. It's costly to build
out the power distribution network, but you can be pretty confident
that the payback will occur in 7-10 years for cash-funded builds, 20
years for bond-funded builds. Consider an expected life of 25 years
before replacement/augment. But ever since the passage of "Telecom
96", the ability to build a communications distribution network (what
we call the "last mile") is no longer feasible when you consider the
competition. There is a very good reason why "Google Fiber" hit the
skids. The numbers never worked and never could work. Those of us in
the industry questioned it from the beginning. The only way to make it
pay is to have an anchor customer that you build fiber to and you put
in access points along the way to pick up other customers along the
way. Alas, that isn't always going to work because where we need to
place our fiber is in utility right-of-ways that don't coincide with
where the customers are. We have to put fiber in the ground where the
various governments and bureaucracies tell us to put it. And shudder
the thought of crossing a railroad. (Every railroad crossing adds
about $100,000 to the cost of the project. Federal highways are the
same.

It's easy to compare what goes on here compared to other countries. In
most countries, the communications network is either highly subsidized
or competition is controlled. There is a lot of talk and pride about
free market competition, but most of it is smoke and mirrors. In the
vast majority of cases, there is just one physical connection to the
building and you can select your communications provider to deliver
services over that connection. Either you directly pay for the
physical connection to another company, or it's buried in the taxes or
other service provider fees. But the nice thing is that with rare
exception, there is just one company doing the "last mile"
connectivity and that's shared (as well as the costs for it) by
whoever is using it.

The USA is more wild-wild-west. I can point to spots where there are
literally dozens of cables buried in the ground inches from each
other. These are "hand dig only" locations. When new highway/road
construction is beingdone, there will be communication ducts installed
at that time across bridges, under roadways, etc. They can be
bought/leased by whatever company needs to cross that point. In metro
areas, the gas or water company will typically install ducts when they
tear streets up. I know of one place that has over 200 ducts installed
and they are all filled with fiber-optic cables. Each duct can carry
several cables with each cable containing hundreds of fibers. Rental
or lease of the ducts is as much as the cost of installing the cables
themselves.


> There is some hope. Our local power utility
> bought out a friend of mine who started up a local ISP. They paired up with
> T-Mobile and are investing a ton of pesos in fiber and LTE wireless towers.
> Unfortunately not enough density in our neighborhood. They're hitting the
> gravy first. Hook-ups are reasonable and last mile charges are pretty good
> too. Looks like we may have an option when CL goes TU. :)  Interesting that
> $100k/mile estimate. I'll compare with local experience.

Fixed Wireless is a technology that makes sense for low-density
distribution. The typical model of success has been to run fiber to
the serving antenna site and then build your sectors to cover areas.
The more customers in an area, the more sectors you overlap. The
equipment cost is about the same as terrestrial distribution, and the
towers/antennas are also pretty costly. But the payback is somewhere
between five and ten miles of in-ground distribution network. The
positive thing about Fixed Wireless (and/or LTE) is that it is quite
scaleable. Few customers? Few sectors. Easy peasy. We use it in some
places,

AG Schnozz
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