[GW-C] Re:Open Media?

[D. Hugh Redelmeier]

| From: James Knott <james.knott-bJEeYj9oJeDQT0dZR+AlfA at public.gmane.org>

| D. Hugh Redelmeier wrote:
| > The cost of the last mile is not at all related to traffic.  So UBB
| > should not apply.
| >    
| That's why I said a connection cost plus data

As you pointed out, and I neglected to, the last mile cost has some
relationship to cost for some technologies: IP over cable and
wireless.

I was talking about / thinking about ADSL since that is where the
flashpoint is.

| > The backhaul costs (from last mile to third party ISP connection
| > point) are pretty low.  So UBB should be really low.
| >    
| 
| It's cheap, but not free*.
| *In the case of wireless providers, there's also a limit on available
| bandwidth.

In the case of wireless, I expect that the major cost is the last
mile.  Maintaining all those cell towers and buying the limited amount
of spectrum.  I could be wrong.

If nothing else, UBB for wireless can be used to rationally divide
divide the pie.

The outrageously high cost of long distance from cell phone providers
shows clearly that they are charging based on value, not cost (I
explained previously what I meant by those terms).  The incremental
cost of providing long distance is vanishingly small these days (I get
it retail for a penny or two a minute within Canada and US, including
termination, from a couple of VoIP providers who make money at that
rate).

I've heard that the cost of the internet infrastructure goes down by a
factor of 10 for each level you go closer to the core.  So my guess is
that backhaul cost is in the noise.

|  It also affect how much data an ISP can provide to
| it's customers.  If an ISP finds capacity is not sufficient, then more
| hardware etc. has to be purchased, installed and maintained.  It's in this
| area where UBB kicks in, rather than the "last mile".

Sure, but we're not talking about UBB from the ISP, we're talking UBB
from Bell to the ISP, for the last mile + backhaul.

|  For many years,
| business users paid more for a basic telephone line than residential users, on
| the understanding that they'd use the phone more. The actual installation of a
| phone and cable pairs etc. would be similar for business & residential users.

That isn't my understanding.

The regulatory regime decided that cross-subsidization would be good
for social goals:

- rural lines were heavily subsidized

- businesses subsidized consumers

- private line subscribers subsidized party-line customers

- long distance traffic subsidized local lines (and increasingly so!)

- DTMF customers subsidize pulse dial customers

- (in my youth) those with coloured phones subsidized those with black
  phones

That model kind of worked but it prevented innovation and it depended
on monopoly.  Any opening up of the field would allow competitors,
unless similarly shackled, to cherry pick their customers.

| From: James Knott <james.knott-bJEeYj9oJeDQT0dZR+AlfA at public.gmane.org>

| D. Hugh Redelmeier wrote:
| > The cost of the last mile is not at all related to traffic.  So UBB
| > should not apply.
| 
| Actually, for a share medium, such as cable or wireless, it does apply.  
| With ADSL, you still share bandwidth at the DSLAM and beyond.

Right.

Some ISP's want to be able to colocate in the COs but I think Bell is
blocking this.  That makes the backhaul costs somewhat self-inflicted.

But I really think that the backhaul costs are or should be
vanishingly small.  After all, there are rougly four orders of
magnitude fewer COs than retail customers.
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