Bandwidth Shortage And The Telephone Company 170
FasterThanLight writes: "This article from USA Today regarding (non)usage of existing fiber and its impact on bandwidth in the semi-near future ... more doom and gloom. Why? Greed, of and by the (surprise, surprise) large telcos." Remember, this story is about a predicted shortage, not a current shortage.
Semi-OT Rant (Score:5, Insightful)
When I see billboards around town suggesting a second phone line for internet use, I suspect the telcos' plan is to get lots of people addicted to having long internet sessions on their modem, after which the telcos will go running to Congress saying that they need to start charging local calls by the minute due to the excessive connect times in the Internet Age.
Why, why am I so cynical? Oh, well. It was fun while it lasted. I now return you to the scheduled rants...
I doubt it (Score:2, Insightful)
The beauty of capitalism is that where there is a demand, someone will create a supply because there's money to be made. In this case, more so because there is already so much unlit fiber there. SOMEONE will find a way to acquire it and get it lit if there is that much demand.
OTOH, the anticompetitive nature of the large Telcos concerns me somewhat. I wonder If I would have some sort of broadband access available to my rural home if SBC wasn't making so much money by making sure ISDN is my only option?
Uh, I think they got it wrong. (Score:3, Insightful)
2. Theres so much fiber in the ground on long haul routes that if there is ever anything resembling a shortage in my lifetime, I'd be impressed.
3. It's not nearly as expensive as the article poses to setup electronics on fiber. It's not $1 to install a fiber and $20 to put electronics on it. It just doesn't work like that.. Dug up the street lately? It costs a fortune.. Attaching the fiber to the Gigabit Ethernet port is far less.
4. Greed -- If there is money to be made, the bandwidth will be created.. It's called the law of supply and demand..
It's the lack of ROI (Score:3, Insightful)
What does this have to do with the shortage of services? Commodity prices are determined by the market. Aptly put by the article, fiber is like farmer's seed. Farmers are actually subsidized by the government to not grow certain crops, because it make it harder to make money when *everyone* is growing the same thing. When it costs 20 times to actually use dark fiber compared to just laying it down, this makes it hard to make money running a fiber service. The big telcos can afford to always undersell the startup. Such is the nature of the market. And don't spew any of that "there's no competition" crap, look at how many telcos there are. If that number is more than 1, you have competition.
When prices do rise due to "shortage" then as the article predicts, those who raise prices because they do not want to use more fiber will be undersold by new companies that will find it suddenly profitable to provide comms services. The article is basically predicting that the 20:1 cost ratio of use vs. creation will decrease.
Re:But telcos are -smart-! (Score:5, Insightful)
I have serious doubts about this article though. While they make the single valid point that it costs money to light up a network, there were and still are valid mechanisms for financing that activity. Most of the telcos that have gone under were in debt to the equipment manufacturers like Lucent, Ericson, and Nortel Networks. That is all bad debt now, which causes these manufacturers to cut costs by (among other things) reducing R&D expendatures. This means advances in the industry will not come as fast as they were, but they will still come eventually.
These manufacturers are still willing to finance the lighting of fiber networks, as needed, (in that such activity requires purchase of multiplexing equipment and switches, the sale of which these companies have financed for the past two decades).
When it comes down to it, the industry is returning to a pre-tech-bouble state, not dying completely. The determination of which companies will still be standing will be which are able to adapt quickly enough. Unfortunately, this is made more difficult with a Wall Street backlash against the telecom industry, but such things happen and will be overcome in time.
There will be no shortage because the market is capable of meeting demand. The required financing will become available because it is the only way the manufacturers will stay in business.
In closing, let me just say that I always get my technology news from McPaper [usatoday.com] because after all they're known for their technical expertise and research prowess.
--CTH
Bandwidth should be expensive (Score:5, Insightful)
It's a lot more than routers and fiber. In fact, compared with the costs of upkeep and support, the infrastructure is almost negligible. That's why there's so much infrastructure already built, but so little utilized.
Why not use it all? Because people are not yet willing to pay for what they get. Standard business practice is to charge the customer 5x the actual cost of a product or a service.
Broadband service is so desparately trying to compete with the low cost of dialup, that it's not making the margin it needs. Of course it doesn't scale linearly, as a 128kb DSL connection doesn't cost 32x a 4kb dialup, but a 128kb DSL connection for only 2x or 3x the cost of that dialup sure isn't making the DSL provider the same margin as the dialup gives the dialup provider.
Bandwidth is expensive, we want -- no, we demand 100% uptime, no slowdowns, this, that, etc. Until people are willing to pay the true cost of this service, none of the greedy Telcos are going to make any money out of this, and will have no motivation to build new infrastructure, make new plans available.
Why telcos hate dark fibre ... (Score:2, Insightful)
Despite what happened to Enron, they did have a role in moving staid industries away from regulated energy supply/demand contracts into a much more market-friendly environment. Too bad they could do a proper job (with decent accounting controls) on bandwidth.
LL
Huh? (Score:2, Insightful)
That was only last year!
I read that in my CCNA course
That was a release from Cisco a week before.
Man, thats alot of pr0n
Re:Coincidence? (Score:2, Insightful)
A good point. If all the 'waste' were eliminated - codered attacks, spam, etc. I wonder what the savings would yield. If ISPs are faced with increased bandwidth fees that would be a great motivator.
Looking at the internet 'growth' quoted for last year, I wonder how much of that was non-garbage traffic.
The sad state is ISPs find it easier to cap their user's bandwidth rather than manage and filter their networks.
Re:Uh, I think they got it wrong. (Score:2, Insightful)
Laying cable is not nearly as difficult as it may seem. I was actually recently chatting with my uncle, who is the civil works administrator for a large wired city, and digging up pavement is a legacy of the past.
There are so many redundant tubes under our roads right now that nearly any expansion that needs to be done can be fed through them. In our city, natural gas was put in by running new tubes through old waste-water mains. I'm sure fibre will be easier still to lay down.
And never underestimate the value of real wire connections. With heavy usage, the airwaves are becomming increasingly cluttered, and when people start demanding quality and consistent connections (like when appliances start acting as servers as a matter of fact), people might not be so accepting of internet service that cuts out when you use the can opener.
Ethernet unsuited for Telcom use. (Score:4, Insightful)
Phone companies simply can't use ethernet - it doesn't have QOS, or guaranteed packet delivery times, dedicated channels, etc... These are what telcoms want/need, and the technology that does it costs a ton. For your joe blow data network, ethenet makes sense - telcom is a different issue entirely.
BBK
Re:Bandwidth should be expensive (Score:3, Insightful)
Most $20 dialup services these days are going to be 56k, don't you think? And I can get 256k DSL for $40. Over 4x the bandwidth for double the price. For an extra $10 the take the reins off and I get what I can up to 768k (600k in my case).
So I pay 2.5x dialup for about 11x the speed. And that's dedicated. Remember that cable modems are pooled bandwidth, and pricing should reflect the difference. The economy of a pooled system would lead me to expect generally lower pricing, or higher peak bandwidth, which seems to be the case.
Re:Bandwidth should be expensive (Score:3, Insightful)
Telcos dont make the same profit off a DSL with 1.5Mbit/sec as a T1. In fact every Telco offered DSL with 2x to 10x the speed, then after a short time everyone was buying these highspeed DSL connections and not buying any T1's. What do you think happened? The telcos stopped offering t1 class dsl services. The highest speed you can get on DSL is currently 768K UP.
The problem isnt DSL, the problem is they make WAY too much money on Air^H^H^H Bandwidth. At our local telco, Ive seen ISP's run Cat 5 to other ISP's and sell T1's for 200 bux. And then the ISP turns around and sells it for 1500. Hell, We paid 3500 a month for an MCI T1 a few years ago.
Bandwidth is cheaper than you think. Just your wants doesnt fit into the thier business model.
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Business is a good game - lots of competition and a minimum of rules. You keep score with money. - Atari founder Nolan Bushnell
Re:Bandwidth should be expensive (Score:2, Insightful)
Reality Check. (Score:5, Insightful)
No, it's not hard, in fact it's pretty easy, though it takes a few weeks to set up.
If you want to run servers, you need to get a real ISP.
You call up bandwidth.com. You say, Hi, I'm Joe Blow and I want a megabit up and down. They will say "great, a T1 is just what you need".
The helpful staff will then compile a list of packages you can buy, ranging from about $800-1600/month for 1.54 Mbits/sec in most areas.
You see friend, in the real world, people have to pay for bandwidth. Your ISP has to do the above when they buy bandwidth, and logically, they can't sell it to you for less than they pay for it, otherwise they won't be in business very long.
They may get a little discount if they can afford a T3, but that's still $20,000-$30,000 a month, and is about the equivalent to 30 T1s.
Are all you people that whine that they want 1Mbit up and down, unrestricted, for $30/month math challenged, or just stupid?
Re:Uh, I think they got it wrong. (Score:3, Insightful)
Not quite, digging up the street is very expensive. But the marginal cost of putting some extra services into an already dug trench is low.
Re:Semi-OT Rant (Score:3, Insightful)
There is also a cost associated with printing the bill. Do US telephone companies tend to itemise not chargable calls or not?
Maybe you should move to the UK... (Score:2, Insightful)
I've got 1M/s cable modem (£20 pcm, or $29) which is connected 24/7.
I can also get ADSL if I wanted - cable was cheaper but the option is nice.
Then there's wireless internet - likewise, Cable worked out cheaper, but the choice is always good to have.
Plus I can get satalite internet if I really want fast downloads (56k uploads though - booo!).
Oh, and of course, ISDN, but who wants something that slow?!
Yup, maybe you should move to the UK if you want high-speed internet access, because there's plenty of it where I am!
It's happenning now (Score:2, Insightful)
hugonz