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melao
melao
12/4/2012 | 10:22:55 PM
re: Solution for the Fiber Glut: Turn It Off?
"Now we have broadband for sale. Yeah, OK, it's nice to see your porn download faster, but where's the killer app that convinces people they NEED it? Where's the productivity increase? I think this is the question that will need to be answered to drive broadband back to faster growth."

I totally agree.
But what happened to Voice over IP(i mean it over the Internet not on a private network), Video on Demand, 2nd wave of e-commerce, 3rd wave of e-commerce ?
Weren-¦t these applications ,plus the growing number of internet users, suposed to drive the bandwidth demands ?

I guess everybody already envisioned the apps, but the question is to make it available economically.
dave77777
dave77777
12/4/2012 | 10:22:55 PM
re: Solution for the Fiber Glut: Turn It Off?
Why did people start buying increaing numbers of PCs in the 1980 and 1990s? Not because they wanted a PC per se, but because of the killer apps that came with it. Word processors, spreadsheets, Internet browsers, etc, drove the growth in this market. These apps provided productivity increases, which are really the fundamental basis of civilization itself (efficient food production (i.e. more food production per person producing food) allows people to live in cities and do things other than produce food).

Now we have broadband for sale. Yeah, OK, it's nice to see your porn download faster, but where's the killer app that convinces people they NEED it? Where's the productivity increase? I think this is the question that will need to be answered to drive broadband back to faster growth.
rjmcmahon
rjmcmahon
12/4/2012 | 10:22:54 PM
re: Solution for the Fiber Glut: Turn It Off?
The ILECs would rather pay millions in fines to regulators for unfair competition than help competitors.
_______________

ILECs have no interest in helping anyone.

It's ironic that SBC has turned to buying advertisements during the popular TV show "Survivor". Those ads probably cost more than any fines imposed on them.

The propaganda says SBC employees are working hard. The ad did not mention any new services, no new price breaks, no new competitive offerings, no help with ecommerce, but rather said that SBC has ordinary people doing an extraordinary job.

They problem is that SBC does not know how to do an average job, let alone an extraordinary one. SBC does not understand competition nor free markets. SBC is a state run industry which will never build and enable a network which meets an information society's needs.
rjmcmahon
rjmcmahon
12/4/2012 | 10:22:54 PM
re: Solution for the Fiber Glut: Turn It Off?
Schools, houses and stores are built after the roads and not before. WE HAVE NO ROADS for our computers. There will be no such thing as a killer app until WE GET OUR ROADS.
rjmcmahon
rjmcmahon
12/4/2012 | 10:22:53 PM
re: Solution for the Fiber Glut: Turn It Off?
dljvjbsl; Compression is not a replacement for technology advancement in I/O. With your arguement, we would still be using hard drives in the megabytes or less, but the controllers would keep integrating new compression technologies.

This is the wrong approach.

Also, caches make sense where access latencies can be improved. You seem to be confusing latency with throughput.

PS. Bandwidth is not infinite. It's painfully finite, particularly when legacy last mile networks are controlled by central planners and monopolists.

trixie
trixie
12/4/2012 | 10:22:53 PM
re: Solution for the Fiber Glut: Turn It Off?
7-of-Dave asked:

After the first 12-15 wavelengths, line cards are about 70-75% of the total systems costs.

What about the first 12-15?

And if that's the case, how can there possibly be so much unused capacity? Wouldn't they just not have bought as many line cards? Or did you mean incremental cost? That's a very different equation than total cost to build out the network.
_________________________________________________
Reply:

I'm speaking specifically to node costs in a point to point backbone transport system, as I indicated in my original post on this matter.

Total network cost is a different animal, as you have fiber installation, which still remains by far the most expensive OPex investement, placement of huts, etc. Once the pipes are laid, it's a mtter of installing the valves throughout the line.

Unused capacity can be measured by either the number of dark fibers , or by the amount of un-utilized system capacity available on existing networks (in this case, wavelengths not yet lit in a DWDM system) or both. That's another raging debate- how exactly to calculate just how much we have of too much capacity.

If you look at components as a percentage of total systems costs, for the first 10-15 wavelengths (again, speaking to a DWDM core transport environment) the lion's share of costs are attributed to all the amplifiers and common equipment for the system. After that, the line card costs take over.

If taken from your perspective, all expansion (adding lambas) is an incremental cost- I would agree with this. Those incremental costs aren't trivial, however; in fact, they are quie significant in terms of network equipment costs- my previous point- about 75% of all equipment costs in the network.

my model was assuming installed fiber plant, which is a sunk cost usually not brought into the network equipment costs calculations.

The unused capacity stems from the fact that too many players are doing the same thing, on parallel lines.Everbody has their own network, running a dozen or lambdas on them, with expansion potential into terabits on each system.

Despite this, there is still a huge crunch, as the "last mile", as well as metro have not yet scaled to effectively feed this monster in the backbone. Sort of like a 1/2" house spigot attached to the alaska pipeline, to maintain the oil metaphor...
MP_UK
MP_UK
12/4/2012 | 10:22:52 PM
re: Solution for the Fiber Glut: Turn It Off?
Schools, houses and stores are built after the roads and not before. WE HAVE NO ROADS for our computers. There will be no such thing as a killer app until WE GET OUR ROADS.
------------------------------

Agreed, but isn't the problem ROI? When I last worked for an operator about 18 months back, any capital sign-off had to be on the back of a business case predicting ROI in 6 months! (Which incidentally was why we dropped our VoD project.) While the CapEx situation stays like this, I don't expect my FTTH connection any time soon.

As far as roads are concerned, I don't think anyone built them 10 lanes wide in the 1930's - there weren't that many cars. It's the same with our access networks, when the majority were built 100Mbps transport wasn't a consideration, and just like roads the upgrade process can be painfully slow.
PhotonGolf
PhotonGolf
12/4/2012 | 10:22:51 PM
re: Solution for the Fiber Glut: Turn It Off?

I said this in a post earlier, but I'll expand.

I believe the killer app is industrial productivity. For all of the reasons you've seen in this thread. And especially ROI.

Lets face it ... most of us spend our days working for an organization which is motivated to make money. While markets, products, and customers come and go, the one effort that *always* pays is increased productivity.

I've consulted for a number of companies who's value proposition was connecting manufactures with their supply chain. While the application did 100 different things, the customer could justify the entire investment on just one or two! And these investments were in the millions. Example: If interfacing with a supplier of widgets for my equipment (product) allows us to real time echange ECO data and understand consequences, it can save tens of thousands of dollars in productivity - for every instance!

So these companies, who spend millions on adding one or two capabilities to increase productivity, are only doing so because of the availability of the internet. This allows a uniform (and cheap) means to connect with their suppliers. But even the net today isn't enough for all of these. Read about Oracle below.

How many companies have a paperless interface with their suppliers, customers, auditors, partners, employees, prospects, consultants, etc..? I'm aboslutely convinced that the ROI of this kind of automation will drive consumption of bandwidth by these companies through the roof! When you don't have to worry about "sending 10 meg files", it will become the norm.

Just look at the numbers Cisco saves from their use of their network. Its incredible. I'm certain most of their enterprise customers buy Cisco products often in hopes of emmulating Cisco's productivity gains. Do the math ... what does a 2% productivity gain mean to Cisco in earnings?

This is what drove the PC deployment ... not us playing Spider Solitair (tough game ... only beaten the four suit game once in my life! :))

You know, Oracle offered their customers the option of letting Oracle host the h/w and s/w for their enterprise applications. Many companies took them up on it - this adds and additional 2-3% *per month*! Think there's any return on that?? But Oracle had to suspend the program for some guys because the network reliability wasn't there. Think about it.

Yes, I believe that the industrial productivity will drive the consumption of bandwidth and eventually video on demand kinds of things will add to it, but I believe industry holds the key. That's the killer app.

P
dave77777
dave77777
12/4/2012 | 10:22:51 PM
re: Solution for the Fiber Glut: Turn It Off?
Thanks for the explanation. That makes sense.

Going back to my original point in all this, it seems likely that since the incremental costs are relatively small for selling existing lit capacity, the price is being driven down to artifically low prices, since all the costs are sunk.
trixie
trixie
12/4/2012 | 10:22:49 PM
re: Solution for the Fiber Glut: Turn It Off?
Going back to my original point in all this, it seems likely that since the incremental costs are relatively small for selling existing lit capacity, the price is being driven down to artifically low prices, since all the costs are sunk.
_________________________________________________

As the old joke goes, " we're losing $0.05 on every one we sell, but we'll make it up in volume"

I would agree, the prices are being driven down, but I don't think it's artificial in any sense.

Too much capacity- high supply=low demand= lower prices

Economic conditions- lower demand= lower prices

Market conditions- run-like-hell-from telecom = lower demand=lower prices

As someone else so pedantically educated us, the basics of supply and demand finally caught up with the market- prices were driven so low that revenues were less than the cost of operations.

Now, back to the original question- somehow, it seems to be more acceptable for a company to go dark via bankruptcy/liquidation than by intentionally shutting down to increase demand.

I guess the point I was trying to make is that customers can understand changes due to business circumstances beyond their control. To have someone intentionally do it to them is a different story.

If company A were to go under or reach insolvency, and it was purchased by company B, who basically buys A for the customer base, letting the physical plant lay dormant, it has two course of action:

It could 1) transfer the customer base onto its network, with little disruption or change in service, or 2), shut down the network, stranding customers, and offer to hook them up on their new network for an increased cost.

I hope this gets my idea across.


I think plan #2 would come back to haunt them. Customers hate being manipulated, and will go to great lengths, even at higher costs, to avoid vendors who have done so.
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