Re: It's just CFR -- Copper Fiber and Radios vs Telecom?

[David Farber <dave () farber net>]

Begin forwarded message:

From: Bob Frankston <Bob19-0501 () bobf frankston com>
Date: February 10, 2007 11:39:22 PM EST
To: "'Russ Nelson'" <nelson () crynwr com>, dave () farber net
Subject: RE: [IP] It's just CFR -- Copper Fiber and Radios vs Telecom?

Sorry about the delayed response -- too many system problems  
distracting me.

I've thought about just paying for my own fiber from a POP -- after  
all, it's
on the order of buying a car but far more useful. Even better if you  
could
then split the cost with your neighbors. There are lots of ways to  
fund it --
where I live curbs are optional but the city will help you finance it  
and
cover some of the cost if you choose.

What I do ask is what you mean by "ISP". If you just run some fiber  
then you
should speak to the pole owners -- perhaps the gas or electric utility.
Bargaining with your competition -- the ISP is a bit strange and  
awkward.

Once you're at the POP you're a major competitor.

The real challenge is how to aggregate your buying at the POP. But as  
others
do the same thing you would peer directly and then instead of buying ISP
services you would shift as much of your traffic as you can onto dark  
fibers
and do your own routing.

Since you have no reason not to run your fibers at full capacity you  
might as
well run a bundle at a time you can greatly expand your local  
financing base.

Of course with so much capacity you can share it wirelessly with  
passersby.
Sure you're paying but for local peering and dark fiber you don't have a
clock running and if you're really using it the incremental use would be
small and once you start to get a significant number of your neighbors
joining in you get a balance so it doesn't seem as if you're giving  
something
away.

Sure, some will be happy with a few megabits of wireless connectivity  
but
they are still participants and will want more.

But once you get an ISP in the middle ...

Note that you can dispute the dynamic because many people don't see  
the value
in having such an infrastructure but I'm not serious about taking  
this all
the way -- once people get the idea that you can get gigabits without a
(local) meter running then you'll find support for the community to  
treat it
like infrastructure and get the full benefit.

Whether the city will pay and your neighbors for their initial  
investments --
well, it's not zero sum so others may get the benefit of your foresight.
Perhaps a better way to think about it is that your time has value  
and you
don't expect to be paid back for that.



-----Original Message-----
From: Russ Nelson [mailto:nelson () crynwr com]
Sent: Wednesday, February 07, 2007 02:44
To: dave () farber net
Cc: Bob Frankston
Subject: Re: [IP] It's just CFR -- Copper Fiber and Radios vs Telecom?

For IP if you wish.

David Farber forwards:
> From: Bob Frankston <Bob19-0501 () bobf frankston com>
> Ownership doesn?t mean we climb up the poles ourselves (unless we
> want to) ? it means we can hire companies to install and maintain and
> we don't to pay a monthly fee for what we already own.

Here's what I figured out the other day.  First, the problem
statement.

1) My house is where it is.  Nothing will change that.  Thus, whatever
I have to pay in terms of capital costs to get fiber to my house is
just another aspect of the capital costs of my house, like the number
of square feet, the type of siding, the number of acres, etc.

2) Businesses have trouble raising capital.  There's no magic wand;
every kind of capital has its cost, most of which is related to the
risk.  This includes ISPs.

3) My local ISP would be happy to run fiber out to my house, if they
could get sufficient return on the capital expended to cover the cost
of the capital.

Here's the solution:

4) Just as I have to have somewhere to live, I have to have Internet
access.  It's a necessity to me.  Thus, I will spend my savings, or
borrow money, to buy a house and, I propose, a fiber run from my ISP's
POP to my house.

5) I pay them their cost for running the fiber.  Obviously this is
good for them, because they get their employee's salary covered and it
increases the amount of fiber they buy which lowers the cost to them.

6) The agreement with them is structured such that they are borrowing
the money from me.  My loan to them is secured by a lein on the
fiber.  If they go under, I own the fiber, and can use it to gain
access from somebody else.

7) The agreement also specifies that they pay more than a risk-free
interest rate (this is the same rate that the US pays to borrow
money), but less than market rate (because my loan is secured by the
fiber that I want in the first place.)

8) They provide me with broadband Internet at the same rate as
everyone else in the area, but instead of paying me cash, they pay
down the loan.

9) And of course, the reason they do this is so that they can sell
Internet access to everyone else between my house and their POP.

I'm getting numbers from my local ISP soon, but the capital should be
less than that needed for a new car.

--
--my blog is at    http://blog.russnelson.com   | You can do any damn  
thing
Crynwr sells support for free software  | PGPok | you want, as long  
as you
521 Pleasant Valley Rd. | +1 315-323-1241       | don't expect  
somebody else
Potsdam, NY 13676-3213  |     Sheepdog          | to pick up the pieces.




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