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Re: Customer AS

  • From: Dave Morton
  • Date: Wed Aug 21 21:03:40 1996

>| We can't pretend to be able to replace the phone networks until we can
>| achieve similar reliability. Phone networks typically are spec'ed to
>| two minutes a year downtime. 
>Uh huh, while I agree with you that the Internet is not
>remotely as stable as voice networks are, I think that 
>this has a great deal to do with the revenue difference.
>Consider that a T3, eating 690 DS0s, at 10 cents/minute/DS0,
>is worth ($52560 * 690) some thirty-six million dollars a year
>in revenue on the voice network.

Sean - not picking nits but should that not be 28 T1s i.e. 24 * 28 
giving 672 DS0s ?

Given the cost of even the cheapest voice tariff from DE to the US 
as another example I get an annual worth of 311 million dollars
for the same DS2 circuit. Given that a leased transatlantic DS3 costs 
between 6.5-7 million dollars p.a. this again reinforces your point below.


>I think you will agree that a T3 for Internet connectivity
>is not worth a very large fraction of that.
>Moreover, a backbone T3 for voice going down costs 
>(at roughly 10 cents/minute/DS0) $4000/hour in lost 
>billable revenue.
>If the money figures for Internet connectivity were anywhere
>near the figures for voice, and was billed by use in small
>increments, you would expect greater investment in reliability,
>as one sees on voice networks.
>Frankly, where there is significant competition and little
>or no loss-leading and cross-subsidy, the Internet 
>is precisely as reliable as people are willing to pay for.
>	Sean.
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