[kwlug-disc] UBB CRTC decision to be reviewed ...

John Van Ostrand john at netdirect.ca
Wed Feb 2 11:09:11 EST 2011

----- Original Message -----
> And that is the fallacy that lies behind the "bandwidth conservation"
> movement. Bandwidth is *not* a scarce commodity. Why? Because I can
> manufacture as much of it as I care to - so long as people are willing
> to pay the price. An example of a scare commodity are Dodo birds.
> Can't make any more(yet), sorry. Bandwidth is a product that is made
> in
> a factory. In fact, most bandwidth available today was made by Nortel
> and Lucent more than a decade ago during the Great Internet Bubble
> when
> everyone and their dog was burying fibre throughout North America.
> This
> bandwidth is being horded in an uncompetitive manner by the people
> that
> own it in order to maintain pricing power and keep control of media
> distribution in this country. Funny how these new internet usage
> limits
> follow so closely after the introduction of Netflix to Canada...
> Practical bottlenecks are purely fiction, FUD and/or uncreative
> thinking
> of people who stand to gain by not advancing past the status quo. How
> can people in Japan and Korea enjoy 100mbit+ symmetric to their homes
> if
> it is a technological impossibility? Population density? OK, so
> Kincardine doesn't get 100mbit - this does not explain why it is not
> available in downtown Toronto, Montreal or Vancouver. There are other,
> non-technological, reasons at work.
> How is it that I can send this e-mail from my desk through my Android
> phone's 3G wifi bridge at 3mbps but only upload it over a copper line
> at
> 600kbps? Answer: My phone is running 21st century tech while my DSL
> line dates to the mid-90s Copper should always beat wireless by a
> factor of 10 in performance at the same price. If it does not, someone
> is selling you stale product. Competition (and ADSL2) would fix this
> problem. Unfortunately, it is nowhere to be found.

I think there is a lot of truth to what Lori says here but there are real costs associated with delivering bandwidth.

I haven't given any spreadsheet time to looking at this, but from a business point of view there are likely lots of things that come into play:

1. Laying fibre isn't cheap from a dollars per metre perspective, and I think they have to pay for the poles they attach it to. If they are trenching it, it probably triples the cost or more.

2. Even if 100Mb is delivered to the home, think about the aggregate bandwidth. Ports and switches for that kind of throughput is very expensive. 100Mbit copper has a limited distances (100m IIRC) which means lots of switches and lots of back-haul fibre to those switches.

3. The wire that's already in the ground doesn't fit the CAT5 standard in most cases and can't be reliably used for 100Mb, so it means trenching to the home. And they wouldn't trench copper they'll trench fibre and trench it back to the subdivision entrance. and aggregate it there to bundles of fiber back to a CO, aggregate that back to nationwide backbone.

4. Planned growth is important to recoup capital costs. 

5. Then add in the obscene margins a big entity like a telco needs to have and you double or triple the costs. Keep in mind those obscene margins are because of regulatory and shareholder demands.

Of course the case must also be true that the price of Internet isn't based solely on cost. Opportunity matters too, they can keep charging for DSL and charge more for it until one of the other national carriers decides to invest billions into an infrastructure to support massive Internet speeds.

John Van Ostrand 
CTO, co-CEO 
Net Direct Inc. 
564 Weber St. N. Unit 12, Waterloo, ON N2L 5C6 
Ph: 866-883-1172 x5102 
Fx: 519-883-8533 

Linux Solutions / IBM Hardware 

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