Hello Matt, please excuse the out of sequencing.
"As part of the package, aren't the MSOs providing transport from the analog headend free of charge."
Cartel members don't work for free, and they aren't forgiving. The MSOs don't do anything free of charge. Amounts owed get to them through various settlement formulae which effectively reflect a division of revenue for every subscriber served.
"Furthermore, I was under the assumption that T was providing an OC-48 backbone between major ATHM peering points."
That's an interesting point. That backbone was designed (effectively, sized and sited) to meet the footprint of the collective. What happens to this backbone's topography when players start dropping out, one by one? Yes, they can continue to use it through constant re-grooming and reconfigs. But, does it still have the same impact and make as much sense at that point, when every reconfiguration induces the trauma of a forklift?
"Doesn't this leave just the major backbone links in dispute if capacity grows considerably and exceeds their OC-48 requirements."
I think that we've covered this here in the past. Not all of the sonet capabilities inherent in those dual OC-48s are being used all the time by home. They are using most of it, but on some routes the full 5.0 Gb/s is simply not needed. It's not as monolithic as the press releases would have us believe, is what I'm saying. To be sure, no routers that I know of, anyway, can handle lookups and forwarding at 5 Gb/s at this time. Which is my way of saying that those pipes are broken down into smaller denominations that are digestable by what home has in place at this time. In all likelihood home is using what they need on thos pipes right now with options to take what they need, as needed.
Secondly, I've heard that these pipes in "certain areas" are already feeling a level of exhaust, probably closest to the core and their heaviest caching and server farms (IDCs). Which means that in some places upgrades have already commenced. But the possibility also exists that the gradual withdrawals in the future by the MSOs might offset such growth "problems." They should only have such "problems."
"Who knows what backbone capacity will cost. Look at the major backbone capacity as a result of the numerous CLECs in the biz [wcom, Williams,gblx, ixc, lvlt, qwst, abiz, elix, gst, mcld, nopt, just to mention a few]. Who is to say that all these companies, who are in the business of leasing capacity couldn't end up in a bandwidth gas war to provide the necessary capacity to ATHM. The fact that ATHM would be in the fiber biz could be disasterous for the bottom line. Why not do a good job of shopping the leases and driving the cost per bit into the dirt."
These are some of the same dynamics that Above.net faced when the vowed, more or less, to remain a non-carrier and to lease their facilities on a just-in-time basis (which is not a bad idea if you don't own the stuff outright).
Then they started to pick up a few strands of dark. They saw the advantages, and then went for indefeasible right of use (IRU) pipes from the fiber barons.
And then they were picked up by the biggest and darkest fiber baron of them all, Metromedia Fiber Networks (MFNX), an outfit I know a little bit about. None of this diluted their bottom line. Through integration with the fiber component of MFN they are actually doing better now, for some obvious and not so obvious reasons, all having to do with improved efficiencies.
And they are still the same preeminent Internet organization they were when they were leasing, only a lot bigger, and spending less per Gigabit. To boot, today they just enhanced their operation another couple of notches with another wise acquisition. See their news story.
Getting much better at otpical transport while operating more efficiently doesn't take away from any large ISP's expertise. In fact, with optics becoming what they are today, there will soon be little distinction between where the pipe begins and what's attached to it.
Ask AHhaha. He's got some ideas about optical integration with information processing and transport that will knock your socks off.
In the final analysis, and at the risk of being overdone, one must ask these simple questions:
Does @Home want to be a content shop? Or do they want to be in the business of delivering information? Do they want to be an airline caterer, or an Airline?
They can do both if they choose. So tell me, What is @Home's mission?
Regards, Frank Coluccio |
