Didn't mean to keep you waiting. The supper bell rang just when I was getting down to post;)
In response to your msg # 3101:
No, you don't have bad information, Rich. Not if what you're referring to is Qwest adding to their geographic reach, where they do not have routes of their own. All carriers do that, or they forfeit the ability to say that they have "ubuiquitous reach." Although, the specifics surrounding who bought (or swapped) what, from whom, are often the best kept secrets in the industry.
What I was questioning was whether it makes sense for one carrier (say, Q, in this case) to lease from another (a competitor, L3, as you noted) in situations where the competitor's (L3's) routes overlaps with Q's. Possibly, I offer, because the competitor (L3) is "IP-enabled" or enabled in some other way with another set of desirable attributes, aside from pure reach.
Come to think of it, this is not such a stretch, since in a way this is what upper tier backbone providers effectively have been doing all along through peering agreements on the open 'Net.
So, I suppose one deciding criterion, among others, might be whether we're discussing leasing or otherwise utilizing a competitor's facilities for the purpose of peering on the open Internet, or for meeting the needs of private line users and PSTN/IP-telephony purposes.
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To msg # 3102:
A similar set of considerations often exists when assessing whether to lease wavelengths (or parts thereof) for relatively short terms (up to a year), or to lease entire strands and/or purchasing IRUs for up to 15 or 20 years, which must then be lighted by the acquirer. Conventional wisdom says that b-w costs will continue to plummet faster than any offsets offered by pricing elasticity, so it makes sense to continue to lease lit capacity during the shorter terms at increasingly cheaper rates. Besides, the argument continues, who could ever use all of the potential of an entire strand, anyway? So, may as well leverage someone else's misspent dollars, as the seller is left attempting to recapture something, if even only some small part of their initial investment to light their plant!
Regarding my admittedly cryptic phrase, "upside-down-flip," I meant only that in the metro we find that the economic model is turned on its head in some respects, when comparing some of its cost elements to the long haul. Take urban builds, for example, where it is far more expensive per unit of distance to trench and penetrate buildings than it is to lay fiber over prairies and highway rights of way. In metro settings you find that there is anything but a glut of glass in the streets, and there is certainly no glut of fiber brought out to the vast majority of commercial buildings. Yet. On the contrary, there is a drastic shortage of "affordable" capacity (read as: cheap optical Ethernet facilities, which are still not provided by the ILECs in an "affordable" way), in comparative terms, which accounts for what is still considered to be the last mile bottleneck.
But once fiber *is* brought into a building it is far less costly to light, because the metro link is very often unburdened by the costs associated with amplification and regeneration, and sometimes can be provisioned satisfactorily through the use of LAN-like gear, alone.
As for buying an extra year through bank loans and/or bond floats, I think that any carrier that has already seen this need as a survival measure will surely see the need for longer than a year. Along these lines, you might find the following executive summaries from the April and May 2002 issues of the Cook Report on Internet interesting:
cookreport.com
cookreport.com |
