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Technology Stocks : The *NEW* Frank Coluccio Technology Forum -- Ignore unavailable to you. Want to Upgrade?

To: Frank A. Coluccio who wrote (15620)	6/24/2006 8:52:39 AM
From: Sun Tzu	Read Replies (1) \| Respond to of 46821

RE VoIP: Recently, software has been developed to analyze packets in real-time and tell if it is voice or not. Telcos are already using it in some countries to block VoIP. But in America, the first amendment prevents them from doing so. Which is why they are pushing for multi-tier systems. RE Pricing Model: The existing model of paying for how much BW you use is rational enough imo. To tie the pricing to the content as oppose to BW usage would only benefit the telcos at a huge cost to everyone else. RE Marginal Costs: I agree with you that mistaking marginal and aggregate costs is a common mistake. I'm not sure comparing the last mile with other miles is the right analogy. Rather hauling one cable versus say ten between cities could be a better analogy. Most of the cost is for digging the ground and setting up the equipment. Whether or not you lay in 1 or 10 fibre has little effect on the over all cost. BUT, it does have huge effect on the revenue side, if you could make use of all the fibre you buried. In theory, the rational pricing model would be to charge a higher price for the set up and the first chunk of BW fallowed by increasingly cheaper pricing for the additional BW i.e. you match your revenue structure according to your cost structure. How big of a "set up" fee and how fast the drop in marginal BW prices depends directly on the demand. Ironically, the higher the demand (to a point) the lower the set up fees and the flatter the BW pricing. Due to the glut of fibre hauled during the dot-bomb era, dark fibre is very cheap. Google has been buying up a lot of dark fibre and nobody knows why. One possibility is that they have been preparing for a war with telcos, should the multi-tier system go through. The combination of Wi-Fi/WiMax and fibre can make them a worthy adversary of the telcos. ST