[1st-mile-nm] Broadband to go free in 2 yrs in all of India toeveryone

Mon Apr 30 08:51:08 PDT 2007

India is an odd place. It actually is very capital-efficient -- much
more so  than China. But it has lagged on infrastructure.

This is just infrastructure, like highways and ports. But there's a catch.

VSNL has lagged in landline services, BTW, but has performed well for
a government company. That's because it is not a monopoly. Private
sector and SMALL public-sector utilities, close to their customers,
have done well in telecom. Big government outfits have not. The field
changes fast -- unlike water, sewers, highways, even electric power
transmission and generation -- and government finds it hard to adapt.
Most small networks for fiber in the US have done fine, thank you (my
magazine publishes long liusts of them). But India may have trouble
with this big an idea.

Still... it is exciting.

Steve

On 4/30/07, Carroll Cagle <carroll at cagleandassociates.com> wrote:
> I had been thinking about responding to Dewayne's post about the India
> broadband experimentation, but am glad that Andrew went first.  I understand
> Dewayne's interest, I believe, and think that many people in the U.S. are so
> unhappy with the present model that almost anything seems better.
>
> My observation covers less ground that Andrew Cohill's thoughtful analysis.
> My thought, when I first read the India report, was that, "nothing is free."
> If the government provides supposedly "free" bandwidth, someone ultimately
> is paying -- i.e., taxpayers.
>
> Having said that, it could be that a thoughtful case could be made that
> infrastructure should be a public venue, paid for by taxpayers -- probably
> not through sales or income taxes but via issuance of general obligation
> bonds.  The UTOPIA model in Utah uses a variation on this theme, using
> instead of G.O. bonds,  "revenue bonds" issued by the cities and backed by
> them but with the bonds being retired over a period of time by a percentage
> of the service fees.
>
> A legitimate concern with any public broadband venture is that government
> might not be a knowledgeable-enough, and service-oriented-enough, operator,
> in which case a public-private partnership is another variation to consider
> (public -- i.e., government -- ownership with operator being
> technology-savvy private company,  under contract).
>
> Carroll Cagle
>
> -----Original Message-----
> From: 1st-mile-nm-bounces+carroll=cagleandassociates.com at mailman.dcn.org
> [mailto:1st-mile-nm-bounces+carroll=cagleandassociates.com at mailman.dcn.org]
> On Behalf Of Andrew Cohill
> Sent: Monday, April 30, 2007 8:51 AM
> To: 1st-mile-nm at crank.dcn.davis.ca.us
> Subject: Re: [1st-mile-nm] Broadband to go free in 2 yrs in all of India
> toeveryone
>
>
> On Apr 28, 2007, at 12:27 PM, Dewayne Hendricks wrote:
>
> > [Note:  It looks like exciting things are in store for India as far
> > as broadband is concerned.  So where is this kind of bold thinking
> > here in the U.S.?  DLH]
> >
>
> It is not at all clear that "free broadband" is sustainable.  The
> longstanding problems with free services (in any market, not just
> broadband)  include market distortion and low quality service.
>
> Market distortion occurs because "free" services suggest to users of
> the service that supply is inexhaustible, and so users use as much as
> possible.  Not everyone thinks this way, but a small number of users
> who hog bandwidth can consume all available supply.
>
> This leads to low quality of service, in part because there is no
> pricing feedback to users (see above), and in part because the lack
> of revenue makes it difficult to expand capacity as demand increases.
>
> In fact, fees alone do not guarantee a sustainable business model.
> In the U.S. and most other markets, the current broadband business
> model is upside down.  Service providers enjoy maximized profits when
> customers, paying a fixed fee for Internet access, don't use the
> service at all.  Service providers make the least profit if customers
> like the service and use it a lot.
>
>  From an economic perspective, charging a fixed fee no matter how
> much bandwidth a customers uses is exactly the same as giving the
> service away for free.  Neither one provides the funds necessary to
> expand capacity, increase service areas, pay for proper maintenance
> and upkeep, and add new services.
>
> A solution is to move to a service oriented architecture (a different
> network architecture AND a different business model) that conveys a
> clearer relationship between supply and demand to customers.
> Customers pay for services, rather than buying a bucket of
> bandwidth.  Service fees are based on the real cost of providing the
> service, thus providing information to customers about supply and
> demand.  This can be done easily with both wired and wireless networks.
>
> Andrew
>
> -------------------------------------------------
> Andrew Michael Cohill, Ph.D.
> President
> Design Nine, Inc.
>
> Design Nine provides visionary broadband architecture and engineering
> services, telecommunications and broadband master planning, and
> broadband project management.
>
> Visit the Technology Futures blog for frequently updated news and
> commentary on technology issues.
>   http://www.designnine.com/news/
>
> http://www.designnine.com/
> Blacksburg, Virginia
> 540.951.4400
>
>
>
> _______________________________________________
> 1st-mile-nm mailing list
> 1st-mile-nm at mailman.dcn.org
> http://www2.dcn.org/mailman/listinfo/1st-mile-nm
>
>
> _______________________________________________
> 1st-mile-nm mailing list
> 1st-mile-nm at mailman.dcn.org
> http://www2.dcn.org/mailman/listinfo/1st-mile-nm
>

-- 
Steve Ross
201-456-5933
781-284-8810
editorsteve at gmail.com