Facilities-based competition in Visual Studio .NET

Generation QR-Code in Visual Studio .NET Facilities-based competition
851 Facilities-based competition
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Considering capital costs only, FTTH is a decreasing cost infrastructure (Figure 810) Without consideration of operating costs, one cannot say de nitively that FTTH is a natural monopoly, but it is clear that large economies of scale and large xed costs are likely to create signi cant barriers for a second entrant From our cost models, the capital cost per home passed is about $600, and the sunk cost to serve an urban community of 16 000 is $96 million Average revenue per subscriber per month can be assumed to be about $130 (assuming that each home subscribes for voice, video and Internet services) and further assuming that direct costs are about 50 % of revenues, the gross monthly margin is about $65 per subscriber20 In order to cover plant costs and the cost of electronics for all subscribers that are being served with its net revenues (in ve years21 with an IRR of 20 %), a provider needs a penetration rate of about 35 40 % Notably, our simple calculation shows that if a 35 40 % penetration is required for pro tability, then in the long run, at most two rms can pro tably serve the same market In suburban, small town and rural areas, where the supply-side economics are even less attractive, it is dif cult to imagine that there will be more than one FTTH rm in the long run In general, therefore, facilities-based competition in FTTH seems very unlikely
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852 Competition at the optical layer
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Natural monopoly at the physical layer does not preclude competition at higher layers There are two models for how a single physical facility could support multiple competitors at the optical layer 8521 The wavelength per service provider model Multiple providers can simultaneously rent different wavelengths on a physical ber owned by a different party Each service provider could offer data, voice or broadcast video services with a data link layer technology of the provider s choice on its wavelength While the WDM PON and
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monthly margin goes towards paying back the infrastructure cost as well as meeting operations costs, though here, we assume that the entire amount goes into paying back the infrastructure cost 21 is reasonable to assume that private players expect pay-back time horizons of ve years or less and IRRs of 20 %
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Towards a Technologically and Competitively Neutral Fiber-to-the-Home (FTTH) Infrastructure
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the home run architecture support this model of competition, single-wavelength systems, like the PON and active star, do not facilitate this model of competition Implementing competition at the optical layer for a WDM PON would require each feeder ber to terminate on a port in an arrayed waveguide grating (AWG) that routes each wavelength to the appropriate service provider OLT Under this arrangement, at most two or three22 providers can be supported using CWDM, which would not require frequency-stable temperature-controlled lasers, both for the OLT and ONUs Implementing this on a home run system is unnecessary, as each dedicated ber can be connected directly to the OLT of the desired service provider 8522 The wavelength per subscriber model Each subscriber can be served on a different wavelength Given the number of wavelengths required (equal to the split ratio), this amounts to dense WDM, implying the use of expensive frequency-stable temperature-controlled lasers in both the OLT and the ONU Needless to say, the active star architecture does not support this model of competition either To implement this model of competition on a WDM PON, a wavelength router is needed, in place of the AWG, to route each wavelength to the desired service provider Each home uses a different wavelength, requiring the ONUs to support different wavelengths, creating an inventory management problem in the absence of variable wavelength lasers Note that in this context, a WDM PON closely resembles the home run architecture, in that each user s traf c is isolated on a unique wavelength The DWDM overlay in effect creates a virtual dedicated point-topoint facility over the shared PON architecture However, for the home run architecture, each subscriber s ber can be directly connected to the OLT of the desired service provider, and the use of multiple wavelengths is unnecessary DWDM overlays are economically infeasible today in the access space, and hence we close the discussion on WDM PONs and wavelength-based competition at this point
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