Monday, April 07, 2008
The Register publishes my thoughts on LLU and ADSL economics and iPlayer bandwidth consumption
For my sins I run a small UK ISP. I am exposed to the Capacity Based Charging model both from BT (via 3rd party wholesale outfit 186K) and from LLU wholesale from Tiscali so I can see some differences. Nevertheless to get traffic from to and from my ADSL clients costs me 10 times as much in cost of bandwidth as to send or receive the same packets to the rest of the world. That includes you BBC. So it costs me probably 20 times as much as it did the BBC to deliver their content. Do I blame the BBC? No I don't. Do I blame BT? you're damned right I do.
As far as I can work out the major component of this bandwidth cost is fibre backhaul from the exchanges. If BT were to sell dark fibre pairs to the LLU players this price would fall though the floor and low contention ADSL would be available to all. But BT won't sell dark fibre because they fear that their ipstream model and 20 century network could be instantly replicated with a vastly lower cost base. Someone tell me why the annual rental of 1 GB wes/les/bes circuits costs a fortune compared to 100Mbps variant (which isn't cheap). It is the same fibre just a different transceiver. If Offcom had made the same pricing model of BT's costs for installing and maintaining fibre as it did for copper pairs in 2000 when LLU started we wouldn't be in this mess now.
So BT you need to upgrade your exchange links. Oh and while you are at it, your central pipes, deliver them as Gig Ethernet not this 655Mbps ATM stuff of yesteryear. Since no one is going to buy a central pipe of that size outside of a known data centre you could make them a few hundred pounds to install instead of the tens of thousands. You could ..but you won't will you? Not until someone makes you. Sad thing is you would end up making more money not less. All those little ISP's could start buying direct from you again. Didn't ADSL competing against your valuable leased line and ISDN business in 2000 show you anything. It was a good thing.
It is the price of fibre between BT exchanges that is the barrier to the UK internet services. I think Easynet was instrumental in getting a better deal with the BES service from BT but what it really showed was that BT will do anything not to sell dark fibre.
As soon as an LLU player could bring on another neighbouring exchange using a properly IP routed mesh topology with 100 times the bandwidth for the same cost as today you would see IP Multicast working. You would see packets for geographically close communications not being tunnelled half way across the country and back. You would have local resilience. ISP's might even run BGP in every exchange with other LLU isps. The UK internet wouldn't depend on a few data centres in London. Local data centres would pop up everywhere. People are used to Latencies of between 30 and 50 ms. But imagine if that was the worst you ever got and now your local VPN traffic got there and back in under 2ms and your London vpn head end was only 5ms round trip.
Ultimately LLU is completely held to ransom by BT determining the price of getting bandwidth to the racks in the exchanges. Unbundle the fibre and all the problems melt away.