[IP] more on more on RBOC vs. RBOC

[Dave Farber <dave@farber.net>]

Delivered-To: dfarber+@ux13.sp.cs.cmu.edu
Date: Mon, 19 Apr 2004 09:05:50 -0400
From: Dana Blankenhorn <danablankenhorn@mindspring.com>
Subject: Re: [IP] more on RBOC vs. RBOC
To: dave@farber.net
Reply-to: Dana Blankenhorn <dana@a-clue.com>
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Joel has a good point. But there's more basic economics at work here.

Bell infrastructure is based on 30-year depreciation schedules. So are all
the CLECs he mentions.

The way to compete against the Bells is going to be based on Moore's Law. A
network that combines Wi-Max and Wi-Fi to reach competitive fiber is using
Moore's Law. They're using equipment they can pay for, and replace, after
three years. Those CLECs Joel mentions were not. Their facilities, even if
fully utilized, would not be paid-off and replaceable after 3 years.

No matter what the Bells do they can't get away from depreciation. They have
those incumbent networks to support. All their fiber-to-the-home talk is
also based on 30-year depreciation.

I personally think 30-year depreciation is a sucker's game. And I'm
wondering when some people with capital will put their money where my mouth
is. I suspect it's already happening, quietly, under the surface. (If you
publish this note, Dave, some of that investment may well come to light,
courtesy our multi-thousand member staff of crack reporters.) And the next
few years will be very interesting as a result.

Dana Blankenhorn   danablankenhorn@mindspring.com
Progressive Strategies   Business Strategy analyst
http://www.progstrat.com http://www.corante.com/mooreslore
Get A-Clue.Com Free   http://www.a-clue.com


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