Re: TECH: Wireless gets real

From: Mike Lorrey (
Date: Wed Jul 04 2001 - 06:35:47 MDT

Brian Atkins wrote:
> I don't see why that number is hard to believe. There are something
> like 100 million households in the US alone, how much would it cost
> to get them universal access? $1000 per household in equipment and
> labor? Actually installing fiber is more than that. But who knows, for
> wireless you might be able to make it that cheap. That's $100 billion
> dollars right there. Telecom is a sector of the economy that requires
> a lot of capital...

Sure, but how many years is that fiber good for? 10? 20? Figure how many
years of Moore's Law-like doubling of bandwidth/utility demands maxes
out the capacity of the fiber. Take that many years, divide it by 100 to
get your discount rate. Subtract inflaction from the discount rate for
your adjusted discount rate. Divide the cost by the years and then
discount each year by the adjusted discount rate amortizing the previous
years fraction.

I freaked out the upper management at Dartmouth College a few years ago
when I was helping to install their new campus wide 100 base t network.
I was installing the hookups in the President's office and chatting with
his secretary, when I casually mentioned,"Yeah, you guys won't have to
replace this system for about 10 years." which freaked her out.
"This is supposed to be good for 20 years," she said.
"Nah, you gotta account for Moore's law, see, where bandwidth doubles
every year and a half. Right now you guys have a 1 mb/sec network that's
maxed out. Double that every year and a half, and in 10 years you are at
100 mb/sec which is this new systems maximum capacity." Apparently my
employer had not either accounted for this doubling, or else had not
told the College (and apparently the college either wasn't aware of it,
or those who were aware of it were keeping their mouths shut, expecting
such info to not get out until the network was bought and installed....)

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