Bandwidth and costs

[Jonathan Hutchins]

A while back I saw a story about a neighborhood in Sweeden that built it's
own fiber optic 100MBPS internet service:
http://www.acc.umu.se/~tfytbk/mattgrand/

I was checking the numbers on this today, and at the $50/mo most of us pay
for broadband, the initial cost takes four years to amortize ($2000/house
initial cost + $10/Mo access fees).  Given the speed at which technology
changes, that's not a very good amortization.  I know that Time Warner's
equipment is a lot cheaper per house - they have most of the cable in place,
and they're not doing fiber in the home, but still it looks like if they're
amortizing the equipment over three years, it might not be that unreasonable
to be charghing what they are.

Not that I think the price has anything to do with such mundane concerns -
they figured out where the sweet spot lay between the highest price they
could charge and the price that would get the most people connected,
weighted toward the latter, and pretty much nailed it.  Otherwise you'd
expect a big price difference between cable and DSL since the technology is
so different.