RE: [MLUG - DISCUSSION] AT&T tiered pricing...

["Ross, Matt" <EMAIL:PROTECTED>]

What about the cost of the subcomponents? I would think that would be
dropping as many of the subcomponents you find in an enterprise level LAN is
used in smaller LAN's.  Also, there is the simple demand curve.  If you drop
the price, companies will buy more to be able to sell more bandwidth, thus
increasing their profits, and their ability to buy even more equipment.  

> It's not getting that much cheaper. This isn't commodity PC 
> equipment. It's specialized communications equipment. It's 
> price doesn't drop like PC prices do. Most people's 
> experience in the telecommunications field involves small 
> unmanaged hubs and switches and Ethernet cards. If you look 
> into the enterprise level LAN stuff, you'll notice that the 
> cost there hasn't dropped much. 
> Lets really take a practical look at PC's and their drop in 
> cost... Sure, if any one made brand new 486's, they would be 
> dirt cheap, but who besides me would buy one? Check out the 
> cost of the new Altar's that they started making again. They 
> cost the same as the originals. Sure, processors might get 
> more powerful and cheaper, but the lasers they use to drive 
> OC's aren't. Copper isn't getting any cheaper. The technology 
> to deliver bandwidth is a niche market, and niche markets 
> don't see price drops like the general purpose commodity PC 
> market does. That's why I think the cost of the equipment 
> hasn't dropped. 
> How many GSR's do you think Cisco has sold world wide? I'd 
> bet that it's under a few hundred thousand units total. We 
> actually got our hands on a particular replacement card from 
> the Cisco Tac to do some testing. They said that it was one 
> of only two in the country that they had for replacement of 
> that particular card. with those kinds of number's volume 
> doesn't come into play like it does in consumer electronics. 
> They might still be trying to amortize the hardware and 
> software development costs. The little T1 sized routers are 
> dropping in price a lot faster, but that's a high volume market.  
> 
> Shannon Spurling
> WAN Engineer -Specialist
> 
> MOREnet, Network Services, Core Network
> 3212 LeMone Industrial Blvd.
> Columbia, MO 65201
> 
> Main:(573) 884-7200   Fax:(573)884-6673
> 
> EMAIL:PROTECTED
> EMAIL:PROTECTED
> 
> 
> 
> -----Original Message-----
> From: Mikhail Kovalenko [mailto:EMAIL:PROTECTED]
> Sent: Friday, August 02, 2002 9:33 AM
> To: EMAIL:PROTECTED
> Subject: Re: [MLUG - DISCUSSION] AT&T tiered pricing...
> 
> 
> Spurling, Shannon wrote:
> > Here's an article about AT&T and their cable modem pricing, 
> courtesy of slashdot.
> > http://news.com.com/2100-1033-947559.html?tag=fd_top
> > It's kind of interesting when you think about it. There are 
> a lot behind the bandwidth that governs the cost. It was kind 
> of silly to think that you could actually buy 10Mb for under $50.
> 
> That's interesting but *why* is the bandwidth still so 
> expensive? What drives 
> the costs besides the hardware (which should be getting 
> cheaper by the year, 
> right?)...
> 
> -- 
> MK
> 
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