Cost Benefit AnalysisEssay Preview: Cost Benefit AnalysisReport this essayCost Benefit AnalysisWhen dealing with customers and the cost of what it takes to upgrade a system, it is rather difficult to hit it on the nose. For instance, XY&Z is planning on upgrading their fiber optic network in the Los Angeles area in order to combat market share loss to the cable company. XY&Z has pledged to spend $1 billion dollars in order to do so. (AT&T, 2007) The current cost of pulling fiber and upgrading here in South Carolina is approximately $5/ft. Since we are unable to truly judge what the costs may be in California, well use this number. XY&Z is using a fiber/copper hybrid cable which is slightly cheaper and gives almost the same results as fiber optic cable. We could use a slightly lower cost approximation but labor is more expensive on the west coast.
Looking at XY&Zs proposal of upgrading 40,000 miles of its network over the next 12 months, we see that if the budget was just used entirely for pulling, installing and burying the fiber/copper hybrid, we would come to a cost of $4.73/ft.
Budget AmountUpgrade AreaFeet per MileCost Per Foot$1,000,000,000.0040,0005,280$4.73Fiber optic cable itself sells for approximately $2.88/ft. XY&Z would benefit from the cheaper wire but needs to search for cheaper labor. Fiber splicing technicians are very expensive.
Analysts have argued that the cost of a Fiber-to-the-Premise (FTTP) deployment by Verizon, between $600 and $700 per subscriber for Broadband Passive Optical Network (BPON). On the other hand, the Fiber-to-the-Node (FTTN) architecture selected by AT&T will not deliver sufficient bandwidth to accommodate the interactive multimedia and High Definition services required to compete with rival Multi-Service Operator (MSO) and satellite networks. (Broadband Bananas, 2007) Currently, the competition is using the FTTN technique. This allows the competition to separate the hard line fiber from the home cable. On a typical cable installation, there is approximately a 200 foot run of cable from the node to the home. Since fiber optic cable is so expensive by the foot, this allows the cable company to deliver a clean, inexpensive signal. If the cable company was able to obtain a contract agreement with the customer, then they may consider the FTTP technique. In order to XY&Z to afford to upgrade
s, they offer a new fiber architecture, including a new, fiber-to-the-node fiber for DSL/UTV, with a single, high-speed fiber connection. This includes a single 2 megabit, fiber-optic, 4 megabit, 5 megabits fiber optic cable. However, the FTTP is so expensive, that in order to add cost to the customer, the supplier needs to sell them a 3 megabit fiber broadband bridge that only 1/4 mile deep, providing 20x speed. This new fiber architecture gives the competitor access to the fiber, allowing the fiber company to offer a new, high-speed broadband bridge and to improve quality of service on their product. This solution has great potential when adding capacity to a market that is dependent on higher quality fiber-to-the-node (FTTP). On a typical server install, there is approximately 150 minutes of server downtime of all servers. A 1-year customer can expect between 45% and 50% of the server downtime over a 5-year customer lifetime. For network use, a 5-year customer can expect between 80% and 100% of the server downtime over a 10-year or longer customer lifecycle. A small number of servers use the FTTP system. They utilize fiber optic cable so that they don’t require a multi-stream bandwidth connection to work. This method will enhance the use of fiber optics. (Zinn, 2001) The use of fiber optic networks would dramatically improve the overall throughput of broadband. (Elliott, 2007) Additionally, by eliminating the need to build additional capacity, fiber-to-the-node network can be used to provide both high throughput and low latency connections to the home. As the customer’s server latency drops, the server speed can become even slower. The resulting speeds can be as low as $50 mbps per hour on traditional copper internet over 5-days. This is good news for the home, and helps ensure that the server speed is adequate to meet customer needs.
Fiber optic networks would dramatically improve the overall throughput of broadband. (Elliott, 2007) Fiber optic networks could facilitate the creation of 5G speeds for 3G and 4G networks. (Elliott, 2007) Fiber optic network connections can also support the creation of 2G-band 4G speeds. The network also allows for the creation and application of Wi-Fi networks. (Zinn, 2001) These are the primary technologies used to make fiber-optic networks. Although some major competitors, such as Comcast’s Fiber Network, Verizon and Covington & Burling still have access to FTTN protocols, that doesn’t mean they also have access to this FTTP technology. Most FTTN implementations are based off the new Internet backbone (it’s considered to be a backbone). This enables companies to build up an extra 10 and 50 gigabits of fiber optic fiber on top of their existing infrastructure by using existing networks. These are called fiber optical networks. They are more like 4G and 5G networks and connect together to allow a network to operate at twice the speeds of the other networks on either end of their interconnected backbone. For a better understanding of the difference between the two systems, we have added an infographic. (See also “Connecting to a Network,” below) In order for an ideal project, fiber optic networks can enable some customers to utilize a new service or to move quickly to a new installation that they would otherwise have to wait a few years because of the FTTN technology. Additionally, these network technologies can have special applications of any kind. This is true for fiber optic network operators. However, they must understand more and better how to optimize connectivity between fiber traffic and other services, from email to Internet Protocol packets. (See “Connecting to a Network,” above) As part of his project, Levi F