BillyS - 1:00 am on Jun 23, 2006 (gmt 0)

I'm sorry, but this is just another one of those - let's throw it at the wall and see what happens tests.

Let's see...

Google has hung about 350 nodes on city light poles, and they'll serve about 70,000 people in 12 square miles, he said.

Let's see, they probably spent around $2,000 per node (on the CHEAP side) - that's $700,000 in capital.

How about ongoing O&M?

350 - T1 lines at $150 / month = $52,500 / month
NOC / Service Costs = $10,000 / month
Maint. (5% failure rate) = $3,000 / month
Depreciation (5 year equipment life) = $12,000 / month
Pole attachment fees ($10 / point / month) = $3,500 / month.

So we are talking roughly $80,000 per month and this assumes Earthlink kicks in a lot. So how many homes is this? Let's say they are passing 70,000 peeps at 4 peep per home or 17,500 homes. Let's say their saturation rate is 30%, that's roughly 5,000 users.

That works out to roughly $16 / user per month to recover their cost. Bump that up by 25% to pay Earthlink and we're talking an even $20 / month / user in revenues (at least).

Do you click on that many ads a month? If you think my numbers are way off, think about this. Cable refuses to lower their prices to beat DSL. Why? Because at $30 / month Verizon is practially giving the stuff away.

And this assumes Earthlink will set up the NOC for free, be the ISP, it doesn't include training costs...