Cuban’s Pipe Dreams?

In certain circles it is quite fashionable to mock the incumbents, the bells and the cable companies, and portray them as knuckle heads. I rarely make that mistake, for underestimating them is a big folly. Like overlords they protect the caliphate with ferocity befitting a sultan, and have survival skills that are unmatched.

Today, I read Mark Cuban’s latest missive, in which he proposes that incumbents should distinguish between local and Internet bandwidth. Why haven’t the done this, he asks, after all, he theorizes that bandwidth is far cheaper on a private network than on a public network. He proposes a cheap 200 megabits up and down local bandwidth connection, and premium prices if connecting to the Internet.

Mind you, at present you can get those kind of speeds via OC3 connections that run at about 155 megabits per second, but that a pretty pricey solution, and can go for $2000 a month. Clearly, not what the Dallas Mavericks owner had in mind.

Since his proposal sounded horribly like what used to be a circuit switched network, I wondered why did we spend all that money on packet switching. Still it was quite intriguing! I ran this by a gentleman who frankly knows more about networks than either me, and most certainly Mr. Cuban. “This is the same N squared problem; need n squared connections if you want to set up a network with N people,” he replied.

I begged him to spare us the technical mumbo-jumbo and break down the possibility, not reality of what Mr. Cuban was proposing. Was this even possible? Now this is a man who is consulted by some of the top players in the broadband business. His response was that at present this is not possible. “Not even with fiber to the home; the maximum there per household is around 50 mbps. Cablevision is working on offering 50 mbps using Narad product.”

A very senior executive at a mega-billion dollar company who has experience in building these type of networks told me that DOCSIS 3.0 would make 200 megabits quite possible, but its not anytime soon, not as point-to-point connections as advocated by Mr. Cuban and will cost billions. That $5 price point simply won’t work.

For now, Mr. Cuban’s idea is just a dream …. pipe dream.


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