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TABLE 2 Additional Investment Needed to Carry Additional Traffic (millions of dollars)

 

+4 TB/day

+12 TB/day

+28 TB/day

+60 TB/day

Government Model

34

67

123

199

NII Model

250

378

518

669

As Table 2 shows, additional traffic can be carried through the same wire centers that serve the government with little additional investment. Additional capital is needed to expand toward a fuller NII infrastructure that would require 5 times as many wire centers to be covered as are covered in the government network. However, the government network would still provide a significant jumping off point for the complete network. For example, an NII network serving all wire centers at 8 TB/day would require an investment of $410 million in equipment ($160M for the first 4 TB/day through the government wire centers plus $250M for the additional 4 TB/day through the remaining wire centers). The government network would have already caused 40 percent of that investment to be made.

The largest portion of the investment and monthly costs is in the access areas of the network, the portion that is normally provided by LECs. This reinforces the point made above in this paper that the shared network concept must be extended all the way to the user. It also points out the need for uniform standards for interfaces and switching in all regions (a minimum requirement for any open data network).

Conclusions

Three major conclusions can be drawn from the analysis presented above:

The infrastructure costs of a National Data Network show a marked economy-of-scale effect at the volumes represented by the federal government data communications traffic.

Significant economy-of-scale benefits can be achieved by aggregating agency requirements onto a common network.

The infrastructure created to support federal government requirements can significantly reduce the cost of extending service to larger communities in the public interest.

The savings resulting from the NDN approach are substantial enough to justify the complexities of an aggregated procurement (coordination of requirements, security, standards). Such a procurement would have to be carefully structured to harness the competitive forces necessary to motivate both local and interexchange carriers to pass on the cost savings shown above through lower prices. The end result would be a quantum step forward for the government and the country on the road to the information technology future.

Notes

1. Computer Science and Telecommunications Board, National Research Council. 1994. Realizing the Information Future: The Internet and Beyond. National Academy Press, Washington, D.C.

2. Computer Science and Telecommunications Board, National Research Council. 1994. Realizing the Information Future: The Internet and Beyond. National Academy Press, Washington, D.C.



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