st, and the sales, general, and administrative (SGA) cost. On top of this, you need to add some amount of net profit for the carrier. Thus, a figure of $5,000 MRC or higher per broadband customer may be the minimum sustainable figure that a carrier can charge over the long term. 8 Hence, there is a degree of disincentive on the part of carriers to offer a billing arrangement that dif- ferentiates bandwidth delivery down to the 1-Mbps level, and frankly, few user applications are sensitive to a 1-Mbps granularity. In turn, this trans- lates into a disincentive to wire a building with fiber and, consequently, into a general disincentive to deliver broadband services. Sure, if a carrier was to offer an MRC with the formula $4,800 + 25Xm, where m is the number of megabits that the customer wanted, this could be workable from the car- rier's point of view; however, the granularity may be sufficient to the levels discussed previously and not at the 1-Mbps level. Incumbent providers that also support traditional lower-speed data ser- vices beyond TLS have additional design considerations. Traditional Next-Generation SONET and Optical Architectures approaches generally do not adequately address the broad mix of tradi- tional circuit-based services. For incumbents considering PoS channels, traditional ATM, or Frame Relay, serious drawbacks in the critical areas of cost-effectiveness, scalability, manageability, survivability, and service flex- ibility quickly become apparent when compared to next-generation SONET solutions, as shown in Table 4-2. Next-generation systems provide an improved IP delivery solution. According to Nortel Networks' statistics, these systems can provide savings to the operator of up to 70 percent over Table 4-2 Packet Transport Alternatives Drawbacks/Advantages Comparing Architectural Traditional ATM More expensive Alternatives No built-in redundancy Many hard-to-manage permanent virtual cir- cuits (PVCs) required Frame Relay Limited bandwidth Many hard-to-manage PVCs required PoS channels Not sca