 building, amortized over 36 months for 10- and 100-Mbps Practical Design and Economic Parameters TLS and $30,000 for GbE TLS. The spur cost is $1,500 a month and the backbone ring cost is $5,000 a month. Run 2 A breakthrough technology where the CPE cost is cut 100 per- cent to $10,000 and $15,000. Here is the constant hype from vendors: "I can get you equipment that costs less " Although this certainly helps, the question remains: How much does it help? Run 3 A breakthrough technology that keeps the CPE costs as in Run 1, but doubles the number of buildings supported on the ring. (More likely than not a technology such as dense WDM [DWDM] that allows this would cost more than $20,000 to $30,000 per building; nonetheless, we give the benefit of the doubt to technology suppliers and retain the same CPE cost.) 10.4.1 Run 1: Baseline Parameters for a Typical Situation Examination of Table 10-11 shows that the sweet spot is four 100-Mbps TLS customers per building. GbE generates more money, but the safe assumption has to be that you cannot find four GbE TLS customers in a building at this time; hence, you cannot secure the sharing of the spur cost among multiple users. Figures 10-1 through 10-6 represent the information graphically. Exam- ining them will reveal where cost factors lie for next-generation carriers. Table 10-11 Financial Item Results of Run 1 Two 10-Mbps customers in a building on the backbone ring Typical total MRC/building (considers one end) $5,000 ($5,000 MRC per customer, but only $2,500 is generated at the building in question) Allocated ring cost per building/MRC (16 buildings) Allocated spur cost per building/MRC $1,500 Allocated CO equipment cost per building/MRC Allocated CPE cost per building/MRC Allocated riser costs per building/MRC Allocated network management costs per building/MRC Allocated SGA (= 18% of revenue) Allocated operations costs (= 17% of revenue) Total costs $5,872 Net profit (loss) ($872) Margin % Chapter 10 Table 10-11 Financial Item cont. Results of Run 1 Four 10-Mbps cus