ding CPE per VLAN ring CPE per TDM ring Yearly interest for positive cash balances (one quarter hence) Yearly reduction (erosion) in capital costs Equipment Rings 2nd year 3rd year 4th year 5th year Financing arrangement: five years of capex financing with x% down 1st year 2nd year 3rd year 4th year 5th year Capex financing rate Opex costs are widely variable. Table 10-2 depicts some examples asso- ciated with services. For example, our operations number includes the allo- cated rent, power, and heating, ventilation, and air conditioning (HVAC) for the CO, which is typically a collocation facility. In addition, there may be crossconnect charges that the collocation facility may charge to the carrier. You also need to figure in your building costs, such as risers and payments to building owners. Clearly, the carrier will have network costs. For metro applications, these include the metro access rings and the spurs or laterals into the buildings (see Table 10-3). Metro core rings will also cost, typically on a par with the access rings, as long as they are in the greater proximity of the core busi- ness district. Rings reaching into the suburbs will cost significantly more. A major component of a carrier's expense is operations-related costs. Operations costs are derived in part from factors such as those shown in Table 10-4. Some item entries (such as sales salaries) will drive SGA. Practical Design and Economic Parameters Table 10-2 Common Components (per Order/Month) Assumptions for Building Costs for Orders Riser + Owner Internet at the CO and Building TDM (next-gen SONET) CWDM/WDM Private line Table 10-3 Quarterly costs Nonrecurring Facilities Costs Sub-item (3xMRC) charge (NRC) Rings $7,800 $62,000 Spurs $6,000 $5,000 TDM (next-gen SONET) Rings $7,800 $62,000 Spurs $6,000 $5,000 CWDM/WDM Rings $7,800 $62,000 Spurs $6,000 $5,000 Point-to-point $13,200 $3,600 facilities Note: Number of quarters for IRU (for example, 20, 40, or 80): 80 In order to achieve specific financial milestones, a carrier must scrupu- lou