Should Grex get a T1 connection?

Oct 25 16:13 UTC 1996

This issue was raised at the last board meeting.  It was decided that we
should have some public discussion of it.

Through the generousity of various individuals and organizations, Grex now
has a chance of being able to get a T1 network connection in the near future.
A T1 connection is much-much faster than our current connection.  It's
actually rather more than we'd have any use for just now.

We have:

 - An influential person at a local ISP who says they are willing to donate
   a connection to Grex (I understand this has market value of about $1000
   per month).

 - Two anonymous donors that have pledged to pay a significant part of the
   Ameritech fees for bringing the T1 connection from the ISP to Grex for
   the first year.

We'd still have to do more negotiations with the ISP to close the deal, but
it looks pretty promising.  We would have to find the one-time costs of the
T1 interfaces at the Grex end at least and possibly at the ISP end as well.
We need to pay Ameritech for the actual line.

The Ameritech fees work as follows (quoting from board meeting minutes):

  There is a connection fee of $587.50

    $330/month for a month-to-month contract.
    $311/month for a 12 month contract.
    $276/month for a 36 month contract.
    $250/month for a 60 month contract.

  If you need to shorten your contract, they will permit this by paying them
  back in a lump-sum the difference  over the term of the contract so far.

  They will waive the connection fee for 36 or 60 month contracts if ordered
  before 12/31/1996.

For the first year, with the aid of our donors, we could probably do any of
these.  But our donors have pledged only a year, and things could happen that
would make it impossible for them to fulfill that either.  To sustain this
in the long term, we would NEED to find more significantly more income from
more sources.  If we take a 60 month contract, and then try to back out after
two years, then we'd be hit with a bill for $1464 for the difference between
two 12-month contracts and the rate we paid at, plus possibly the $587.50
installation fee we avoided by taking the 60 month contract instead of the
12-month contract.  In other words, we'd get socked really hard.  If we get
into this, we NEED to believe we can sustain it.  Grex would be under
significant pressure to increase its income.

To actually make use of all this bandwidth, we'd need to make some further
upgrades to the Sun so that it can run fast enough.  Upgrading the Sun to a
faster CPU is going to cost us $1000 to $1200, and it's not clear that we
could both this and the T1 interface.  We have a good sum of money in the
bank now, but if our monthly costs increase by $250 a month, then we are
probably going to want to keep a larger cushion in the bank.  (Basically,
we want to always hold two or three months operating costs in the bank.)

So if we got such a connection, we might initially not be able to use it all.
We might not increase the number of telnet connections much, but the ones we
have would be faster.  Backtalk would be faster.  Local people who dial in
and want to use Grex as a cheap ISP would find Grex's faster connection much
more attractive, so our phone lines would be busy much more often, and we
would be under pressure to find money to add more.  We would have to
reconsider restrictions on GIFs on web pages and such, since the existing
rules were based on our limited bandwidth.

This would also be the first time Grex was receiving significant external
support.  In that past, we have been pretty self-contained, getting most of
our money from the people we served.  This is in some ways uncomfortable.

I've kind of emphasized the negatives here because they are a bit easier
to overlook. This would definately be a step up to the big leagues for Grex,
if we can do it.

response 2 of 146:

Oct 25 18:01 UTC 1996

What I would be concerned about, and what I think Jan was pointing to with
his significant outside help comment, wass the $1000+ per month being donated
by the ISP.  If they ever back out, Grex gets hit with the contract costs,
because we can't come close to affording that $1000+ per month.

response 4 of 146:

Oct 25 18:42 UTC 1996

   Thinkof the circuit contract this way: a T1 line is $333.00 per
month, onthe month-to-month contract.  The 36 or 60 month lease is
available at the cheaper rate, but if we bow out of it, we'll have 
to make up the difference between what we've paid, and $333 per
month.

    A 56K line would be probably around the area of $150/mo.  Which
means that its 50% (roughly) of the month-to-month price of a T1,
while providing about 1/30th the speed.

   However, the ISP we're talking to does not want to do that.
They think in terms of T1's, and thats what they want to do.

response 6 of 146:

Oct 25 19:32 UTC 1996

I think this would be great for Grex.  If Grex can afford this (or somebody
else who is willing to pay, or donate, like thie ISP in question) I see
no reason to object.  

response 8 of 146:

Oct 26 00:08 UTC 1996

The ISP in question is looking for a way to support a non-profit community
network with an in-kind contribution. The $1000 retail value of this service
appears not to be a concern. Certainly the possibility exists that they could
change their mind. How could we possibly know what the future would bring?
There is no evidence that they are insincere in offering this net-bandwidth
to us (providing we pay for the connection) on a long-term basis. 

An intermediate upgrade really doesn't make any sense so the other option that
remains is to keep the current configuration. I really could not recommend
keeping our current netlink. It is hopelessly inadequate and makes the system
very hard to use, as well as negatively impacting performance (mail, for 
example). 

Even if we decided we could not afford to upgrade the CPU too, I would favor
the T1 link. Ultimately, I think we'll be able to do both. I doubt that 
the user base will increase much in response to this, but I do think that 
more of the suffering telnetters will become members. As it will be much less
painful to use the system. People will also be able to get on and off faster.

In short, I think this is a long overdue improvement that is sorely needed.

response 10 of 146:

Oct 31 05:44 UTC 1996

It should also be noted that it's a very *special* deal.  In this case,
grex looks like a very good match for the ISP.  I am *very* definitely
in favour of this.  I think it will allow us to provide public access to
a far larger group of people than we might otherwise be able to serve.
Hopefully in that far larger group of people, we will also be able to
find more people who can afford to become members (perhaps having CPU
lag instead of network lag will be more incentive to improve the
system), but we will certainly need to keep up efforts to get more
members, a la PBS.

response 12 of 146:

Oct 31 11:11 UTC 1996

And turn grex into an ISP?

response 14 of 146:

Oct 31 15:37 UTC 1996

   I'm not in favor of asking for an agreement.  Grex has never
done that before, and we've never had problems along those lines.
Sure, we've never dealt with this kind of money before, but that
doesn't bother me--its in the same spirit as things before.

   Getting an ISDN line isn't likely either.  Again, they think
in terms of T1's.

response 16 of 146:

Oct 31 17:49 UTC 1996

Actually, they've offered 56K or T1.  ISDN is the only thing they've said they
don't do.  56K priving and T1 pricing aren't really different enough, as far
as the Ameritech cost goes, to make it an attractive alternative to a T1. 
Our current load would saturate a 56K line; it would just be somewhat less
saturated.

response 18 of 146:

Oct 31 22:05 UTC 1996

I hope no decision is made to proceed until we are very sure we can pay
the bills.  This means: 

One: we are very sure those who are generously offering to contribute are
a good risk.  Because, it is a risk when Grex signs a contract obligating
us to new expenses.  We have had folks give gifts before but never, that I
recall, have we been vulnerable to a debt load if the gift was withdrawn.
The names of the donors should be disclosed.  The only reason I don't
think a contract should be signed is that, in the event the donors
backed out for whatever reason, I can't see us trying to enforce
any such document.  So why bother.

Two: Can we afford this upgrade or are we hoping that we'll find support
once we've spent the money?  I really, really, really don't want to see
Grex get into the position where we expand without a realistic financial
plan and end up begging for funding we thought would be there.  You want
to turn off potential members one of the best techniques going is look
desperate, fragile, and broke. 

response 20 of 146:

Nov 1 11:57 UTC 1996

Grex does not need the contract, only the benefits. The donors could make the
contract to pay for the access with the benefits going to Grex as a
third-party beneficiary of the deal. Grex signs nothing. Donors get the
benefit of helping Grex, Grex gets the benefits of the help, and the provider
gets the $$. Has been done lots of times in many contexts.

response 22 of 146:

Nov 1 19:05 UTC 1996

I would like to see Grex raise a larger portion of the price of this from
pledges from other usess.  I'd much rather have 20 people pledging $10 a
month than two pledging $100.

I also think we should right *now* be talking to the ISP to try to work out
the formal details of the plan.  I think we are pretty sure we *can* do it,
though maybe not 100% sure if we want to do it or how exactly we want to
finance it.  That's a reasonable point to be at to start serious negotiations.
We can't make a final decision until all the details of the agreement are
mapped out anyway.

response 24 of 146:

Nov 1 19:33 UTC 1996

Does Grex need a CPU upgrade to support a T1?  I don't think so, as long as
we don't raise the ptys.
The advantage of a T1 is that it will take a long time to saturate it.  No
longer will we have several hardware bottlenecks, with the cpu upgrades not
showing any improvement because the link is saturated.  If we upgrade the CPU,
then we will see the improvement.  (Granted, there's still disk and memory,
as well as modems, but they're not quite as important to perceived slowness)