The costs for the cabling portion of the horizontal network are relatively easy to calculate since they are based on published labour and material charges. In the determination of the per kilometre cost of the trunk duct network, it has been assumed that there is only one coaxial cable kilometre per duct kilometre; that is, that there is only one cable per duct. This was the basis for the cost apportionment for the duct network. However, in actual practice, there are often two or more cables within each kilometre of duct. This is partially due to the use of the technique of "tromboning". Since an amplifier may be installed within a building instead of within the street, a cable may come off of the trunk network, enter a building, and then come out of the building after being strengthened by the amplifier within a building. In this example, the duct from the street to the building will contain two coaxial cables. addition, since it is less expensive to use an existing duct than building a new duct, HKT may choose to use less than optimum routings, which may require two or more coaxial cables in one duct, rather than building new duct. BAH has estimated the proportion of cable kilometres to duct kilometres is close to two. The additional apportioned cost of the duct due to this doubling of cable usage is taken into account in the calculations of the horizontal network.
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The cost for the electronics is more difficult to estimate because it is difficult to determine the number of each electronic component in a "typical" kilometre. For instance, the number of trunk amplifiers in a kilometre will in part depend on the number of homes passed in that kilometre as well as the number of passive taps off that kilometre of cable. In addition, the network topology chosen by the cable operator will also affect the number of line extenders and splitters, and the addition of standby power to a network will also affect the cost as well as the number of power supplies chosen. As a final complication, neither HKT or HCV has finalized the type of equipment which it would use in the network; this would only be done after award of the franchise and a competitive tendering process.
4.1.4 Vertical network
In the assessment of the technical aspects of each of the cable proposals, BAH has determined that there are no substantive differences in terms of the cost of provision of the vertical network, the portion of the network which goes from the duct in the street to the customer premises. It has been BAH's experience that the cost savings of a particular technology in the vertical component is in a large part offset by cost penalties in the horizontal network. As an example, fewer amplifiers, or less powerful amplifiers can be installed in the horizontal network, but that would require more amplifiers in the vertical component.
The cost of the vertical network includes two variable components, a cost per home passed and a cost per home connected. The cost per home passed is in turn made up of two parts, the cost of bringing cable from the main distribution frame in the building to each of the floors of the building and the cost of the electronics needed for that cabling. Together these costs are approximately HK$310 per home passed. The cost per home connected, incurred only when a customer requests service, consists of the cost of the additional cable needed to reach the customer, the cost
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