Charter Takes Aim At Opelika, Alabama Fiber Plan > deploy & don't look back!

reply to tmc8080

Re: deploy & don't look back!

reply to iansltx
You know what's interesting, in MDU environments, you can do FTTB and offer 100mbps/100mbps connectivity for as little as $20/mo.

Too bad nobody is really stepping up to accomplish that, and it doesn't help that the big telcos are very hesitant to do fiber builds to non-commercial buildings.

It can be done, and will eventually be done in certain markets. There are some telecommunication companies out there that are eager to build out their fiber infrastructure...

reply to FBGuy
Ahh the haters. People don't understand that what once expensive yesterday, becomes cheaper today. As technology advances, components and fiber become less of a monetary burden. In fact the more rollouts that happen drives the price lower. Doesn't anybody remember how expensive HDTV was when it first came out?

Install costs don't magically get retroactively lower.

reply to BlueC
In MDU, I totally agree; install costs in that environment are low (on the order of a few hundred bucks, if that) as long as you build the infrastructure in when the complex is created. However I'm pretty sure Opelika isn't one big MDU

In all seriousness though, I'm going to try and get into some MDUs around here once we get our fiber pipe in. Not sure what the offerings will be yet, but the pricing *might* be symmetric-for-the-price-of-asymmetric (e.g. 5/5 for $40, 10/10 for $50, 20/20 for $75). Not awesome, but better than what's available now.

reply to FBGuy

reply to iansltx

That's the thing...Verizon has economies of scale and Opelika is specifically stating that the per-install cost is over $1000...which is actually low compared with other fiber install costs I've seen.

Also, cable companies CAN touch that pricing structure. See Shaw in areas served by Novus; they'll lose money if they have to in order to wall out potential competitors, because people will buy on price and the cable companies have already amortized their infrastructure several times over.

Also, $20 per hour is a decent wage, but I wouldn't go much lower than that for fear of compromising the quality of installs. Pretty sure that's what you're going to get across the board no matter who you decide to work with, union or non-union. Okay, maybe $15 per hour...

I'm very much pro-muni-fiber, however I think it's irresponsible to make a pricing structure that ends up being a perpetual loss leader, even if it results in 100% market share. And yes, I'm saying that 100/100 for $30 per month is a loss leader ANYWHERE in the US right now, except in an MDU-only context with cheap bandwidth available.

reply to rebus9
Getting a $33M install for 27,000 residents to $1200/install, kind of assumes more than 100% take-rate (more than one resident per household), which I'm guessing won't happen. With ~9,200 households, you're looking at ~$3500 per install, assuming all residential, single family installs. At $30 of pure profit per month for service, you'd be looking at almost 10 years to break even. Then factor in paying the rest of the expenses that any business (private or government) will have, and you're looking at more than $30/mth/install, at 100% take-rate, to realistically be able to pay for the project in 10 years. Seems kind of grandiose to me.

reply to iansltx

said by iansltx:

In MDU, I totally agree; install costs in that environment are low (on the order of a few hundred bucks, if that) as long as you build the infrastructure in when the complex is created. However I'm pretty sure Opelika isn't one big MDU

In all seriousness though, I'm going to try and get into some MDUs around here once we get our fiber pipe in. Not sure what the offerings will be yet, but the pricing *might* be symmetric-for-the-price-of-asymmetric (e.g. 5/5 for $40, 10/10 for $50, 20/20 for $75). Not awesome, but better than what's available now.

reply to rebus9
sorry i forgot the /s i fixed my post lol

reply to iansltx

I believe the premise tmc8080 (?) made was that you were just selling 100/100 for $30 with no double/triple play option.

reply to openbox9
No wonder all these municipalities are going belly up.

reply to iansltx

reply to openbox9
You are forgetting about commercial businesses and renter occupied units. (Not to mention Charter starts charging government buildings $1,000+ per building per year next year for internet access, so you have a pretty enormous savings there as well depending on how many schools, police stations, etc the city has.)

reply to marigolds
Actually, you've got it backwards. The $1000 spent now could have been invested and grown to $1000+ later. The $1000 would only become worth less if you sat on it, which isn't the case because it's being borrowed.

Also, I draw the line at having taxes paying for muni broadband. Others may disagree with me on this, but I would actually vote against a muni broadband operation that was tax-financed rather than bond-financed. The infrastructure should be self-sustaining and not require a tax bailout. Nobody should be able to do predatory pricing, cross-subsidizing two completely different industries, not even a municipal government.

Let's say the bonds are ten-year at 6%. A little short and a little high for interest, but that gives us a required $12.22 per month debt payment to pay for a $1100 fiber installation. More numbers forthcoming.

I believe fiber infrastructure is amortized at 20 years, though I need to dig up my economics textbook to double-check that. So my 4.8% loan amount is pretty close to dead on for the bond payments they'd have to pay out each month.