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Comments on news posted 2006-05-11 12:34:43: Dane Jasper is CEO of independent DSL provider Sonic.net and President of the California ISP Association(CISPA), which represents over 140 smaller ISPs. ..
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  DerchPremium
join:2004-10-16
Cross Plains, WI | ooohhh... That mock website is scary  | |
| |  MysticGogetaThe Robot DevilPremium
join:2005-03-14
League City, TX | Re: ooohhh... Yeah creeeeepy  | |
| |  N3OGHYo Soy Col. "Bat" GuanoPremium
join:2003-11-11
Philly burbs
kudos:1 | Yeah, but good for a laugh.
We've got to be able to laugh at ourselves, people. I for one, got a chuckle out of it.... | |
|
 djrobx
join:2000-05-31
Valencia, CA
kudos:1 | Thanks Dane! Your insight into the industry always makes a fascinating read. Thanks for sharing with us.
-- Rob
--
\\ROB - a part of the SCB local network | |
|  JTRockvilleData HoPremium,MVM
join:2002-01-28
Rockville, MD | Nice Price on the "Business T" Any chance sonic.net is looking to move in to Maryland? | |
| |  DaneJasperSonic.NetPremium,VIP
join:2001-08-20
Santa Rosa, CA
kudos:7 | Re: Nice Price on the "Business T"
Sonic.net California DSL LATA Map |
Coverage for the Business T product today is California's LATA-1 (national 722), which is the greater San Francisco Bay area and Northward.
Our DSL coverage map is larger - see attached. Sorry we're not in your area! | |
| | | | | One Question: If I owned SBC, God forbid, why should I be forced to line share my DSL at rates that aren't profitable?
CLECs refuse to answer that question, period. If you are willing to answer, do so. I hate SBC/T, but have to agree with the ILECs that "sharing" lines at cost is NO benefit to them at all.
Example:
I own Rachel's Supermarket and own Atlanta's biz with a 98% market share. If the government told me, you have to lease an aisle at my stores to any competing "company" wanting to sell groceries (aisle at cost), would I comply or tell them to get lost and build your own store? I'd say the later. Even if I made 10% profit on the aisle, why still would I not say get lost and build your own store? | |
| | | |  rit56
join:2000-12-01
New York, NY | Re: One Question: corporate shill | |
| | | | | | | Re: One Question: That's no answer! | |
| | | | | | | | Re: One Question: I guess you have no understanding of what the word "wholesale" means, do you?
Oh, and what the guy above said. | |
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| | | JTRockvilleData HoPremium,MVM
join:2002-01-28
Rockville, MD | Maybe because there wouldn't even be a "store" (or in this case, communications infrastructure) if the government hadn't built it? | |
| | | | Reviews:
 ·Rapid Systems, I..
| Simple, The Government did not give your tax breaks for your sotre the government did not give you money to put your store all over atlanta.
Teleco got alot of money over the years in tax breaks and incentives to wire this country end to end. Cable had no such break or incentive hence why cable is not being force to share. Now Verizon seems to be very open minded to the whole deal of whole sale and the company that I am with now for dsl is also authorized to sell fios over there own network.
You might had a point if the government force to lease an isle out to me and I sold the same products on that isle for half of what you are sellign them for but that is not the case.
The circuit (isle in your scenario) is paid for full retail price plus 10%
My circut charge from Internet junction is almost the same as what Verizon circut charge is about 2 dollars more. But where I save money is that Ij offers business class service for a fraction of the price. 69.99 sith 5 static ips vs verizion 100.00 for 5 static plus a damn usf fee.
All the government is doing is making the telecos play fair on government paid for lines. | |
| | | | | | | Re: One Question: Yes, the government does give me tax breaks. Just like Wally World. My point is: why should they share lines they built with their own money, monopoly or no?
If you're right, why doesn't the power company have to share its lines?
The inevitable is coming: ILECs will NOT have to share its lines unless it wants to. | |
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| | | DaneJasperSonic.NetPremium,VIP
join:2001-08-20
Santa Rosa, CA
kudos:7 | This is the common myth - they're not forced to share access to lines at rates which are not profitable! In fact, while in the past ILECs have been required to provide access, THEY set the price!
It's about unbundling, basicly. If a ILEC affiliated ISP can sell consumers DSL with Internet transit, support, email boxes, a personal website, etc at $X at a profit, and if you take out everything except the use of the line, you should be able to sell at $X-$Y, also at a profit!
Let's take the railroad analogy. If there is one railroad that passes through a city, and it's owned by Southern Pacific, you can ship your goods to that city in a Southern Pacific rail car for $1000. They run the locomotive, they've got an engineer driving it, they purchased the freight car the cargo is in, etc.
Or - they can sublease the use of the track to another company, who would haul your freight using their locomotive, their engineer, etc. The cost to that other company might be to use the tracks might be less than the $1000 they'd get by delivering the cargo themselves, but they don't have many of the associated costs.
Both could be profitable for the owner of the essential facility - the rail tracks, or the phone lines.
Rail was regulated like this, a long time ago - everyone recognized that it just wouldn't be practical to have ten or twenty parallel sets of tracks running into every town, mostly idle. Instead, the company that invested in building them gets a bunch of the cash but doesn't have to run the whole end-to-end system. Airports are similar - they're an essential facility, and we don't allow one airline to own them and bar all other carriers. Ports too - they're essential facilities that by their nature must be shared.
Phone lines are the same.
-Dane | |
| | | | |  frankenfeet934 is 10-8Premium
join:2001-10-14
Smiths Grove, KY | Re: One Question: said by DaneJasper:This is the common myth - they're not forced to share access to lines at rates which are not profitable! In fact, while in the past ILECs have been required to provide access, THEY set the price! If ILECs set the price, what prevents them from pricing their competition out of the market? That is, they are forced to share the line with the competition, but decide to charge cost +50, or even 75% (forcing their competition to do the same with their customers). Their competition obviously can't compete with that business model. So at what point does the government step in, or do they even have the authority?
--
ƒ ℜ λ η κ ε ℵ ƒ € ∃ † | |
| | | | | | DaneJasperSonic.NetPremium,VIP
join:2001-08-20
Santa Rosa, CA
kudos:7 | Re: One Question: The only thing stopping them from charging an anticompetetive rate is concern for a market monopolization charge.
In fact, they used to charge more wholesale than retail, and did for a few years. Then, three California ISPs filed an antitrust case, which is still pending, and prices fell to some margin below retail.
-Dane | |
| | | | | | | | | Re: One Question: You never answered the basic question: Why should they allow you to lease their lines?
Even the Telecom Act of 1996 wanted "competition" based on line sharing of phones proviso the CLECs built their own "last mile" eventually.
The Act failed except to give the Bells LD, which is destroying the LD companies piecemail (MCI is now VZ, T is now SBC owned, Sprint is hobbling on one foot). AT&T was basically dropping out of the consumer LD market.
Covad filed bankruptcy trying to compete and its rates are a joke. Honestly, I only care about VZ's stock.
My point: if the Bells have to share, why not cable? Cable is just as monopolistic as the Bells. The Bells might still be a "monopoly" but cell phones (and now Cable VOIP) are killing them. I do think the Bells should get franchises just like Cable was required to do for TV.
You point on "unbundling": Why shouldn't their stockholders get as much profit as possible, even out of you?
Also, if you put the DSLAM in the CO, no line share is even on the table, right?
Other than FIOS, may the Bells rest in Hell.
Personally, I hope your company gets to take ALL their DSL customers (T) furthering my hope T goes down in flames. Cable is at least honest that they are overpriced. Can't say that for the Bells or the Satellite bunch. I hate T more than any other company on this earth. I even have more respect for a drug dealer than T. | |
| | | | | | | | | | Re: One Question: The (primarily) copper infrastructure going to tens of millions of homes is clearly a natural monopoly. Maybe 2 or 3 sets of infrastructure (ILEC + CableCO), but economically it certainly does not make sense to have 10 telcos dig up all the roads and lay new cables to tens of millions of homes. This is like asking trucking companies to build their own roads, and having duplicate roads in all the neighbourhoods.
Keep in mind as well that the copper telephone line infrastructure as built out over decades by the bells ina monopoly environment with a cost+ guarantee (i.e. no investment risk, the regulator guaranteed a return + profit on investment). This investment has been more than amortized by now and no new significant investment is going into the copper plant. The copper wires you get phone and DSL service from is the same copper cable laid decade(s) ago.
New investment is in DSLAMS and backhaul. The incumbents try to muddle this. "We are investing tons in DSL, so don't remove our incentives." But they are not investing in the copper plant, and the main thing CLECS and competitors want is access to the EXISTING, ALREADY AMORTIZED copper at cost+reasonable profit.
In France the regulator has been successful at LOCAL LOOP UNBUNDLING and now some of the most competitive ADSL offers in the world are there. ADSL take-up has taken off. Everyone, including the incumbent, is investing in the latest 20Mb/s+ ADSL2+ DSLAMS, in triple play offers, etc. This is what competition is about.
Monopoly or duopoly supply is not competition. The ILECS model of vertical integratition is a recipe for diaster. Already the ILECS are now pushing to extend their integrated domain to VOIP. Pretty soon they will be degrading the service of VONAGE, and making VOIP bundled offers of their own. "Why should VONAGE free ride on my network, this is killing my incentives to investm etc" We have heard all before and we are starting to hear it again.
As for the "well cable should be forced to share too then" argument, I agree. | |
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| | | | | "... why should I be forced to line share my DSL at rates that aren't profitable?"
later you say " Even if I made 10% profit on the aisle, why still would I not say get lost and build your own store?"
Clearly the question of whether it is profitable is not of any real importance to you. Even if it is profitable it won't affect your attitude. Nevertheless :
Keep in mind while rereading this that there is no reason to believe that dsl is not profitable for the bells.
" In the past, we used to buy wholesale access for about $44, when retail was $40 - that was really bad. Now, there's a tiny margin on most products, a couple percentage points - but the 6.0/768 product is actually upside-down today.
BBR: Speaking of aggressive intro offers; your reaction to AT&T's new 6Mbps 12 month deal for $30?
DJ: Our costs for this today are about $40 in payments to SBC-ASI, so there's no way to match this retail price point, particularly after you consider the cost of IP transport, support staff, general overhead, etc. I'm hoping to negotiate a lower wholesale cost."
It's difficult to believe that there is no profit when their own retail price is below wholesale price. I don't believe that their dsl service is a loss leader, so if they are able to make money on retail they are making money on wholesale. | |
| | | |  sporkmedrop the crantini and move it, sisterPremium,MVM
join:2000-07-01
Morristown, NJ
 ·Optimum Online
| said by rachelsfx:If I owned SBC, God forbid, why should I be forced to line share my DSL at rates that aren't profitable? You are confused.
--
Day dreaming days in a daydream nation | |
| | | | | | hey, 1998 called and said put down that Smashmouth CD. | |
| | | | Reviews:
·Bright House
| Lets consider for a moment that you ARE an ILEC. Why don't YOU buy your own resources to built your own backbone into the network, instead of leasing crap that others worked hard to build. This is why these companies are getting so big. Consider the fact that they all started small like everyone else, they are huge now due to proper management and knowhow. If others followed in their footsteps, they too would have success.
--
SIPPhone/Gizmo # 17476200648 / Ran by Asterisk & Slackware 10.1. | |
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| |  wifi4milezBig Russ, 1918 to 2008. Rest in Peace
join:2004-08-07
New York, NY | Re: Nice Price on the "Business T" said by DaneJasper:Glad you like that - it's a great alternative to traditional T1 and T3 products. Faster, cheaper, and built-in redundancy. How do you offer built in redundancy? Is that because you use multiple circuits to provision each "Business T"?
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Now THATS superfluous!! | |
| | | | DaneJasperSonic.NetPremium,VIP
join:2001-08-20
Santa Rosa, CA
kudos:7 | Re: Nice Price on the "Business T" Yes, that's correct. For example, Business T at 24Mbps/3.0Mbps is built on four 6.0Mbps/768kbps circuits, so if one was to go offline, the circuit would run at 75% speed until repair was completed.
This product comes with a very strong service level agreement, 24x7 support, a four hour time to respond, financial penalties for us in case of outage, etc - just like the T1 and T3 products we sell.
-Dane | |
| | | | | wifi4milezBig Russ, 1918 to 2008. Rest in Peace
join:2004-08-07
New York, NY | Re: Nice Price on the "Business T" said by DaneJasper:Yes, that's correct. For example, Business T at 24Mbps/3.0Mbps is built on four 6.0Mbps/768kbps circuits, so if one was to go offline, the circuit would run at 75% speed until repair was completed. This product comes with a very strong service level agreement, 24x7 support, a four hour time to respond, financial penalties for us in case of outage, etc - just like the T1 and T3 products we sell. -Dane Thats pretty cool. Do you provide the same SLA on these "Business T's" as you do your regular T1's? Also, do you bond the circuits on both your end and the customer side, or how is that aspect accomplished?
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Now THATS superfluous!! | |
| | | | | | DaneJasperSonic.NetPremium,VIP
join:2001-08-20
Santa Rosa, CA
kudos:7 | Re: Nice Price on the "Business T" said by wifi4milez:Thats pretty cool. Do you provide the same SLA on these "Business T's" as you do your regular T1's? Also, do you bond the circuits on both your end and the customer side, or how is that aspect accomplished? Yes, the circuits are bonded with per-packet loan balancing in the CPE at the customer side, and in our network, to deliver the full speed - 24Mbps in the fastest product offering.
T1s are actually 24 channels at 64kbps - these are the voice channels in the traditional T1 circuit. A T1 CPE merges all of these together into a circuit that's roughly 1.5Mbps. What we're doing is similar.
-Dane | |
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sporkmedrop the crantini and move it, sisterPremium,MVM
join:2000-07-01
Morristown, NJ Reviews:
·Optimum Online
| Wholesale Pricing? DJ: The FCC should not set aside essential facilities for the exclusive use of a single company. In all cases, the company which buried the wires should get a return on it's investment, and it should sell wholesale access to that essential facility to others. If one of those is an affiliated ISP, all the better - but there's no legitimate claim that there's a downside in wholesale access.
That is so true. I've noticed that many folks talk about CLECs and ISPs always getting a "free ride on a network they don't own" on this forum.
Can you go into some more detail on wholesale prices to you (roughly) vs. wholesale prices for a small ISP vs. ATT retail?
And on another note, how accomodating is ATT in getting you access to an ordering system, ticketing system, etc.? I briefly dealt with Verizon east in the early days of wholesale and it was an absolute mess (on purpose?).
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Day dreaming days in a daydream nation | |
| | | | | | How is it "competing" when you do not own the lines that the service is provided on??
End franchise agreements, open the market to real competition, lay your own lines, you bum. The lines are not owned by the state, they are held by a private company. Stealing is stealing no matter how you try to word it. Franchising at the local level is the problem, it is nothing more than a state controlled monopoly, thanks to the leftist......... | |
|
Reviews:
 ·AT&T U-Verse
| Monopoly I agree on the Monopoly part. I live near Houston, less than 30 minutes away, and living in that big of city you'd think I'd be able to get at least SOME kind of broadband right? Nope. All I can get is Dialup/ISDN, technology more than 20 years old. Where as my nextdoor neighboors can get ONE form and ONLY one form of broadband, Road Runner.
I'm not quite sure why Broadband ISPs continue to compete a little bit in areas where they're the only company that offers Broadband, except for their own reputation maybe, when they could be expanding their area instead. | |
|  ARPremium,ExMod 2001-04
join:2000-09-21
Toronto, ON | Nice interview! Hey Dane, I've been with Omsoft for over 5 years now but I gotta say, when I heard about the $12 promo from SBC, I had to check with them if I could qualify. I didn't and so I stayed with Omsoft.
How will you compete with SBC on the pricing for the customer who only wants always-on, no frills (that is, doesn't care static vs PPPoE, newsgroups etc) kind of customer? | |
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See 8 replies to this post | |
kd6caeP2p Shouldn't Be A Crime
join:2001-08-27
Palmdale, CA Reviews:
 ·Vitelity VOIP
·AT&T U-Verse
| how does line pricing work? If I may ask, how exactly is the price for a given DSL circuit set? I ask this because, as an example, Verizon online to my knowledge does not even offer even to it's business customers here on the west coast anyway, their highest plan of up to 7.1Mbps/768KBPS. Yet LaBridge, a local ISP that sells DSL over Verizon lines, offers 7.1/768 for $199 a month.
Even more interesting, is the fact that my current DSL provider, DSL extreme, offers the same 7.1MBPS/768KBPS package for just $99.95 plus tax. How could Verizon, not offer their highest tier on their own lines, yet 2 independent ISP's are offering the exact same Verizon package at drastically different prices? It makes no sense. | |
|  veloslaveGeek For GodPremium
join:2003-07-11
Pleasant Hill, CA | Informative Great article...
SONIC ROCKS!!! | |
| | DaneJasperSonic.NetPremium,VIP
join:2001-08-20
Santa Rosa, CA
kudos:7 | Re: Informative said by veloslave:Great article... SONIC ROCKS!!! Thanks mucho!
-Dane | |
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| | Smaller ILECs Dane,
How come you guys don't partner with the smaller ILECs (i.e. Frontier Communications). Are they not held to the same competitive rules as the larger ILEC? It seems my area ( Elk Grove) has NO alternative to Frontier as the service provider other than Comcast cable modem. | |
| | DaneJasperSonic.NetPremium,VIP
join:2001-08-20
Santa Rosa, CA
kudos:7 | Re: Smaller ILECs said by curious123 :
Dane,
How come you guys don't partner with the smaller ILECs (i.e. Frontier Communications). Are they not held to the same competitive rules as the larger ILEC? It seems my area ( Elk Grove) has NO alternative to Frontier as the service provider other than Comcast cable modem.
Generally speaking, the smaller ILEC would rather totally lock out competitors, and own the whole enchilada. This way, they can set prices and product speeds and such, without any outside pressure.
-Dane | |
| | | | | Re: Smaller ILECs I know they would rather have a complete monopoly. Is Sonic not available in these areas by Sonic's choice or is the smaller ILEC locking you out of their network? | |
| | | | DaneJasperSonic.NetPremium,VIP
join:2001-08-20
Santa Rosa, CA
kudos:7 | Re: Smaller ILECs said by curious123 :
I know they would rather have a complete monopoly. Is Sonic not available in these areas by Sonic's choice or is the smaller ILEC locking you out of their network?
At this point, they certainly could lock everyone out. However, I think it's a more practical matter, it's probably just not cost effective to fight that battle for such a small prize. In other words, if you're going to try to buy services from an ILEC, it would be more effective to pick one with a huge footprint rather than a little island.
-Dane | |
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