 CylonRedPremium,MVM
join:2000-07-06
Bloom County
1 edit | reply to openbox9
Re: First place You suggested that Sonic can compete on price since their pricing right now is below AT&T - I am simply saying they can't and won't be able to in the long run or possibly even the short run. |
|
openbox9
join:2004-01-26
Alexandria, VA
kudos:2 | said by CylonRed:You suggested that Sonic can compete on price since their pricing right now is below AT&T - I am simply saying they can't and won't be able to in the long run or possibly even the short run. If they can't compete on price, then they shouldn't attempt to do so. A lot of discussions have taken place around the Internet (many in this forum) about quality of service being as important, if not more so, than cost alone. Personally, I think cost is number one for most consumers, but other competition variables do exist. |
|
CylonRedPremium,MVM
join:2000-07-06
Bloom County | I agree that cost is the most important factor for the vast majority - one reason I pay more and can run servers if I want and have such little downtime I don't remember the last time I was down. And this with 1.5/384 DSL service provided by a CLEC.
Problem is - because consumers seem to want everything for next to nothing (a pet peeve of mine) the profit margins get squeezed so much - that any new startup/ISP has to compete on price at least initially and more than likely the entire time they are in business. Only way to grow initially is offer service below cost - not unlike the loss leaders in a supermarket (soda, milk the 2 biggest ones).
Of course the problem then is - an ISP does not really have other products to sell more of unlike a supermarket and the problem lies there as eventually if they want to survive they will have to raise prices in some way. Then people whine and say "but you made money before" when they really have no idea of what they are talking about.
This is why the business is so difficult to get started in - the easy profits are no longer there because of the price squeeze. The big players (AT&T /Verizon and the 2 big cable companies) can afford to lose more money in the short run than the little ISP that just started up. The cost of entry to the market is very high - especially if any company wants to be a CLEC. |
|
openbox9
join:2004-01-26
Alexandria, VA
kudos:2 | I agree with you. said by CylonRed:problem lies there as eventually if they want to survive they will have to raise prices in some way. Then people whine and say "but you made money before" when they really have no idea of what they are talking about. The same can be said for ILECs raising wholesale prices. Some people whine and believe the ILECs are doing it to squeeze the little guy without knowing the whole story. Maybe the cost to O&M the ILEC's plant has increased, therefore requiring a cost increase for the wholesale rates. There's always more to the story than what's printed in obviously slanted "news" articles...not that some geeks around here won't understand that if they aren't getting competition from 10 different ISPs over FTTH with at least 100 Mbps synchronous, guaranteed throughput. |
|
CylonRedPremium,MVM
join:2000-07-06
Bloom County | I would bet the O&M of the centers do not rise a huge amount over time. The vast majority of the copper was paid for long ago (and then some) plus they get rent on those lines that are already paid for, by CLEC's.
I don't half doubt that the ILEC's are not trying to put the squeeze on - especially when the current FCC boss is so lenient towards ILEC's. They could very well be flexing the extra room they may get from Martin... |
|
|
|
openbox9
join:2004-01-26
Alexandria, VA
kudos:2 | I'm willing to bet that O&M is rising considering the cost of copper, fuel, labor, insurance, etc. |
|
