Reviews:
 ·RoadRunner Cable
| So how does the math work on this? $5 million, about 5K residents, figure 2.5 residents per household (being conservative, makes 2K households.
$2500 per household startup costs? Wow.
And how many of these will actually pay even $50/month for broadband service? Let's be wildly optimistic and say 1/2 of them. That's 1000 households so gross revenue is $50K/month. Let's say profit is insanely high, 10%. That's $5K profit/month.
At this rate it'll take 1000 months or 80 years to make the original investment of $5 million.
Better to put your money in a 3% CD. |
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| It allows connectivity to the rest of the world so people and businesses can now locate there and function. Its not about being profitable with the status quo. |
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 cdruGo ColtsPremium,MVM
join:2003-05-14
Fort Wayne, IN
kudos:5
 ·Frontier FiOS
| reply to MyDogHsFleas
said by MyDogHsFleas:$5 million, about 5K residents, figure 2.5 residents per household (being conservative, makes 2K households. $2500 per household startup costs? Wow. ... Roads, street lights, and sewer systems don't even make a profit so I guess municipalities should put all their money into FTTH projects because obviously they make even more then those other useless services.
Your numbers are also neglecting profits from telephone and cable services that ride on the same fiber. |
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 bentand IngaPremium
join:2004-10-04
Loveland, CO
·Comcast
| reply to MyDogHsFleas
said by MyDogHsFleas:$5 million, about 5K residents, figure 2.5 residents per household (being conservative, makes 2K households. $2500 per household startup costs? Wow. And how many of these will actually pay even $50/month for broadband service? Let's be wildly optimistic and say 1/2 of them. That's 1000 households so gross revenue is $50K/month. Let's say profit is insanely high, 10%. That's $5K profit/month. At this rate it'll take 1000 months or 80 years to make the original investment of $5 million. Better to put your money in a 3% CD. Municipalities can benefit from intangibles as well, something that business can't afford to.
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»www.lp.org/issues/family-budget
"That government is best which governs least" - Thoreau |
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Reviews:
·RoadRunner Cable
| reply to cdru
said by cdru:Roads, street lights, and sewer systems don't even make a profit so I guess municipalities should put all their money into FTTH projects because obviously they make even more then those other useless services. I think this is the crux of the issue. Is broadband a common service that should be provided by the municipality, like streets and roads and streetlights, for the common good? Or is it a service that should be provided on a household-by-household basis, like electricity, trash, or telephone, where each household is expected to select their level or quantity of service, and pay the bill monthly? Should a household be allowed to "opt out" by not signing up for the service, and thus not pay for it?
To me it's pretty clear that, at least right now, broadband is a lot like phone or cable TV service, where each household is expected to sign up (or not) and pay monthly for their service. It's not at all like sewer service or roads, which you really have no option, you have to sign up and pay, either by taxes (roads) or by a mandatory addition to your sewer/water bill (wastewater charge).
Therefore.... the question of cost vs. return is a real one.
Providing a $5 million broadband service for 2000 households ($2500/potential customer) and then asking people to (optionally) sign up and pay $50 month is, to me, pretty crazy financially.
It'd be kind of like the city buying 1000 used cars for $5000 each, and then renting them to households who wanted them for $50/month. Not an exact analog because cars depreciate pretty fast, but still... this brings out the craziness of this. I would think the city could use the $5 million for much better purposes. |
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| About three years ago, the city started pursuing funding for the fiber-to-the-home network.
Mangold said from the start, the city did not want to place the cost of the project on residents.
“A large part of this whole project was putting a funding model together,” he said. “We did not want to spend any taxpayer dollars.”
The $4.9-million bond project was a joint venture between the city of Powell and the Northwest Joint Powers Board, along with private sector partners.
“We didn’t use any city money,” Mangold said. »powelltribune.com/index.php/cont···w/677/2/ |
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cdruGo ColtsPremium,MVM
join:2003-05-14
Fort Wayne, IN
kudos:5 Reviews:
·Frontier FiOS
| reply to MyDogHsFleas
I don't think it's necessarily up to the city to provide services like telephone and cable, but if the community isn't serviced by a provider currently or the level of service isn't satisfactory, then I think they should have the option to.
Many communities around the country have the essential utilities such as water and sewer provided by the city, and other communities these services are provided by separate company. Electricity use to be provided by many cities, but I think larger power companies have taken over for the most part but not entirely. Powell happens to be one of those cities that has it's own power company as well.
As koolkid1563  posted as I'm writing this, Powell didn't use any city money directly to pay for the projet. They issued a municipal bond and the bond is paid back via the city leasing out the system to TCT. TCT themselves provides the services so the city isn't in the ISP or cable tv business, they just own pipes those services use. |
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Reviews:
·RoadRunner Cable
| whatever, I'm not interested enough in this to do the digging necessary to show who, exactly, is paying for this. I think it's quite likely that the taxpayer is behind it in some fashion, even though it's not directly tax-money funded. There are lots and lots of ways for cities to creatively use money and claim it's not the taxpayer who's paying. |
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cdruGo ColtsPremium,MVM
join:2003-05-14
Fort Wayne, IN
kudos:5 Reviews:
·Frontier FiOS
| said by MyDogHsFleas:whatever, I'm not interested enough in this to do the digging necessary to show who, exactly, is paying for this. I think it's quite likely that the taxpayer is behind it in some fashion, even though it's not directly tax-money funded. There are lots and lots of ways for cities to creatively use money and claim it's not the taxpayer who's paying. Well, of course some taxpayers end up paying for it. Except they typically are referred to as customers, not taxpapyers. Thankfully for you though, what Powell does really doesn't matter as you don't live in Powell, you didn't elect those that approved the municipal bond, nor would you be paying for it even if the taxpayers were the ones responsible. Municipal bonds get issued all the time and get paid back without directly impacting the local taxpayers. Sports stadiums are an example where tourism to the area end up paying for it.
We just provided you with the information. You didn't have to even go look for it. If you just want to blow us off with a "whatever" and ignore the information that we've presented, hey, that's your prerogative. |
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| reply to bent
said by bent:Municipalities can benefit from intangibles as well, something that business can't afford to. Yeah, Intangibles aren't sitting on the books of all the companies that "overpaid" for acquisitions. Feel free to read the financials of T, VZ, Q and the cable companies, let alone any business for that matter. They are written up, but generally down, regularly.
If there were no benefits to intangibles, companies such as proctor and gamble might not exist. Advertising generally creates an intangible...one, myself, might argue that google has an inherent intangible...it is considered an asset for a reason. |
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