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 ·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. | |
|  | | Re: So how does the math work on this? 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. | |
|  cdruGo ColtsPremium,MVM
join:2003-05-14
Fort Wayne, IN
kudos:5
 ·Frontier FiOS
| 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. | |
| | Reviews:
·RoadRunner Cable
| Re: So how does the math work on this? 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. | |
| | | | | Re: So how does the math work on this? 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/ | |
| | | | | | | Reviews:
·RoadRunner Cable
| Re: So how does the math work on this? 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. | |
| | | | | cdruGo ColtsPremium,MVM
join:2003-05-14
Fort Wayne, IN
kudos:5 Reviews:
·Frontier FiOS
| Re: So how does the math work on this? 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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 bentand IngaPremium
join:2004-10-04
Loveland, CO
·Comcast
| 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 | |
| | | | Re: So how does the math work on this? 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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