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Nightfall
My Goal Is To Deny Yours
Premium,MVM
join:2001-08-03
Grand Rapids, MI
Reviews:
·ooma
·Comcast
·Callcentric
·Site5.com

Just a drop in the bucket

The $100 million does sound like a lot of money, but the simple fact of the matter is that the cost to bring FIOS to a home is much more expensive than that of traditional copper. The cost to terminate the fiber is still quite expensive. So much so that FIOS has to have the customer subscribing to their services for a good 3 years (with all phone, internet, and TV services) before a profit is even seen. Want to know the reason why FIOS isn't everywhere yet and why they are only in above average income areas? This is why.
--
My domain - Nightfall.net



amarryat
Verizon FiOS

join:2005-05-02
Marshfield, MA
Reviews:
·Verizon FiOS

said by Nightfall:

The cost to terminate the fiber is still quite expensive.

I know that was true 5 years ago, but is it still true? I thought the ONT's are much less expensive now. And the cable company installs a box as well, so what's the difference now?


Nightfall
My Goal Is To Deny Yours
Premium,MVM
join:2001-08-03
Grand Rapids, MI
Reviews:
·ooma
·Comcast
·Callcentric
·Site5.com

said by amarryat:

said by Nightfall:

The cost to terminate the fiber is still quite expensive.

I know that was true 5 years ago, but is it still true? I thought the ONT's are much less expensive now. And the cable company installs a box as well, so what's the difference now?

Its not really that much cheaper today. The end to end cost to terminate the fiber still is in the thousands for both ends. Which is why its important for FIOS to retain customers for 2-3 years before a profit is even seen.
--
My domain - Nightfall.net

Skippy25

join:2000-09-13
Hazelwood, MO

1 recommendation

reply to Nightfall

Please show me a comparison to the cost of when they originally ran copper to a place back several decades ago in today's dollars compared to what it cost to lay fiber today.

Regardless how that turns out, fiber is much more robust in that it is not nearly affected by the elements as copper and it has a lot more capabilities than copper.


UnnDunn
Premium
join:2005-12-21
Brooklyn, NY

1 recommendation

reply to Nightfall

said by Nightfall:

Its not really that much cheaper today. The end to end cost to terminate the fiber still is in the thousands for both ends. Which is why its important for FIOS to retain customers for 2-3 years before a profit is even seen.

Once the fiber is installed at the premises, it's there for life. It isn't just the customer who orders the installation, but also any subsequent tenants/owners of the premises who can order service.

2-3 years of service is a trivial bar to meet. Heck, I've had FiOS at my apartment for almost 3 years, and I'm moving to a new apartment that also has FiOS, where I intend to stay for at least 2-3 more years.

elefante72

join:2010-12-03
East Amherst, NY

2 recommendations

reply to Nightfall

I read Google fibre is about $600 per POP. So I would put Verizon somewhere in the $800 per POP range circa 2014. Maybe someone from Verizon can chime in, but that is what I am seeing at broadcast locations today... Fibre is actually cheaper than copper now, physically and will continue to be.

Verizon runs a hybrid IP/SONET network (PON) which isn't ideal (GF is IP (WDM-PON)), however when they started deploying MetroE was way too expensive. BPONS are pretty much tapped, and GPONs will be in 4-5 years, so upgrading the NID in a cost effective manner will be the big money decision, but ye olde fibre will outlive me in the ground. That is why Verizon charges $$$ for anything over 75, it has to recover it's costs and it wants to keep utilization down.

Trenching (putting the cable in the ground) is 75% of the cost, so if you can get 100 years out of fibre you will be saving MASSIVE amounts of money.

I'm sorry but chasing the DSL/copper bug is dead. If it's not coax of fibre, its a dinosaur in the Smithsonian.


Bengie25

join:2010-04-22
Wisconsin Rapids, WI
Reviews:
·Solarus
reply to amarryat

I stayed home when I got fiber, so I could watch the installation.

Ignoring the trenching, it took one person about 10 minutes to connect the fiber that went to my cable box to the fiber that ran to my house. Then it took another person that came later, about 10-15 minutes get the outside fiber into the house.

The majority of the time was spent drilling a hole, patching it up, figuring out where to place my ONT in the basement, and mounting a panel for my ONT.

The actual handing of the fiber the a small portion of the time spent.

The bulk of an all fiber network has nothing to do with fiber and everything to do with man-hours working trenches and stopping at the customer's dwelling unit and figuring out how to route the cables.

All of the work to lay the fiber between my curb-side cable box to installing the ONT in my basement was about 1.5 hours. The bulk of that was a mix of trenching and trying to figure out where to put the ONT.

By definition, termination of fiber is just getting the fiber ready to be connected. About the same speed as I've seen veteran network people crimp a RJ45. They had a quick little hand tool. Spin it around the jacket to strip the jacket, expose the fiber, snip it, quick change of tools, something fast, done. plug it in.

It all happened so fast.


Bengie25

join:2010-04-22
Wisconsin Rapids, WI
reply to Skippy25

Average cost for cable per house passed is around $1600 and fiber is about $1800. But you need to upgrade the cable network every few years and lots of maintenance.


Bengie25

join:2010-04-22
Wisconsin Rapids, WI
Reviews:
·Solarus
reply to Nightfall

said by Nightfall:

Its not really that much cheaper today. The end to end cost to terminate the fiber still is in the thousands for both ends. Which is why its important for FIOS to retain customers for 2-3 years before a profit is even seen.

The entire average cost for everything, including all networking gear, all fiber, all trenching, all truck-rolls to each customer's house to install, is about $1800/house, higher if your in the sticks, but only about double.

That doesn't include datacenter or trunk costs. Data center costs are cheaper through, because fiber gear uses about 10x less power and can handle about 10x-100x more connections per rack.


Nightfall
My Goal Is To Deny Yours
Premium,MVM
join:2001-08-03
Grand Rapids, MI
Reviews:
·ooma
·Comcast
·Callcentric
·Site5.com
reply to UnnDunn

said by UnnDunn:

said by Nightfall:

Its not really that much cheaper today. The end to end cost to terminate the fiber still is in the thousands for both ends. Which is why its important for FIOS to retain customers for 2-3 years before a profit is even seen.

Once the fiber is installed at the premises, it's there for life. It isn't just the customer who orders the installation, but also any subsequent tenants/owners of the premises who can order service.

2-3 years of service is a trivial bar to meet. Heck, I've had FiOS at my apartment for almost 3 years, and I'm moving to a new apartment that also has FiOS, where I intend to stay for at least 2-3 more years.

Its only trivial if the investment is made up. Otherwise, the company just sunk a couple grand into the house or apartment and got nothing out of it.
--
My domain - Nightfall.net


Nightfall
My Goal Is To Deny Yours
Premium,MVM
join:2001-08-03
Grand Rapids, MI
Reviews:
·ooma
·Comcast
·Callcentric
·Site5.com
reply to elefante72

said by elefante72:

I read Google fibre is about $600 per POP. So I would put Verizon somewhere in the $800 per POP range circa 2014. Maybe someone from Verizon can chime in, but that is what I am seeing at broadcast locations today... Fibre is actually cheaper than copper now, physically and will continue to be.

Do you have a link or source to back this up?

Back in 2011, a profitability study was done on FIOS and found it to be much more.

»www.businessweek.com/magazine/co···9606.htm

quote:
Frontier's proposed pricing moves suggest to Craig Moffett, a telecom analyst with Sanford C. Bernstein (AB), that FiOS does not turn a profit for Verizon, either. Moffett says his view is reinforced by Verizon's announcement in 2010 that it would effectively freeze its FiOS footprint. "It was a tacit admission that building new networks is a losing proposition," he says. "Frontier is saying that even operating them after they're built might not be worth it." He estimates the project will end up having cost Verizon $4,000 per connected home. Moffett calculates the present value of acquired subscribers at $3,200 each.

--
My domain - Nightfall.net


Nightfall
My Goal Is To Deny Yours
Premium,MVM
join:2001-08-03
Grand Rapids, MI
Reviews:
·ooma
·Comcast
·Callcentric
·Site5.com
reply to Bengie25

said by Bengie25:

I stayed home when I got fiber, so I could watch the installation.

Ignoring the trenching, it took one person about 10 minutes to connect the fiber that went to my cable box to the fiber that ran to my house. Then it took another person that came later, about 10-15 minutes get the outside fiber into the house.

The time invested in the installation is not the only cost. The cost of the equipment to terminate the fiber is still around $2000 for both ends. In other studies, its much more per dwelling.
--
My domain - Nightfall.net

Bengie25

join:2010-04-22
Wisconsin Rapids, WI
Reviews:
·Solarus

The entire cost of everything is about $2,000, not just the fiber. An entirely functional fiber network from scratch for about $2,000 per dwelling unit in suburbs.

Many times it's more expensive in a dense city because running fiber in a large many story old apartment building is much harder than a house or duplex.

Assuming you're in a nicely laid out city. Can double and triple in price as your get into farm land, but we're talking about 1-2 house holds per square mile, and not doing the more expensive underground installation.


jjeffeory

join:2002-12-04
USA
reply to elefante72

Verizon trenches their cable? Not from what I've seen...

I Northern Virginia in the DC suburbs, they just throw the cable in the woods and vegetation grows up around it. Comcast does the same thing. I don't know about Cox, as they're in Fairfax county and it looked to me that they were a little neater.

I went house buying there a couple of years ago, and saw this time and time again at many locations.

Therefore if trenching is 75% of the costs, then Verizon is avoiding that cost in some areas of their footprint.


sonicmerlin

join:2009-05-24
Cleveland, OH
kudos:1
reply to elefante72

GPON won't be "tapped" for eons. I don't know where you're getting that idea. That's 2.4 gbps shared amongst 32 people. Google easily offers 1 gbps over GPON. Sonys offering a 2 gbps service in japan over GPON. Verizon charges so much because they can. And XGPON is available and coming down in costs.


sonicmerlin

join:2009-05-24
Cleveland, OH
kudos:1
reply to Nightfall

The cost of $4000 is per "connected home", meaning you have to consider uptake rate. The higher the uptake rate, the lower the cost. But cost per any home, connected or not, should be in the very low 1000's.



Nightfall
My Goal Is To Deny Yours
Premium,MVM
join:2001-08-03
Grand Rapids, MI
Reviews:
·ooma
·Comcast
·Callcentric
·Site5.com

said by sonicmerlin:

The cost of $4000 is per "connected home", meaning you have to consider uptake rate. The higher the uptake rate, the lower the cost. But cost per any home, connected or not, should be in the very low 1000's.

I guess I don't understand the uptake rate that you are talking about. I will do some searching on it. Do you have a link that may explain it for me?

Also, does the uptake rate also take into account other connectivity such as copper or cable?
--
My domain - Nightfall.net

Skippy25

join:2000-09-13
Hazelwood, MO
reply to Bengie25

That is now. I am talking about back 60-100 years ago when they were deploying it to begin with.

In today's dollars, I would be willing to bet it is still about the same if not less.


sonicmerlin

join:2009-05-24
Cleveland, OH
kudos:1
reply to Nightfall

Meaning if an ISP builds out fiber to 10 homes, but only 2 of them take up the service, then their uptake rate is 1/5 or 20%. So the cost of building out fiber to ten homes is spread out to only 2 paying households. So if it cost $1000 per home, it would be $10000 for all 10 homes, divided by 2 and you get $5000 per home.



Nightfall
My Goal Is To Deny Yours
Premium,MVM
join:2001-08-03
Grand Rapids, MI
Reviews:
·ooma
·Comcast
·Callcentric
·Site5.com

said by sonicmerlin:

Meaning if an ISP builds out fiber to 10 homes, but only 2 of them take up the service, then their uptake rate is 1/5 or 20%. So the cost of building out fiber to ten homes is spread out to only 2 paying households. So if it cost $1000 per home, it would be $10000 for all 10 homes, divided by 2 and you get $5000 per home.

All signs point to FIOS not being profitable unless the customer is buying services for a period of 2.5-3 years. I hear you on the uptake rate, and it sounds plausible. At the same time though, it sounds pretty low. Even lower than FIOS estimates or the experts estimate.

So while I do agree that the uptake rate should go down depending on the amount of houses in an area that purchase the service, I don't think it goes down that much.
--
My domain - Nightfall.net