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freejazz_RdJ

join:2009-03-10
kudos:1
reply to KC7

Re: Options for those with FTTH

said by KC7:

mlerner got a point, if there is only one cable going into your building, then in order to provide competition, someone must mandate Indie ISP.

Remember it is all about business model and providing a competitive environment so business could thrive.

But there is no exclusivity per se. There is only marketing exclusivity in MDUs and early access to utility trenches from the builder. If it were profitable to serve the customers given those agreements, there would be more than 1 wire. But sometimes, it just isn't worth it.

InvalidError

join:2008-02-03
kudos:5

said by freejazz_RdJ:

If it were profitable to serve the customers given those agreements, there would be more than 1 wire. But sometimes, it just isn't worth it.

It usually is profitable... but having one wire get 100% subscribers in half the new divisions while another incumbent gets 100% of subscribers in the other half of divisions is more profitable than both incumbents only having 50% of subscription with 100% coverage... need only half as much infrastructure for the same amount of potential revenue in the exclusive 50% coverage scenario.

freejazz_RdJ

join:2009-03-10
kudos:1

But it can be very bad NPV over the first several years when there is an exclusive trench and marketing agreement with a builder. Not only do you have higher build costs to go in after construction is finished, but you don't have the first mover advantage and no day-1 ability to offer services. Couple that with a marketing offer that includes 1yr of service with the purchase of the home, you will get $0 revenue for at least a year in that area and your competitor with have supra-normal attach rates for years thereafter. That is why these 1-wire areas exist. The economics are bad in the short term (0-3yr).