Sonic.net To Deploy Fiber To The Home
Carrier decides it's financially worth it 'to go the distance...'
by Karl Bode 08:47AM Monday Mar 22 2010 Tipped by Gbcue
Independent California ISP Sonic.net (see our user reviews
) started offering ADSL2+ service over their own network a few years ago
, offering tiers in 6Mbps, 8Mbps and 18Mbps flavors. In recent tests in their labs
, the ISP tells us the carrier was able to obtain ADSL2+ speeds of 46 Mbps downstream and 4.8Mbps upstream. Sonic CEO Dane Jasper recently stopped by our forums
to note that the carrier is now considering making the migration to fiber to the home. Over the weekend, Sonic's plans caught the eye of the Santa Rosa Press Democrat
According to Jasper, pushing deeper from the central offices requires one of two things. "We can either deploy equipment in the same location the RT is, at what's called the "serving area interconnect", or SAI," says Jasper, who notes that this gets Sonic about 6,000 feet from the home. "At that distance, with ADSL2+ we can offer single pair speeds of roughly 12Mbps downstream and up to 2Mbps upstream, so it is, give or take - about twice as good as ADSL1 equipment," he says.
But this approach is expensive, with each cabinet deployment costing $50,000, plus the cost of running fiber from the cabinet to the CO and the last-mile truck roll. "Our financial analysis leads us to the conclusion that if you're going to go that distance -- in more ways than one-- it's probably better to simply carry the fiber all the way to the customer premise and offer much more compelling services," says Jasper. "ADSL2+ is too little gain for the investment, in other words."
Jasper says that fifteen-year-old Sonic has been planning this project for about a year, and the first deployment will be a string of about 600 homes in the Sebastpol, California market (as long as local Wi-Fi opponents there
don't complain that fiber is a conduit for the devil). No prices or speeds have been announced yet, though the company plans on bundling both voice and TV service.
"Our lack of access to these new facilities is the reason that we are building our own," Jasper says -- referring to his company's inability to access next-generation FiOS or U-Verse deployments. "It will take time, but we are committed to it," says Jasper.
Necessary It's a good thing, because the future looks very dim for DSL providers.
Cable's inevitable march towards higher speeds will not stop, and DSL providers without a wireless business (in other words almost all of them) are basically going to be screwed if they don't deploy FTTH.
| |spewakR.I.P DadkinsPremiumReviews:
Elk Grove, CA
| |said by Riplin:So you have dealt with Frontier Riplin?
My god, an isp that actually gets it and isn't just interested in milking the customer anymore.
Kudos to them.
The weekend is here, grab a can of beer!
| |kapilThe Kapil
Go The Distance? I wish them the best. I wish there were more ISPs creating more, genuine competition in the marketplace. Having said that, allow me to pour cold water on your hopes and dreams...
FTTP buildout is expensive. Unless Sonic can reach incredible market penetration rates in areas they build out, this is a fool's errand.
They can't achieve the same economies of scale as a Verizon or AT&T - equipment will cost them more, marketing budgets are smaller, bandwidth costs them more while the ILECs own the backbone etc. All of this means that the cost per house connected is going to be astronomical and profit that much harder to achieve.
If Sonic is building in an area that already has other broadband options, they're screwed. They'd be competing with the ILEC, the cable company and other independent ISPs and WISPs.
Unless Jasper and company have the financial wherewithal to go the distance and live with operating losses for what could be a very long time, I don't see the point of this. They're a private company so we obviously don't see their financials....but unless they've got bags of money hiding somewhere, this is an incredibly risky move. Dane has bet his company's future on this.
Of course, the argument could be made that without such an investment, Sonic was sure to die a slow death anyway as consumers look for higher speeds that the established players would eventually get around to providing in the targeted market area if they aren't already...so this is a 'hail-mary' while they still have the financial means to pull such a move...unlike, say, Earthlink or AOL, who were only too fat and happy selling dialup until it was too late.
I could be wrong - Sonic.net could be well funded and building an area that is not scheduled to see some love by the Comcasts and AT&Ts of the world for a very long time...which could give Sonic.net enough time to get a headstart and either become the dominant player in its market or become a lucrative acquisition target. For all we know, this is just an exit strategy for the owner and other investors & stockholders of Sonic.
What we really need in this country is for the last mile infrastructure to either be publicly owned or privately owned but highly regulated like a utility company so that other competing ISPs can lease the facilities and offer service over them. The current landscape is custom-built for the duopoly clusterfuck we've got and is downright hostile to innovative upstarts and established independent ISPs.
Re: Go The Distance?
said by kapil:(insert) At reasonable rates. thought I'd add that
so that other competing ISPs can lease the facilities (insert) and offer service over them.
Well said btw.
·Time Warner Cable
Re: Go The Distance? You don't have to be a megacorp to deploy FTTH. Sonic's costs will probably be on the order of $2000 or less per home installed, less per home passed, and if you're providing TV, internet and phone service over those lines the recoup period on the investment isn't bad at all. It's not six months, but it's not ten years either.
PLENTY of fiber providers in the US are smaller than Verizon, in some cases much smaller, serving only a few thousand customers overall. Some, like SureWest, compete with both cable and DSL, and are winning.
·Time Warner Cable
| I would beg to differ. Successful fiber overbuilders (heard of SureWest?) are out there, and last I checked Sonic.net doesn't have stockholders breathing down their neck to turn a profit RIGHT NOW.|
As far as bandwidth goes, the markup of typical providers on bandwidth makes that argument moot. Additionally, Sonic.net isn't exactly in the middle of nowhere, so I wouldn't be surprised if their backbone costs are around $5-$8 per megabit, which is low enough to almost not worry about.
As for size, look at your typical small telephone company who is deploying fiber right now. They have less customers than Sonic, and in some cases are expanding to compete with both cable and ILEC DSL (that's what two telephone cooperatives in my area of Texas are doing). Of course, it helps when the incumbent telco has either given up on the area or has no plans to move past ADSL2+ for the foreseeable future. It also helps that the cable company is TWC, which means that if you offer 10 Mbps upload you're pushing twice as much as your competitor will offer for the next three years (even after the D3 upgrade).
In short, while FTTH for Sonic will definitely be an expensive enterprise, I'm betting that they'll have no problem gaining customers from other companies, as long as they're willing to amortize deployment costs over a few years. Here's hoping that they do something crazy like mirror FiOS's tiers in areas that will never see the service