A new Silicon Valley startup by the name of Necto received ample hype this week after a profile piece by Business Insider highlighted the company's goal of letting consumers build their own ISP. Leaning on the recent death of net neutrality as potential user motivation, the company's website states that the company's focus is in enabling entrepreneurs to build their own small local broadband networks, handling customer acquisition and marketing while Necto handles network engineering, monitoring, troubleshooting and billing.
The service leans on fixed wireless connectivity, with Necto primarily marketing the idea to building owners and managers or contractors.
"Starting an ISP has gotten way cheaper, but there is still some investment required to get started," the company's website proclaims. "You’ll need to have access to (or be able to raise within a month of acceptance) at least $25,000 to cover your initial infrastructure hardware, business setup, and startup expenses."
But the startup insists that broadband remains a great business for entrepreneurs to be in.
“Running an ISP is a great business,” the company states. “You have highly recurring revenue, low variable & fixed costs, and a low capital expenditure requirement from using next generation distribution gear. The exact numbers will depend on your specific circumstances and unique advantages (access to potential customers, competitive landscape, etc.)."
Historically smaller ISPs in this country have seen more heartache than success, thanks in large part to regulatory capture and potent anti-competitive lobbying from Comcast, AT&T, Verizon, Charter, and CenturyLink. And while $25,000 is steep for some, it's significant less money than were a local entrepreneur try to build their entire ISP from scratch.
"That's the problem we're seeing, there's not enough individual last mile networks delivering broadband to individual homes," Necto co-founder Ben Huang told Business Insider. "Comcast, AT&T, they have all the power because they own the last-mile networks -- that last piece between wholesale and the individual is controlled by the large telecom incumbents. We want to increase the infrastructure that can service this last mile network."