As long as ATHM must lease facilities from the MSOs, they will have a hard time keeping up with the rent. Ditto for when they go wireless, dsl or satellite.
A well cap'ed buildout of their own is the only way for them to go. Perhaps the power utilities can do the pulling for them, as RCN is now having done by the local power cos in Southern California. Whereas the latter is simply buying trunking from the power co, home could contract them to bring it all the way to the side of the house, where it can be extended to the user's desktop.
The economics of rolling your own, given the cost of being able to fire up new optical bandwidth on demand, vs long term contracts keyed to today's unexpanded bandwidth pricing (see note) has proved to be overwhelmingly in favor of the facilities-based contender as opposed to those who must resort to leasing and reselling.
[Note: ...i.e., the cost modeling which only takes into accout the merits of single wavelength cost recovery (as opposed to dozens of wavelengths), which is what they are doing now in the absence of being able to demonstrate where the extra traffic is going to come from. This is where the facilities based guys are going to make a bundle as their dormant lambdas go untapped for the moment while they negotiate, to their own advantage, the higher costs which they can demostrate for the single wavelength costs. This is why companies like Above.net, GBIX, et al, have stopped leasing large pipes on a one to three year basis, and are going for short term leases, or market-weighted IRUs, or simply waiting it out in a just-in-time manner before securing additional bandwidth. And wherever possible, if they are serious enough, they have their own dark pulled.]
The latter type (those who lease and resell) are merely playing a poor's man's game of staying in the game long enough to eventually sell out, or, in fact, until they've demonstrated to the VCs that they are viable enough, and indeed could support, the freight necessary to justify rolling their own, too.
These truths apply to submarine cable channel costs, wide-area ISPing, and backboning, and last mile dynamics, all the same.
Not to kid oneself, however, rolling their own would take several years (not as long as HFC, if they only focus on FTTH w/o the frills) and they would be looking at a three year ebitda breakeven if they elected to do this. But that would be a lot better deal than the two and three, even four- year uncertainties they are now looking at. Problem is... as someone mentioned, they don't have the sovereign status that would enable them to do these things at this time. Or, do they?
If they build from scratch and do it pure, they might even get some of the MSOs, who are themselves still in a perpetual state of denial and fear (as they hoard their bandwidth potentials and cry resource shortages to all), to actually become their tenants. Wouldn't that be a switch? |
