It must have been 4 a.m. this morning when I read that Cringley piece on the Gilder board and my first impulse was to send off an email to the author over his UWB assertions and several other points he made. I chose the pillow instead.
Yes, there are some profitable dsl providers. Some that come to mind are a number of independent co-ops and some smaller ILECs' edge-outs that we've discussed here in the past. What does the latter say about the need to reach a very large scale before being able to attain break even? It tells me that the markups used in the charge-back schemes between departments of the larger players must be egregiously lost to reality, demonstrating what happens when the weight of bureaucracy becomes unsustainable in a competitive environment. In fact, the story I posted here recently about Ruby Ranch's dsl deployment where "Qwest, had no intention of providing it to the remote community." This example, alone, profoundly demonstrates just the opposite, when it comes to the need for a very-large scale break-even justification:
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Getting back to the independent telcos who are "edging out" (ergo, edge-outs) into adjacent RBOC territories as facilities-based overbuilders, where the Bell refused to provide service, if you recall, we see the same thing occurring as that of Ruby Ranch. But in the latter case they are leveraging their parent companies' OSS/ billing/ NMS/ OAM/ infrastructure and who at the same time, due to the financial health of those same parents, were able to get 20 year financing for a song, not to mention the knowledge base and experience they brought to bear to the task. These are all advantages that startup CLECs/DLECs had to foot from scratch, or went without, as they clawed their way to bandruptcy.
Not unlike, I should add, the kinds of burdens that would befall a muni, further lending credence to the structured separation model we've discussed where the muni _or_ private_ overbuilder, such as a non-municipally-affiliated power or gas company, would provide the outside plant layer, while allowing service providers to rent/lease/share raw optical capacity and compete for services at the upper layers.
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Overall, Cringley's piece served his purposes well, given the crowd that he addresses, but it was more one of commiseration than of insight, and rather shallow in parts where he 'was' correct. He may well have a better true grasp, but he doesn't show it all in that piece.
The UWB point he made makes my point, if what he meant by that was that it would substitute "on its own" for any of the alternative first mile technologies that were discussed.
As you know, I've often gone to the Peter Ecclesine well with this one, hoping in fact that he would report a glimmer that it might prove in at some point in a hybrid fiber/wireless scheme, but all indications are that regulatory issues will keep it confined to a ~10 meter radius for some time to come due to fears over interference to radar, etc. Making it a possible alternative to bluetooth or close-proximity point solutions where 802.11x might otherwise suffice. But not as a first/last mile alternative anytime soon. |
