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re: Lafayette, LA may have the best ISP in the nation.....

Posted on 6/1/14 at 2:21 am to Korkstand

Posted by loopback

Member since Jul 2011

4951 posts

Posted on 6/1/14 at 2:21 am to Korkstand

quote:
This has to be one of the most ridiculous statements I have ever read. Never in my life have I heard of someone using the word "unfortunately" to describe the effects of a free market and competition

I don't understand why you don't get what I mean here. If a cable company has to intently focus all their time and effort (you think all they do is provide internet?) on building an infrastructure (at a fast pace) to provide a level of service that customers don't actually need right now, it won't have a negative impact on the business?

If a sports bar is forced to focus all of its resources (budget, focus, time) on upgrading it's TVs to 70" flat screens when only 3% of customers will actually get use out of a TV larger than 50"(which are already installed in the bar), what happens to the quality of food, level of service, menu expansion, drink quality, etc? I think it suffers.

I feel like cable companies are going to have to focus on this more than they should right now and at a faster pace. When DOCSIS 3.0 first hit the market, ISPs rushed to bring it to the customer and there were issues, lots of them. Eventually it balanced out and they got it right.

All I'm saying is, in my experience, when you are feeling the pressure and hurry to implement something there tends to be mistakes made, issues that arise, etc.

I completely agree that because of demand and free market, ISPs are going to have to get moving and this is probably the only way it would ever happen, I just wish it was to provide a service or product that people need and will use immediately.

Put yourself at the head of an ISP, it will cost you 100 million to provide fiber to the home and you will only have 15% (and that's generous) of your 300,000 customers use the service at gigabit speeds that's 45000 customers using it at a cost of 2,222 a customer. say you charge $70/mo for gigabit, you'll have to keep those 45000 customers for over 2.5 years just to recover your costs. That doesn't make much business sense.

With all that said, in the grand scheme of things, I guess it works out for the best because in time (who knows how much time though) more customers will use the service and the infrastructure will already be in place.

1 ...

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Posted by Korkstand

Member since Nov 2003

29000 posts

Posted on 6/1/14 at 11:43 am to loopback

quote:
I don't understand why you don't get what I mean here. If a cable company has to intently focus all their time and effort (you think all they do is provide internet?) on building an infrastructure (at a fast pace) to provide a level of service that customers don't actually need right now, it won't have a negative impact on the business?

"All their time and effort"? Who ever said that? And why do you think building infrastructure and offering new and faster service will have an overall negative impact on the business? If it did, nobody would be doing it, but they are. I'm sure they've done the math.

quote:
If a sports bar is forced to focus all of its resources (budget, focus, time) on upgrading it's TVs to 70" flat screens when only 3% of customers will actually get use out of a TV larger than 50"(which are already installed in the bar), what happens to the quality of food, level of service, menu expansion, drink quality, etc? I think it suffers.

There you go again with "all" the resources. And the TV analogy is bunk. Let's go with the bar's patrons want beer faster than their taps can put it out, so it would seem wise to upgrade to give them what they want.

quote:
I feel like cable companies are going to have to focus on this more than they should right now and at a faster pace. When DOCSIS 3.0 first hit the market, ISPs rushed to bring it to the customer and there were issues, lots of them.

As is the case with almost every new product and service. This is nothing new.

quote:
Eventually it balanced out and they got it right.

Whew, what a relief!

quote:
All I'm saying is, in my experience, when you are feeling the pressure and hurry to implement something there tends to be mistakes made, issues that arise, etc.

All I'm saying is, in my experience, it's better to make some mistakes than to be afraid of making them and lose customers as a result.

quote:
I completely agree that because of demand and free market, ISPs are going to have to get moving and this is probably the only way it would ever happen, I just wish it was to provide a service or product that people need and will use immediately.

People all over the world are using gigabit internet in their homes, right now.

quote:
Put yourself at the head of an ISP, it will cost you 100 million to provide fiber to the home and you will only have 15% (and that's generous) of your 300,000 customers use the service at gigabit speeds that's 45000 customers using it at a cost of 2,222 a customer. say you charge $70/mo for gigabit, you'll have to keep those 45000 customers for over 2.5 years just to recover your costs. That doesn't make much business sense.

Firstly, we have to assume that those customers are not all new, so instead of $70, we should really only use the difference between the new and old rates they were paying.. let's go with $20 as the premium for gigabit over the next lower tier. Looking at it this way, it will take over NINE years to recover the cost. But you know what? That's still about a 10% rate of return, and that's pretty damned good. And that's ignoring the fact that, over those 9 years, more and more customers will start using the gigabit service.

quote:
With all that said, in the grand scheme of things, I guess it works out for the best because in time (who knows how much time though) more customers will use the service and the infrastructure will already be in place.

Yep.