I've always wondered how one would disrupt the ISP market. Can you only enter this market with huge capital expenditures to build out a network? Are there ancillary networks/pipelines/bandwidth that could be utilized that are not explored?
It seems like Google is going down the road with using huge capital but are there other ways? Republic Wireless is the only other "similar" product to disrupt the telecom market.
You'd need an immense amount of capital for the network, but also for the legal guerrilla war. Laying fiber to the last mile? What about the risk to the current lines? You get a lawsuit and an injunction while you fight it in court and prepare your impact study that demonstrates that digging a ditch on one side of the road won't cut fiber on the other, and in the meantime who knows how long has passed, probably years.
You probably have to get the city on your side for eminent domain for purchase or at the very least easement rights on a tiny strip of land everywhere so that you can lay cable, and of course that's going to take time, and there's going to be a fair amount of "grassroots" opposition (no one ever comes to municipal/community meetings, you can sway it pretty easily), and so you make your case about how it's going to benefit and bring jobs and bring X to Y group and all the while you aren't actually delivering internet and you're not sure when you'll be able to. In the meantime the existing players can build out in the town you're trying to move into and make the speeds you were promising pointless anyway.
tl;dr: Local government is easily gummed up, you have to compete in many places at once to be a real threat.
Tacoma's click! network has been giving City of Tacoma residents high speed internet for around 10 years. Seattle's about to join with their own high speed internet offering.
I'm starting to think that ISPs should be government-regulated utilities just like electricity, water, sewer, etc. Isn't that how those industries were disrupted -- through regulation?
I see you're point with govt regulated utilities but some governments have de-regulated such as Texas with electricity. I'm thinking there might be a good hybrid solution.
It's called structural separation, and was the reason why we had so many $20/month ISPs back in the days of 28.8k modems.
The infrastructure business -- for electricity, water, information networks, and other similar services -- are high-capital cost very long term investments that typically require some degree of government intervention in terms of rights of use. There's no reasonable way to provide independent supply systems if your goal is 100% coverage, and the government must be allowed to dictate things like "this road can be dug up to install pipes" and "this edge must be allowed to hold wire poles" and so forth. If you want an efficient implementation, you have one big infrastructure system that all the suppliers share.
The trouble usually comes when an entity gets to both maintain the infrastructure and supply services on it. That's bad. Now they have an incentive to provide better service for their customers and worse to everyone else's. For example, if you allow an ILEC (telco owning local wire systems) to provide DSL service but require them to rent space in their local wiring centers to their competitors, you will discover that the competitors' service requests are answered more slowly, accidentally ignored more often, and generally deprioritized if not actually sabotaged.
The best thing a municipality, county, or state government can do to foster a robust network environment is to establish an infrastructure provider and regulate them as the monopoly that they are, forbidding them to provide the services on top of the infrastructure. Then you can get healthy competition in those services.
In some countries the government has split the ownership of the pipes and the providing of Internet service into separate concerns.
So one company charges ISPs for using the pipes and then ISPs pass that cost on to the consumer. This means the cost of entry is significantly lower for an ISP.
> Can you only enter this market with huge capital expenditures to build out a network?
It certainly feels that way. Though I believe there is some chance for bootstrapping, even starting out with an entire apartment signed on would still be difficult. Though it may be enough to spark investor interest.
> Republic Wireless is the only other "similar" product to disrupt the telecom market.
While what they're doing is neat, they're just using someone else's network (Clear) and essentially shuffling expenses around. It's not low-level physical disruption where we need it.
I think that's a good start. I'm willing to bet low-level disruption could be realized using the existing infrastructure. A one cost, low-monthly rate for ISP and VoIP such as Sonic.net?
I'm not aware of any rules that force cable providers to resell their infrastructure (like Google is doing willing with their fiber). I think, at least at one point, DSL providers had to allow competition using their lines. Sonic.net for a while (and still does to my knowledge) resold DSL and eventually started binding two DSL lines together to increase speeds. They had to pay a hefty amount of their revenue for that customer directly to Ma bell though. For whatever reason, AT&T is not forced to resell their UVerse(VDSL) system. Which maxes out at 24Mbps anyway and thus is already a disappointment for competition. So unfortunately, I'm not seeing any opportunities for disruption with existing infrastructure, at least in the states.
The problem with wireless is mainly physics: at the higher frequencies that could be used for high-throughput links, you have problems with water. Basically, the signal attenuates very quickly in water (by heating it, which is how a microwave oven works), and so things like plants, fog, rain, etc. all cause problems. Trying to deliver wireless service to homes is going to be expensive -- you're going to be setting up a lot of APs in strategic locations that have line-of-sight to your nearest base station.
It's not impossible, just hard. You also have to deal with airspace e.g. if someone decides to put up a new building right through one of your beams, you need to somehow get around that building, which could be hard. The only people I know of who are doing wireless broadband are doing it in very rural areas, where they can follow the electrical lines, which have nice, clear paths through the forests. Their biggest problem is regulations -- they cannot put up towers because of rules about visual appearance.
It seems like Google is going down the road with using huge capital but are there other ways? Republic Wireless is the only other "similar" product to disrupt the telecom market.