Here is an excerpt from my upcoming backhaul report, it may interest you. It’s part of the technology analysis I am putting together from the consulting that I do with TechFecta.
Soon to be on sale in PDF format, tell me what you think.
To cover the obvious thing, Fiber can be very expensive to install. Why? Let me count the ways.
- Trenching – if you must trench, fiber becomes very expensive, and not just for the labor to do it. The labor is not the most expensive part unless you’re going under pavements or concrete. Even then they came up with boring techniques to go under many obstacles. The thing that causes delays in trenching is the permitting process. Almost all cities and towns have a process to file for permits, for a fee, and have the right to tell you now or they may have a dig once policy. More on that later.
- Overhead – you would think that mounting on an overhead pole would be quick and easy. It is from an installation standpoint. Again, installation is not why it’s so expensive or takes a long time to get done. In fact, when you get to the installation phase, it moves along quickly. There are several things here that slow the process. Again, permitting has to be done, and it takes time for approvals and to get the permits. However, the real issue with the poles is ownership of the pole. Who owns it and who will allow you to be on it. You see, many cable companies have been on these poles for years. The city or the utility company may own the pole, but an incumbent on the pole may have put in their lease that they can deny future competitors access to the poles. If you don’t think this happens. It happened to Google Fiber repeatedly. It happened in Nashville, a city they so desperately wanted Google Fiber, but AT&T and Comcast did all that they could to keep Google off any of its poles, with lawsuits and lease restrictions. I have the link below in the resources area for this section. The local government thought they could overrule the agreements that AT&T and Comcast had on the poles, but the local ruling was overturned in US District Court. AT&T and Comcast banned Google from using their poles.
This is what costs money and time. While most companies can work with the local government, not all governments will help speed things up. All the same, it costs money to get through the process. I don’t blame the local governments. It is a money-maker for them but they need to regulate how things are done so that it makes sense and looks aesthetically pleasing. The government needs to have control in some way, I just wish they could do it faster.
This is what I mentioned in the installation section. If the competition has the rights to the poles and they can deny anyone to using them, what can you do? You find another way to get in. The incumbent has a lot of power with local governments. Comcast is a very powerful and rich company.
How can the competition hurt you? Let me count the ways:
- Ban you from using their local poles.
- Influence local government to make it harder for newcomers to deploy and permit.
- Lower their prices to drive the newcomers’ costs down.
- Upgrade their system to force newcomers to come in strong.
- Lock up local contractors to raise costs for the newbies.
I hope you enjoyed it, I will put out a wireless report soon.
Be smart, be safe, and pay attention!
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