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Why ADCo?
Ian Peon writes: "Phoenix center recently released a study (pdf or doc) addressing the 'Last Mile problem.' The paper explains why no one has yet been able to crack the cable and phone providers' local monopolies -- and offers a solution: An ADCo (Alternative Distribution Companies) business model.
SF Gate has a good article on this."
Interesting idea but not really feasible I feer. I'd love it if time-warner had a better competitor than Verizon but the govt really fucked us when they allowed the local monopolys (phone companies, power companies, etc). Now I think the thing I'd be really trying to figure out is how do we convince people that they need broadband. As with ISPs back in the day, you had to convince people that they needed, not just wanted to be on the internet. Now they need to be convinced that they need to pay $40 a month as opposed to the $17 so that AOL goes faster. I have a suspicion that this might become a losing battle, which is a shame for the technology in the long run.
can't sleep slashdot will eat me
Being able to garner a 33 percent market share sounds nearly impossible, especially if it must be done within a reasonably short period of time to satisfy financial constraints. Although /. users and other technology-minded people may be interested in switching utility providers, I don't think the average household is sufficiently frustrated with the local ILEC to bother with having a fiber optic line installed. Moreover, although fiber optic lines have been discussed as being necessary for video-on-demand and other expensive cable services, the cable companies are likely to provide the necessary lines. In short, I don't think enough people really care about their phone providers to demand such a service.
A much less costly alternative would be to install some type of wireless communications network. The company would only need to install one or two of these per square mile, and with a small receiver located in households' basements, they could get phone service, cable, and internet service. Providing phone service would in fact be easier than current cellular technology, since the houses and receivers are obviously not going to move; encription could be used on the internet links, and I don't really see any reason why providing 100 channels of cable would be all that difficult. All of this from small transmitters located atop telephone polls every thousand yards or so.
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Instead, I think they mean to run optical cable through a neighborhood, but not actually to the neighborhood. That's where the money will be, getting cable from one industrial/commercial zone to another without having to go out to the mains every time.
Why wouldn't it be possible to do a lot of the last mile plumbing using wireless? If the ADCo could get access to a suitable band (G3?) at least initially they could save a lot of the physical wireing cost and they could get to a relativbely high market saturation quickly. The basestations used could be used for mobile phones etc later.
Help fight continental drift.
One of the major problems with ADCOs is, predictably enough, running the cables. Overhead and buried cables are usually prohibitively expensive, which is why the only way the telecom/cable companies were able to afford them was with subsidies and legislated monopoly status. Therefore the companies are forced to use sewers and other undesirable underground networks to run cable. And this is where the problems begin.
The sewers in my town are extremely old and small. There are frequently "conflicts" among the carriers when installing and maintaining these cables. Rain has proven to be an issue, as have insects and other much larger creatures. Running these cables in sewers is decidedly jury-rigged and isn't going to work out as a long-term solution.
One of the ADCO companies was considering transmitting signals through water supply lines (!). They claimed that there was a significant amount of potential bandwidth in the water supply network. I am not sure if that ever came to pass.
But one thing is sure: whether it be 802.11b wireless or something else, some other technology is going to be needed to replace the sewer-and-heating-duct kind of cabling that ADCOs rely on.
df
BUT, even the SFGate article says"
"The reasons for that, boiled down, revolve around the costs involved in small telecom companies trying to do too many things all at once."
i haven't read the study in depth yet, but looking at the TOC and skimming the section heads, they seem to ignore a POLITICAL reality....
The Telcos ***DON'T WANT*** to solve the LastMileProblem.
The Telcos had, up until the construction of the fiber backbone, ARPANET and courts' decision that made telcos open the backbone up to competitors, a REALLY SWEET business model
strictly "Cost Plus, Plus" and very cozy relationships with their Fed/State regulators, many of whom were telco execs doing the "Public Service" tour of duty...which made the telco business a "name your own rates" kinda business
the more broadband deployed, the less value switched circuits have, and the more value packets acquire
the Telcos would much rather sell analog switched, retail priced voice services (where they created the business model and still control it), than...
...packet based, circuit-less (or virtual circuits, if you prefer) communications, where they cannot charge per packet and have to share their packet revenues with broadband providers...
i'm routing, uh, rooting, for the ADCOs, but, if you will recall, CLEC's were also supposed to solve at least part of the problem, and before them the RBOC's (soon to be "The RBOC or So")were going to wire the "bridge to the future"...
as a engineer geek, it sounds to me like the ADCOs can solve acutally solve the deployment of high speed fiber to the businesses and homes in the local loop (though you'll probably end up with a very limited number of very big ADCOs, economies of scale being very real)....
but, what about a business model that will allow broadband providers to survive w/o the consumer being charged "per packet" (like Docomo) or "per bandwidth" like fractional T?
Switched circuits are wasting assets, telcos and analog voice are doomed businesses,BUT...
..so far, no successful new business model has emerged to replace them
...
Ten quid, she's so easy to blind. And not a word is spoken...
Simply put, a huge amount of talent, infrastructure, and capacity on the backbone is just waiting for someone to open up the pipes and start getting massive quantities of data to consumers. Interactive TV, P2P that actually works, telepresences, etc etc, none of it can bring us out of the 1996 web until bandwidth to each dwelling increases vastly.
Posting a link to an EVIL M$ .DOCument on the Slashdot branch of the Holy Church of the Penguin? WHat is this world coming to?
--
The Cap is nigh. Time to get a fresh new account.
Or, they could simply lay a new cable and leave the old one buried.
Does anyone besides me think that making all data lines a public utility would be such a bad idea? Our roads are a public utility. Why not make our data the same?
I'm not advocating that the government-run everything. I think we all know that would be a nightmare for more reasons than one. If the government owns the cable, then there's nothing keeping different data service companies from using portions of it. This could work from the big pipes, all the way down to the last mile. On the backbones, companies would rent out X number of fibers, and Y amount of floor space wherever said fibres meet. The last mile would probably take a while longer to get set, but the same principle would suffice. Each local unit (neighborhood, apt building, etc) gets one of those metal boxes you see sitting around. The data companies just get to rent out space inside of those, to switch from the fiber to the copper that runs to your home/apartment.
No monopolies. Fair competition. And by leaving the operation to the data corps, the existing players still get to stay in the game. I'm sure someone here can come up with something, but I can find no reason why having the government own the physical layer only would be a bad thing. I realize that there is little chance that the telco lobbyists would let an Idea like this fly, but hey... I guy can dream of the perfect net access can't he?
Perhaps another approach is to look at large building projects (i.e., multiple buildings such as major office complexes and housing developments) and ensuring that they have dark fibre already installed. Once the last few hundred yards are covered to a suitable trunk then the attachment cost is minimised.
Existing buildings are another issue, but just think if at least newer projects were 'prewired'. Note that this isn't much different to the current organisation of utilities, we just say that combined cable/phone/high-speed data is just another bit of plumbing.
This is where we should be starting, if the new building projects are prewired then that reduces the problem size.
With existing buildings, there are problems that depend upon the population density and thus the number of possible subscribers. Having robots crawl around sewers or air-blowing fibre down pipes isn't a major issue. Getting the connection to the buildings is.
There are a lot of benefits to having to deal with a single company for access, but I'm still not clear how the costs can be bundled or competition effectively managed. Would the access companied share infrastructure, for example?
See my journal, I write things there
I'm not sure if they're all doing it, but in the article they mention using fiber optic cables, which would be an obvious advantage over copper. Aside from the competition aspect, I wonder if this will allow faster advancement in other areas, such as the speeds of home connections? These ADCos could allow cheaper upgrades (then again, upgrading any significant length of fiber must cost a lot in consumer terms, just for the price of the cabling).
They that quote Benjamin Franklin on liberty and safety deserve neither.
I don't think the problem is only "trying to do too much at once"; it's also "building a huge network costs a ton of money". And while there is the example of the robots stringing fiber in pre-dug tunnels, that's a VERY unique case that isn't possible elsewhere. Under normal circumstances, I'd guess that the cost of building one's own network is so high that you HAVE to provide a wide range of services because you can't build enough revenue off a single product.
I agree that doing it all on one's own is the best way to go -- MCI (and later, Sprint) are doing ok because they have their own networks and don't just sell time from AT& to their long-distance customers -- but the costs are still probably way too high to justify it anytime soon. You'd need a much higher demand for service to make it feasible.
The next problem is that in any given city block, there is NO ONE who will pay what it will cost to deliver it. Depending on the density of people who will pay for the service and the number of clues they have, you might be able to swing service for between $50 and $200 a month. If it's just one person paying, it could go as high as $1000 to $1600 a month. Solving the last mile problem is easy. Solving it affordably is what's such a pain in the ass.
I'm trying to teach myself to set people on fire with my mind... Is it hot in here?
That said, you are right, and it will be a long long time before packet switched networks carry a majority of voice traffic.
Unfortunately, as Business Week pointed out a few months ago, the telco/government apparatus simply doesn't favro change or progress and likely it will take substantial public sector wrangling to open up this market again.
It's pretty obvious that the main stumbling block is getting new connections into houses. Houses are traditionally built with two wire based connections; power and phone. In the past couple decades it's included cable, which is another market that's developing (developed?) a strong monopoly over their local domains.
Remember when cable started coming in back in the 80's? They had to send trucks down every road in every neighborhood burying a cable to get into your building.
That's obviously what these guys are doing, but doing it by loopholing themselves around regulations to cut some of the costs.
I see these "ADCo's" going through a struggling uphill climb, again, a lot like cable companies did twenty years ago. Robots and sewer lines are nice, but I think they'd be much better served to just duplicate the cable company business model instead of looking for instant gratification type solutions, because it's proven to work.
IMO, when construction companies start realizing that people need more than three wires into a house, they'll start laying fiber under neighborhoods and selling it to local companies. Now *that* would be a moneymaker; laying extra lines would be dirt cheap if you already have the ground torn up.
Well, at least someone is trying to solve the problem, but this isn't the way. Why? Because, as everyone here has pointed out, running cable is so expensive that it has to be subsidized. That's not the sort of environment where competition thrives.
The correct fix is to have a monopoly on cable distribution. One that isn't tied hip and hoof with voice/data/anything carriers. One that runs cables and manages access to the CO for all the carriers, be they ILEC or CLEC. No more games, no more favoritism.
The groundwork is there. The cable-laying portion of the ILECs has always subsidized with Universal Service Fees. We the people own a good portion of that copper and fiber! By now, anybody who hasn't figured out that the Telecommunications Act of 1996 was a failure is dead or heavily subsidized by the ILECs, so let'd go back, do it right, and rip the physical infrastructure out of the hands of the ILECs.
MS and Intel gave us enormous improvements in their products over time in order to sell us upgrades. Telcos and Cable companies, who sell you a subscription service, have substantially less incentive to improve their product. Better to charge you the same for the same old service, and keep what profits they can from the underlying semiconductor/optic cost drops.
I fear that both these players are going to stick with 1 Megabitish services for a long long time. Video that fills my screen still seems a decade away.
If telcos gave you sufficient bandwidth to the last mile, they'd lose their existing revenue model to VoIP/Microsoft.
If cable companies gave you sufficient bandwidth to the last mile, they'd lose their control over video distribution channels to the surf-anywhere web.
I think broadband will be accessible for nearly anyone who wants it, and at cheaper prices than today (i.e. $20/mo, not $50). But I'm not convinced the bandwidth is going to start going up at Moore's law rates of the underlying semiconductor/optic technology improvements. Not even close. The geographic monopolies are too strong, and the benefits of cable/telco collusion are too profitable for them to not keep us on the leash of slow improvements.
--LP
According to a heise article, 60% of German customers have access to alternative local loop providers. However, 98% are still served by GT.
Sadly, nothing much will change anytime soon. The government still holds a huge percentage of GT's stock. If their monopoly were broken, the stock would deflate like Enron's and that windfall of cash could not be spent on securing the next election by way of pork.
Getting a last mile connection laid is only part of the problem. In theory, it would be a one time issue and be finished with. The larger issue is the maintenance and operational costs that have to be paid on an ongoing basis to keep the system working.
Working out how to get the connection to the house is a technology problem, keeping the connection working is a service problem. Most people are going to be interested in buying services, not (just) technology.
without regulation we'd all still be paying AT&T two bucks a month to lease our phones.
I don't agree; without regulation, AT&T wouldn't have been a monopoly in the first place, and if they weren't a monopoly, we wouldn't have had to pay two bucks a month for phones.
Everyone thought phones needed to become a monopoly, but I'm not so sure. The successful phone companies would be the ones that had good connections to other phone companies. Without a monopoly guaranteed by law, the phone companies would have no way to lock in customers.
given regulations designed to allow ADCos to exist, how would the Baby Bells pervert such regulations to maintain their stranglehold on the phone lines in their areas?
You are right, they would try to do that. I don't have an answer either, other than "deregulate everything and let the market sort it all out."
steveha
lf(1): it's like ls(1) but sorts filenames by extension, tersely
I just get depressed when I read stuff like this.
Seriously now, is there any country in Europe that's different than the U.S. in regards to telcos, power, etc? I've thought about moving to Germany, Britain, or the Netherlands. Hell, even France, since I speak some French.
I don't want to end up in a technologically backwards country like Afghanistan, though...
Just call me a wannabe ex-patriot.
"You'll soon be stone dead."
"I'm getting better."
One thing we can say for sure, 2001 has proven that a lot of technologies we all believed were slam dunks only a year ago are looking less and less like sure things.
ABC's Monday Night Football suspended HDTV broadcasts indefinitely. DSL companies are dropping like flies. And now cable broadband is starting to waver.
Perhaps my belief in technological manifest destiny was unwarranted. Anybody want an HD monitor cheap?
Fake News Story: Welcome Back To 56k
The biggest single problem in the last mile is cost of driving a cable of any sort to your house. You have to have right of way access to the property, you have to dig a trench, you have to have junction points. The cost of the cable itself it trivial.
Right now, we have the cable companies and the telcos driving cables to your house, since they are already going that way. But there is a third possible player that hasn't yet entered the fray.
I used to live in the city, and had my electric bill on direct debit. I now live in the country, and belong to an electrical co-op. To keep the price down, they don't have routine meter readers - I have to read my own meter and report usage (and the occasionally spot-check me). As a result, direct debit is out - I cut them a check ever month.
Last month, as I was hiking out to the meter, I thought, "The electric company already has a right of way to the meter, why don't they drop a cable alongside the power line and set up a smart meter. Then, they could also offer data services, as well as variable rate metering (different costs per KWH based on time of day)".
Think about it.
1) Look at Qwest - they used to be a GAS PIPELINE company. They needed data on the pumping stations, so they ran fiber. Their CEO had vision - he made them run a lot of extra fiber.
2) Like a telco (and quite UNLIKE a cable company) the electric company understands uptime. If your cable goes down, "we'll fix it in a few days" is considered acceptable. If your phone or power goes down, a truck is rolling in minutes after the report, rain, shine, or hurricane.
3) The power companies would LOVE to be able to encourage people to spread the load to off-peak times, but they have no good way of offering the average consumer a reward for doing so. Variable rate billing would solve that problem.
4) If they had a network to read the meters, they could save money on meter readers.
I think the only reason this has not happened yet is that power company CEOs don't have the vision Qwest had.
www.eFax.com are spammers
Here is what I am thinking:
The problem of last mile is two-fold: a) The monopoly held by power/telco/cable (and possibly water co) to get wires to your house, and b) The hassles involved for a "startup", or anybody else, to get rights to bury a new cable or conduit.
I wonder if there is a way around this - it would be ugly (very, VERY ugly), but could anyone prevent it?
Imagine stringing up a neighborhood, running the wire (most likely, fiber) between buildings, but not burying it, but by running it along the fence lines, and in some cases, hanging it free from the rooftops. Maybe in some cheap PVC painted to match the neighborhood, and to protect the cable. Each house would get a cheap interface, consisting of the fiber input and output, and a 10BaseT or 100BaseT connector (to go to the rest of the house) - kinda like a switch or hub of sorts.
For most neighborhoods (especially the ones with evil HAs), this could be done and would be hidden, and thus wouldn't bring on anyone's wrath. It would be crossing property lines, but hopefully the neighbors would get along well enough to be amiable about this. Some runs would have to go under the dirt (such as where gates are), but only in a small 3 inch depth PVC run, for about 3 feet. All the connections would have to terminate somewhere - ideally, all the residents would get together and buy one house to serve as the "terminus", and for that house get a T1 dropped and set up.
Older neighborhoods would be easier, because of lack of an HA.
One could say "do it with 802.11" - but this has the main problem of major up front cost (for each house) and interference (for a variety of reasons). The solution I propose could be done cheapest if you don't go with fiber, but instead use Cat5e and 100BaseT four port switches at each house. If you didn't want to go to the expense of getting a T1, if each (or most) houses have cable or DSL, then all houses could share the bandwidth in some manner, given the proper gateway/router/firewall system with proper load sharing software.
How would I go about setting this up?
First, I would go house to house, and ask each resident if the own a computer, and whether they would enjoy broadband. Ask them if the currently have DSL or cable, or if they use dialup. Ask each of them what the maximum they would be willing to pay for broadband, if they wanted it. Ask them if they would be willing to be part of a co-op for getting broadband. If they seem willing, share the idea with them.
Once you have asked enough people, calculate amounts - and if you are given a low enough amount from the calculations, go around and distribute flyers to each house. Make it a cooperative venture, where each resident is responsible for the wire from each side of his property line to his house, the switch, and the firewall/router (cost wise). Find out which residents are capable of set up and wiring (running conduit, etc), to help those who aren't. Offer a simple single disk install of linux for the router/firewall - and point out (or offer to build) these cheap boxes (think "yellow box linux" here). Or, depending on the setup, allow your standard el-cheapon linksys router/firewalls, etc.
I am certain this can be done - as long as all the neighbors cooperate. Can anyone point out issues in my reasoning? Are there laws or regulations preventing people from getting together to do such a thing (and if so - do these laws violate any rights)? What is stopping people from doing this?
Reason is the Path to God - Anon
The old AT&T monopoly wasn't proclaimed by the government as you assume. It came in stages.
Stage 1: In 1876, Al Bell patented the telphone. He didn't actually have the working design (Elisha Gray did), but he got his patent application in earlier and had the better patent attorney. That gave him and his backers 17 years of monopoly, as with any patent. They didn't choose to license it.
Stage 2: In 1893, competition began. Al Strowger invented the dial. Bell Telephone bought the loading coil patent from Putin, increasing the range of the phone from a few miles to a few dozen. (No amplifiers yet.) So Bell had, by dint of a non-licensed patent, had another monopoly, on long distance. Independent telcos sprang up like weeds delivering local service, many with dial (which Bell didn't have until the 1920s, when Strowger's patents had run out).
In 1912, Bell, already dominant, entered into an agreement with the feds. They stopped buying up independent telephone companies, and agreed to interconnect the networks for toll calls. So the industry was formed. Bell had almost all the LD and most of the local business, but small local telcos continued to operate. Later, state regulators enshrined the monopolies into rules.
Patents gave Bell a head start. So they were able to become dominant, in a business where economy of scale matters. That's what makes it so hard to compete with them for wire: It costs money to pass houses, and if you have an 80%/20% market split, the 20% player's cost per home will be, oh, roughly four times the 80% player's, and they'll lose money.