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Fiber isn't very profitable either. There is a reason why AT&T and Verizon have so little interest in building it out. They could spend a bunch of money buildi

Fiber isn't very profitable either. There is a reason why AT&T and Verizon have so little interest in building it out. They could spend a bunch of money building it and then the local cable co will just offer a lower speed, but still very useable, for less money. And almost everyone takes that deal. Verizon Fios is struggling to get 40% of the potential subscribers to actually sign up. That means 60%+ of people are willingly using comcast or time warner over Fios. Very few people are willing to upgrade their internet connection beyond whats needed for basic internet service.

shmerl 11y ago
> Fiber isn't very profitable either. There is a reason why AT&T and Verizon have so little interest in building it out. It is profitable (Verizon is steadily making money on fiber network, unlike their copper one). Fiber optic network maintenance is just significantly cheaper as Verizon admitted multiple times. The trick also is long term perspective. With common TV gradually dying out, more and more people switch to Internet video. Which means that owners of extensive networks won't lose business - they'll only get more. So investing in better networks is a good investment. But it's long term. And most these telco execs can't think long term anymore. Previous Verizon CEO was from the their landline division, and he invested in fiber all the way. But once he was replaced with wireless execs, things changed for the worse. > Very few people are willing to upgrade their internet connection beyond whats needed for basic internet service. If someone offered those people something comparable to Google Fiber, they would switch. Verizon can do it. They just don't want to.
- rhino369 11y ago
  >The trick also is long term perspective. With common TV gradually dying out, more and more people switch to Internet video. Which means that owners of extensive networks won't lose business - they'll only get more. So investing in better networks is a good investment. I see it exactly the opposite. Fios was built with the assumption that you can not only sell internet, but also TV service for another 30-60 dollars of revenue. With tv service going over the internet, the ISPs are going to have a hell of a time getting that much revenue back. They can try and charge for usage (like comcast) but it's going to hard. This is why Verizon fought like hell to avoid net neutrality. They wanted options for trying to skim off the top of tv service. So Fios might be making modest profits now, it probably won't be in 5-10 years.
  - shmerl 11y ago
    > With tv service going over the internet, the ISPs are going to have a hell of a time getting that much revenue back. Even if it won't be that much, with pure Internet they'll make enough profit, since Internet usage will only grow. And you don't need caps for it. Some resort to caps simply to rip people off, it has nothing to do with recovering expenses. Also, gutting TV they'll avoid paying retransmission fees and such. > So Fios might be making modest profits now, it probably won't be in 5-10 years. I expect the opposite.
    - rayiner 11y ago
      > Also, gutting TV they'll avoid paying retransmission fees and such. TV brings in way more revenue than the content costs. If you look at a cable co like charter, which doesn't have its own content arm, they'd be deeply in the red if they got rid of TV revenues even accounting for the decrease in programming expenses.
      - deleted 11y ago
        [deleted]
      - shmerl 11y ago
        > TV brings in way more revenue than the content costs. It does, but it doesn't mean that Internet service alone can't be profitable. One has to improve the network however. No one likes overpriced and capped low bandwidth connection.
        rayiner 11y ago
        Improving a network costs money. Are people willing to pay enough money for a faster, TV-less network to justify that investment? Nobody in the industry operating at scale is showing that in their economics. People don't want wired Internet without TV, or at least not enough to pay very much for it. People in the HN bubble don't really get that. I live in a building where I've got a rock-solid 50/20 FiOS connection with amazing pings that never goes down. But in Baltimore Verizon doesn't have a cable license, so it's just Internet (which is fine, because I'm a cord-cutter). I also have the option of Comcast, which struggles with Netflix during prime-time, for twice as much money. When I first got FiOS installed, the installer was surprised to find out that the ONT on my floor wasn't even configured, because none of the ~50 units on that floor had ever subscribed to FiOS. Everyone subscribes to Comcast, because they want TV.

shmerl 11y ago

> Fiber isn't very profitable either. There is a reason why AT&T and Verizon have so little interest in building it out. It is profitable (Verizon is steadily making money on fiber network, unlike their copper one). Fiber optic network maintenance is just significantly cheaper as Verizon admitted multiple times. The trick also is long term perspective. With common TV gradually dying out, more and more people switch to Internet video. Which means that owners of extensive networks won't lose business - they'll only get more. So investing in better networks is a good investment. But it's long term. And most these telco execs can't think long term anymore. Previous Verizon CEO was from the their landline division, and he invested in fiber all the way. But once he was replaced with wireless execs, things changed for the worse. > Very few people are willing to upgrade their internet connection beyond whats needed for basic internet service. If someone offered those people something comparable to Google Fiber, they would switch. Verizon can do it. They just don't want to.

rhino369 11y ago
>The trick also is long term perspective. With common TV gradually dying out, more and more people switch to Internet video. Which means that owners of extensive networks won't lose business - they'll only get more. So investing in better networks is a good investment. I see it exactly the opposite. Fios was built with the assumption that you can not only sell internet, but also TV service for another 30-60 dollars of revenue. With tv service going over the internet, the ISPs are going to have a hell of a time getting that much revenue back. They can try and charge for usage (like comcast) but it's going to hard. This is why Verizon fought like hell to avoid net neutrality. They wanted options for trying to skim off the top of tv service. So Fios might be making modest profits now, it probably won't be in 5-10 years.
- shmerl 11y ago
  > With tv service going over the internet, the ISPs are going to have a hell of a time getting that much revenue back. Even if it won't be that much, with pure Internet they'll make enough profit, since Internet usage will only grow. And you don't need caps for it. Some resort to caps simply to rip people off, it has nothing to do with recovering expenses. Also, gutting TV they'll avoid paying retransmission fees and such. > So Fios might be making modest profits now, it probably won't be in 5-10 years. I expect the opposite.
  - rayiner 11y ago
    > Also, gutting TV they'll avoid paying retransmission fees and such. TV brings in way more revenue than the content costs. If you look at a cable co like charter, which doesn't have its own content arm, they'd be deeply in the red if they got rid of TV revenues even accounting for the decrease in programming expenses.
    - deleted 11y ago
      [deleted]
    - shmerl 11y ago
      > TV brings in way more revenue than the content costs. It does, but it doesn't mean that Internet service alone can't be profitable. One has to improve the network however. No one likes overpriced and capped low bandwidth connection.
      - rayiner 11y ago
        Improving a network costs money. Are people willing to pay enough money for a faster, TV-less network to justify that investment? Nobody in the industry operating at scale is showing that in their economics. People don't want wired Internet without TV, or at least not enough to pay very much for it. People in the HN bubble don't really get that. I live in a building where I've got a rock-solid 50/20 FiOS connection with amazing pings that never goes down. But in Baltimore Verizon doesn't have a cable license, so it's just Internet (which is fine, because I'm a cord-cutter). I also have the option of Comcast, which struggles with Netflix during prime-time, for twice as much money. When I first got FiOS installed, the installer was surprised to find out that the ONT on my floor wasn't even configured, because none of the ~50 units on that floor had ever subscribed to FiOS. Everyone subscribes to Comcast, because they want TV.