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Isn't that $1MM upfront cost one of the major reasons why bonds exist? You get your $1MM bond now, and you repay with the future revenues you get from your cus
by novok 7y ago
Isn't that $1MM upfront cost one of the major reasons why bonds exist? You get your $1MM bond now, and you repay with the future revenues you get from your customers. You make the calculation and that debt payment, plus ongoing costs, plus profit is what you charge your customers. Eventually you 'pay off the mortgage' and then revenue really goes up, but with the rate of technology upgrades, you will always be 'paying your mortgage'.
- jrockway 7y agoYou still eat the risk, though. Maybe 5G is a thing and all your customers cancel next year. Now you have a 30 year payment on something that generates no revenue. That's where the fear is.
- novok 7y agoIsn't that business in a nutshell? You wouldn't have a much of a business if everyone went to 5G bond or not. Competition and doing risky things is part of business and partly why bankruptcy law exists. If your business implodes due to 5G, the bond is written off as part of bankruptcy and the lender eats the loss while taking over the business assets. Also seeing how low range 5G is, it basically looks like cell phone providers become wifi access point providers, which smells really close to what a wired ISP does anyway, which sounds like another ISP competitor.
- jrockway 7y agoMy thought was that the AT&Ts of the world could easily build their fiber networks for 5G backhaul. My former employer's thought was that the AT&Ts of the world would pay them to do that, though. I don't know who's right. The biggest problem I've seen at ISPs is the general unreliability of all the ISP-grade networking equipment. The routers are bad, the OLTs are bad, the VoIP phones are bad, the CPE is bad, the WiFi routers are bad, and the WiFi clients are bad. If I were an ISP, I'd be working on fixing all of that; everything that interferes with your customer wanting to send a packet and the host on the Internet receiving that... that is the area to optimize. But I don't think the funding exists. (It did when I was at Google Fiber, I worked on CPE. But Google lost interest, and at the smaller ISPs, it's all about buying as much crap as you can get off the shelf and letting your customers integrate it.)
- zzzcpan 7y ago> The biggest problem I've seen at ISPs is the general unreliability of all the ISP-grade networking equipment. I wouldn't generalize so much. It only seems that way, and only in countries where ISP markets are monopolized, because nobody cares about doing it well. Where there is enough competition things are completely different: ISPs are willing to test different GPON vendors, OLT/ONU, wifi routers, etc., figure out which features and configurations are reliable, which aren't, fix things that work poorly and so on, because quality becomes the reason people switch ISPs. Competitive industry also means lots of people with experience and expertise and lots of shared knowledge.
- xav0989 7y agoIt doesn't need to be monopolized, oligopolized works too. And it's not impossible for a monopoly to care and focus on these things, it's just highly unlikely.
- vetinari 7y agorisk = asking for premium Whoever is going to hold that black jack, won't do it for free, but will ask for money, because he is taking the risk.
- novok 7y agoYes, which is the bond interest rate and the amount they charge customers.
- dwild 7y agoThat can only works without risk in a monopoly.