5 ms·

I'm lucky that I am in Sonic's service area and get 10Gbps symmetric fiber service for $50/mo. It exposes the lie of the incumbents slow-walking new tech and ba

by rconti 3y ago

I'm lucky that I am in Sonic's service area and get 10Gbps symmetric fiber service for $50/mo. It exposes the lie of the incumbents slow-walking new tech and bandwidth increases. They _just don't want to_ because they _don't have to_ compete with anyone, and they'd rather print cash for their shareholders. They have the capital to build these networks far faster than a small regional ISP can. Multi-gig speeds, FTTP are profitable. There's just no incentive to innovate. They're just rent seekers. It's more profitable to charge more and deliver less.

Eddy_Viscosity2 3y ago
They won capitalism. The prize is you don't have to compete anymore, you don't have to innovate, and you get to charge more and deliver less. Getting companies to this position is foundational to the incentive structure of our economic system. Once they win, that's it. They get to stay there forever.
- grecy 3y ago
  I worked in IT for a large telco for four years that has a monopoly on an extremely large part of Canada. After years there, learning the insides, working closely with marketing and sales and all the rest…..I agree with you 100%. They literally have guaranteed teed profits in the form of VERY large government subsides. Of course they chase them, so instead of FTTH or other interesting initiatives they were hell bent on installing fax lines and copper because they had enormous subsidies.
  - simfree 3y ago
    Canadians love their monopolies full stop. It's a cultural issue where each sector has its handful of heavyweights, of which you have a choice of 1 or 2 to use locally, and even if there is a third option most Canadians just won't consider it. Comparatively, the US has thousands of small banks & credit unions, and tons of small and midsize ISPs that provide a 3rd or 4th option in areas like MDUs where they can make a go of it.
- xhkkffbf 3y ago
  They won capitalism? The government regulations are entirely responsible for the lack of competition. As it stands, competition found away around the wired line regulations. The wireless devices came along. And soon the satellite networks will give the cellphone carriers a real kick in the pants.
  - KerrAvon 3y ago
    Nope, you can’t the-free-market-will-fix-everything this one. The telco lobbyists wrote the government regulations. Wireless is slow and coverage is spotty. Satellite is unreliable, expensive, and has a fixed latency cost that can’t be eliminated.
    - gustavus 3y ago
      > Nope, you can’t the-free-market-will-fix-everything this one. The telco lobbyists wrote the government regulations Just a point of clarification, the free market generally means independence from government regulation. This isn't the free market failing so much as incumbents using the power of government to force their advantage, part of the argument of the free market is that by not allowing the government to interfere in this manner no one can get laws written to benefit them because the government doesn't get involved in the first place. Now granted that's in a frictionless airless world with spherical cows. But to say the free market failed and the very next sentence say it is because of regulation from the government is oxymoronic.
      - Eddy_Viscosity2 3y ago
        Even in this version of the free market, monopoly is still the incentive and end goal. Eventually, either a single player wins out (possibly by buying or merging with previous competitors) or a few big players agree that colluding with each other is more profitable then competing (remember there is no government interfering in this free market to prevent this). Once this happens, new players won't enter the market because they can immediately be crushed by the incumbent. So either way, monopoly is the inevitable end point.
Apes 3y ago
It's not quite that simple. Sonic focuses their fiber services only in areas that are most profitable to install fiber. As far as I know, they only install fiber on telephone poles that have free space, in areas that are high density. The cheapest install option for the highest possible revenue. I live right next to an area that has Sonic fiber, but there's no telephone poles, and an install would require an expensive underground installation. As a result, my area isn't even on their roadmap for future development. If you're outside the areas covered by their fiber service, Sonic feels it's still perfect fine to charge $50/mo for a 50 mbps asymmetrical DSL connection.
- dcplaya 3y ago
  Sonic announced expansion to my neighborhood 2 years ago with a status tracking page and everything! Status hasn't changed since the initial announcement 2 years ago...
- gessha 3y ago
  Stupid idea, I know, but what do you think of Telephone-pole-as-a-service TPaaS What are the regulations in place for putting up telephone poles and what are the associated costs?
  - koolba 3y ago
    Fiber-to-the-curb has been a concept for decades. The last couple hundred feet would traditionally be completed with copper but short range wireless could easily fill that gap in 2024.
  - PaulDavisThe1st 3y ago
    The costs include loss of service in every third major storm.
  - crote 3y ago
    This is already a thing in many countries! There is one company building and maintaining infrastructure, and anyone who wants to can provide a service on it for a fixed fee. I believe this is legally required for gas & electricity in Europe, and some of the privatized national phone companies here have similar obligations.
edmundsauto 3y ago
Att made around a 12% profit margin, which seems reasonable if a bit high. Would you consider 12% == “printing money”? I usually think of 25+% margins like in big tech that way. Not arguing just trying to understand how much money these companies are actually making.
- darkwizard42 3y ago
  12% in perpetuity with no stress the number will go down and lots of (imho insidious and customer unfriendly) ways for it to go up is in fact "printing money" Being able to make money risk free without risk of competition always ends up being worse for the customer and bad for the overall economy (in terms of efficiency)
  - simfree 3y ago
    This is why AT&T keeps looking for the next big thing that will net them double digit margins in perpetuity with minimal effort. They have bought and damaged the following assets in pursuit of this goal: DirecTV, HBO, CNN, Cartoon Network, Warner Bros and more. AT&T has terribly mismanaged and damaged these assets, from destroying their carriage agreements with Dish and other cable companies for HBO, reducing their revenue by hundereds of millions a year, to, to more than halving the value if DirecTV by destroying its value proposition and failing to retain the customer base.
- PaulDavisThe1st 3y ago
  Compared to what? Food retail is generally at 2% ...
  - fsckboy 3y ago
    food retail margins are 2% every time they turn over their inventory, which if they manage it properly can be much less than a month. so that 2% is annualized via a large multiplier the margins for telecoms are considered on an annual basis.
    - 3y ago

by rconti 3y ago

Eddy_Viscosity2 3y ago

They won capitalism. The prize is you don't have to compete anymore, you don't have to innovate, and you get to charge more and deliver less. Getting companies to this position is foundational to the incentive structure of our economic system. Once they win, that's it. They get to stay there forever.

grecy 3y ago
I worked in IT for a large telco for four years that has a monopoly on an extremely large part of Canada. After years there, learning the insides, working closely with marketing and sales and all the rest…..I agree with you 100%. They literally have guaranteed teed profits in the form of VERY large government subsides. Of course they chase them, so instead of FTTH or other interesting initiatives they were hell bent on installing fax lines and copper because they had enormous subsidies.
- simfree 3y ago
  Canadians love their monopolies full stop. It's a cultural issue where each sector has its handful of heavyweights, of which you have a choice of 1 or 2 to use locally, and even if there is a third option most Canadians just won't consider it. Comparatively, the US has thousands of small banks & credit unions, and tons of small and midsize ISPs that provide a 3rd or 4th option in areas like MDUs where they can make a go of it.
xhkkffbf 3y ago
They won capitalism? The government regulations are entirely responsible for the lack of competition. As it stands, competition found away around the wired line regulations. The wireless devices came along. And soon the satellite networks will give the cellphone carriers a real kick in the pants.
- KerrAvon 3y ago
  Nope, you can’t the-free-market-will-fix-everything this one. The telco lobbyists wrote the government regulations. Wireless is slow and coverage is spotty. Satellite is unreliable, expensive, and has a fixed latency cost that can’t be eliminated.
  - gustavus 3y ago
    > Nope, you can’t the-free-market-will-fix-everything this one. The telco lobbyists wrote the government regulations Just a point of clarification, the free market generally means independence from government regulation. This isn't the free market failing so much as incumbents using the power of government to force their advantage, part of the argument of the free market is that by not allowing the government to interfere in this manner no one can get laws written to benefit them because the government doesn't get involved in the first place. Now granted that's in a frictionless airless world with spherical cows. But to say the free market failed and the very next sentence say it is because of regulation from the government is oxymoronic.
    - Eddy_Viscosity2 3y ago
      Even in this version of the free market, monopoly is still the incentive and end goal. Eventually, either a single player wins out (possibly by buying or merging with previous competitors) or a few big players agree that colluding with each other is more profitable then competing (remember there is no government interfering in this free market to prevent this). Once this happens, new players won't enter the market because they can immediately be crushed by the incumbent. So either way, monopoly is the inevitable end point.

Apes 3y ago

It's not quite that simple. Sonic focuses their fiber services only in areas that are most profitable to install fiber. As far as I know, they only install fiber on telephone poles that have free space, in areas that are high density. The cheapest install option for the highest possible revenue. I live right next to an area that has Sonic fiber, but there's no telephone poles, and an install would require an expensive underground installation. As a result, my area isn't even on their roadmap for future development. If you're outside the areas covered by their fiber service, Sonic feels it's still perfect fine to charge $50/mo for a 50 mbps asymmetrical DSL connection.

dcplaya 3y ago
Sonic announced expansion to my neighborhood 2 years ago with a status tracking page and everything! Status hasn't changed since the initial announcement 2 years ago...
gessha 3y ago
Stupid idea, I know, but what do you think of Telephone-pole-as-a-service TPaaS What are the regulations in place for putting up telephone poles and what are the associated costs?
- koolba 3y ago
  Fiber-to-the-curb has been a concept for decades. The last couple hundred feet would traditionally be completed with copper but short range wireless could easily fill that gap in 2024.
- PaulDavisThe1st 3y ago
  The costs include loss of service in every third major storm.
- crote 3y ago
  This is already a thing in many countries! There is one company building and maintaining infrastructure, and anyone who wants to can provide a service on it for a fixed fee. I believe this is legally required for gas & electricity in Europe, and some of the privatized national phone companies here have similar obligations.

edmundsauto 3y ago

Att made around a 12% profit margin, which seems reasonable if a bit high. Would you consider 12% == “printing money”? I usually think of 25+% margins like in big tech that way. Not arguing just trying to understand how much money these companies are actually making.

darkwizard42 3y ago
12% in perpetuity with no stress the number will go down and lots of (imho insidious and customer unfriendly) ways for it to go up is in fact "printing money" Being able to make money risk free without risk of competition always ends up being worse for the customer and bad for the overall economy (in terms of efficiency)
- simfree 3y ago
  This is why AT&T keeps looking for the next big thing that will net them double digit margins in perpetuity with minimal effort. They have bought and damaged the following assets in pursuit of this goal: DirecTV, HBO, CNN, Cartoon Network, Warner Bros and more. AT&T has terribly mismanaged and damaged these assets, from destroying their carriage agreements with Dish and other cable companies for HBO, reducing their revenue by hundereds of millions a year, to, to more than halving the value if DirecTV by destroying its value proposition and failing to retain the customer base.
PaulDavisThe1st 3y ago
Compared to what? Food retail is generally at 2% ...
- fsckboy 3y ago
  food retail margins are 2% every time they turn over their inventory, which if they manage it properly can be much less than a month. so that 2% is annualized via a large multiplier the margins for telecoms are considered on an annual basis.
  - 3y ago