Reply to post: Re: Not in my name...

Re: Not in my name...

Let me correct that for you :

> As others have said the first point to make (one made by others) is that there is nothing stopping other operators from setting up their own networks

Actually, yes there is - there is a great deal stopping them, and you don't have to look far to see how it's panned out in the past. Not all that long ago (your perspective may vary), loads of companies set up with a view to rolling out "cable TV" services which also included phones in most cases. They pretty well all collapsed (ran out of money) and ended up being bought by bigger fish for peanuts - in effect, the investors lost loads of money, and got a small amount of their money back from selling the business for whatever anyone would pay.

Via various mergers and buyouts, what is now Virgin Media was formed - and a huge part of their infrastructure was paid for by investors in the original companies who lost their investments.

The key thing is that the wires to your house are a natural monopoly - just like the gas pipes, water pipes, drains, roads, electricity cables. It would make no sense to build another competing road network and have you on a different road network to the neighbours - phone cables are not that much different.

So the natural state is to have one supplier who runs one lot of infrastructure, and in a neutral manner allows anyone who is financially and technically competent to rent that infrastructure to provide services

Assuming I've not persuaded you of that, now consider what is probably a typical situation. You have a village of (say) 100 houses, it's miles from anywhere, and is currently served by BT OpenRetch. For OR to connect up a new subscriber, they can (probably) use a spare pair in cables that are already laid; if there isn't a spare pair they can (probably) put a new cable in the existing duct or along the existing poles; and if they do need a new cable, it's highly unlikely to be needed for all the miles back to the exchange since it's highly unlikely that all the trunk cables have exactly zero spare pairs in them.

Now suppose the subscriber instead wants service from ANOther provider who builds their own "local loop". ANO doesn't have any services in the village, so it's going to have to lay new cables - meaning new poles (and given how nimbys are, more likely ducting) all the way back until they reach their existing network. That could be many miles of ducting to lay - for just one subscriber. The last price I saw from BT was many years ago, and back then it was something like £1000 per 100m, or £10k/kilometer.

ANO may decide that it's worth it, perhaps they think they can sell services to other people in the village, but more likely they'll decide that laying out many tens of thousands of pounds in the hope of getting more than a handful of £20/month subscribers doesn't make sense.

Even in an urban setting with shorter distances, it just doesn't add up - and trenching in urban environments costs more anyway.

Perhaps if 50% of the villagers clubbed together and guaranteed to take services for some years, then it might be possible. But even with 50 subscribers, @20/month each doesn't really start to pay back the investment. It's only £1k/month assuming that ALL of what they are paying goes just to repaying the costs - which is perhaps only 100m/month of trenching cost if you ignore the interest on the money you had to borrow to pay for that.

That's what killed the cable TV companies - they had to borrow huge amounts to build out a network, and just didn't get enough subscribers, fast enough, and paying enough, to finance the interest let alone make a profit.