> We are now subsidizing the local power utility coop which had the bright
> idea to go into the internet/phone business. So we, the ratepayers, are
> throwing our money at T-mobile to install towers in conjunction with the
> fibre the coop is pulling all over. This was supposed to be a money making
> proposition by now but in fact the ISP side of the business is sucking money
> out of the power side which has gone from a model power distribution coop to
> being massively in debt. Turns out that the ISP side can't get independent
> funding since its business model makes no sense so the utility side is
> guaranteeing the debt. Looks good on the spreadsheet but the bottom-line is
> the same for the ratepayers.
Utility co-ops and municipal telephone companies are a complete
disaster for the consumer in most cases. Short-term savings end up as
long-term cost increases. When the idea is sold to the public, the
rising costs on a going-forward basis, equipment replacement schedules
and leased capacity out of town are always under-estimated.
A case in point is the previously mentioned replacement schedule for
routers. Real-world replacement is 4.5 years, but instead, the longer
estimate for access and network equipment of 7 years is used. This
results in two things: Either a price-hike is required to cover the
cost of routing and switching equipment that has to be replaced 2.5
years early, or they will lag behind on features and capabilities once
that 4.5 year mark has been reached. (Router replacements may also
include router upgrades where the backplane or processor is replaced
which reduces the cycle cost a little bit, but not much).
Here in Iowa, we have the most telephone companies anywhere in the
country. It's a little historical anomaly that sets Iowa apart. We
also have a large number of municipals and co-ops. Without exception,
every single one did a major upgrade of their network, with many even
deploying FttH in the 1998-2005 time-frame based on the incredible
cash influx from access termination revenue. Those systems were
gold-plated and "flyover country" had some of the best voice and
Internet access in the entire country. However, nearly all haven't
been upgraded since and are becoming antiquated. Not only did access
termination revenue fade away, but these telcos are holding off on
bandwidth upgrades to the Internet. The Internet experiences a
significant reduction in performance in the evening hours. (hint: if
you experience slowdowns in the evening, your provider isn't scaled up
correctly). The maximum oversubscription of the network should not
exceed 20:1 of sold aggregate bandwidth.
The company I work for has been replacing every one of our DSLAMs in
the country and all have a minimum of dual 10G connections back to a
primary router location which has multiple 100G connections to
multiple Tier 1 data centers. When I hear and read about how awful
internet speeds are here in the USA, I get a bit miffed, because I
know that our company provides better and faster Internet in the most
rural community than most anybody can in a major city. The caveats
have to do with local loop length between the serving equipment and
the customer site. If I didn't live on the outskirts of town, I'd have
100Mb at my house in nowhere Iowa. I'm only limited to the speed I
have because of the cable length and pair-availability.
T-Mobile? Your co-op made a deal with the T-Mobile? I'm so sorry. Yet
considering the option of staying with 19CL? Yeah, tough call.
AG Schnozz
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