14 Comments

Summary:

San Francisco is slated to get a gigabit fiber network in the coming five years, with the construction on the network to begin next year if Sonic.net gets the permits it needs to begin the build out. But those permits are far from certain.

sanfranciscomap

San Francisco is slated to get a gigabit fiber to the home network in the coming five years, with the construction on the network to begin next year if Sonic.net gets the permits it needs to begin the pilot build out. But those permits are far from certain. As AT&T’s battle with the city proves, getting to a gig (or in AT&T’s case about 18 Mbps) takes more than just money — the city’s residents are active protestors of some of the infrastructure a fiber network requires.

I spent some time talking to Dane Jasper, the CEO of Sonic.net about how he plans to take on the incumbents, the cost of a fiber build out and the natives of a city that already have sued to stop AT&T from building out fiber to the node broadband. We also touched on caps and why Jasper can’t see himself offering businesses gigabit services in the near future.

They may be rivals but Sonic.net and AT&T share a common enemy.

When it comes to building out infrastructure, from broadband to roads, someone, be it environmentalists or neighbors leery of the project’s components, are bound to raise a fuss. When it comes to better broadband, the cabinets holding the electronics raise the ire of residents who would rather not have refrigerator-sized boxes on their lawns. For example, residents of San Francisco have banded together to sue to stop AT&T’s planned U-verse deployment, which requires more than 700 cabinets to hold the electronics gear be placed around the city.

Jasper says because Sonic.net is deploying fiber to the home, he will use fewer cabinets (he estimates 188) but he’s still worried that San Franciscans will step up to hold up or halt his permits. AT&T originally had received its permits, but those permits were halted by the court while this suit goes forward.

Jasper is worried that the suit could take another three to six months, and will hold up his deployment, but he’s hoping that fewer cabinets and a willingness to share Sonic.net’s infrastructure with other providers might make city residents view his cabinets with a bit more favor. After all, instead of building new cabinets, competitors interested in the market could share space in the existing boxes. Jasper understands that cabinets aren’t ideal, but he’s also hoping that if he plays it straight with the city, he can convince them that fiber-to-the-home is worth the potential of a couple hundred eyesores.

The Economics of broadband and fiber to the home.

The Sonic.net employees. Look for them in your neighborhood, San Francisco.

Meanwhile, Jasper declined to disclose his costs for providing fiber to the home in San Francisco, but he did say the fiber deployed would be a mix of aerial and underground cabling. Aerial deployments are cheaper because there’s less labor associated with stringing the cable. Jasper said he hasn’t chosen vendors yet, but he is currently using ADTRAN, Clearfield and Corning in the fiber-to-the-home build out he’s building in Sebastopol, Calif. Sonic.net is profitable as a company, and has been in business for 17 years.

The question is if Jasper can keep Sonic.net in the black while building out and selling fiber to the home to consumers for $70 a month. Sonic.net today offers two products in most markets, a $40 ADSL service with one phone line and a $70 a month 40 Mbps bonded DSL service with two phone lines. Replacing the copper with fiber adds costs, but Jasper plans to keep the rate the same. Sonic.net’s well known for declining to cap its broadband service and for adding a variety of services to its bundle without charging more. Jasper says, “fundamentally we recognize that as a competitive service provider we need massively differentiated products and we have done that with our fusion copper products and uncapped service.”

But, as Jasper says, “we recognize that copper is not a long term solution ten to 20 years from now and it’s logical to build fiber out.” So while there’s a bit of a chicken-and-egg situation to building out fiber in terms of the customer demand not necessarily being there right away, Jasper believes that the demand will come and he can deliver the capacity and afford the build out. Jasper is using ist Sabastopol buildout to help model the costs and demand for fiber in San Francisco.

Why businesses won’t get Sonic.net’s Fusion products anytime soon.

No caps and no meters for Sonic.Net

To help keep costs in line, the fiber links are for consumer accounts only, at least so far. Jasper has been an ardent foe of broadband caps, where ISPs place a limit on the amount of data a customer can use each month. However, when it comes to delivering broadband to businesses, he recognizes that a superfast gigabit connection to a business will have a very different usage pattern than one delivered to a consumer. Yet currently Sonic.net only charges businesses a bit more than residential services at $45 and $90 respectively). Under a gigabit network, that lack of price differential and the possibility for a business to use all of their connection (or even half) becomes unsustainable.

“We haven’t built our fiber past any businesses yet, and we did it intentionally,” Jasper said. “With our stance on no capping, I have a little bit of concern delivering 1 gig to a business at $89.95 and them using half of it, because that could really happen.”

Sonic.net has a decade and a half modeling usage for consumers at lower prices than rivals offer, but with businesses and their demand for broadband, Jasper says there are a lot of unknowns. For example, the lack of applications for gigabit networks probably helps Jasper here, as does the fact that most consumers typically use downlink services to consume content. And currently there’s a limit to how much they can consume, even with three or four TVs downloading or streaming HD content.

“Consumption is still constrained by the number of TVs and hard drives and even though everyone eventually has more stuff, practically speaking it really does end up normalizing down to a reasonable level,” Jasper says. He points out that the inbound bandwidth costs and middle mile bandwidth costs are getting less and less expensive, which means that customers downloading content isn’t a giant cost suck. But a business might hook a data center or several servers up on a gigabit connection and use that to send a lot of traffic out. And that could get expensive.

So for those watching U.S. broadband policy, between Google’s plans to deploy fiber to the home in both Kansas Cities, a few municipal networks, Verizon’s FiOS network and Sonic.net’s plans, we’re getting more people to a gigabit. It can be done, so let’s see what we can learn as these companies push ahead. And when others say it can’t be done, perhaps we’ll have the information that proves them wrong.

You’re subscribed! If you like, you can update your settings

  1. Learn more about Sonic.net and their plans for San Francisco in this interview on the talk show, Gigabit Nation – http://bit.ly/sFqyHO

  2. Bud Ryerson, San Francisco Wednesday, December 28, 2011

    We eagerly look forward to any service that brings fiber to our homes; however, all equipment must be installed underground. Cabinets on sidewalks are not tolerated; and we have too much junk overhead already.

    1. But cabinets underground are hard to access, and the type of equipment needed here needs to be accessed at fairly regular intervals. Imagine if every time your cable went out someone had to dig up the street or your yard to get to it.

      1. cabinets in a hole, access from top would solve the problem.
        of course a better long term solution is to push for a coordinated infrastructure plan that puts power, telco etc underground in single, easily accessed conduits…

    2. Infrastructure is a part of modern urban life. You’ll see above ground cabinets and devices which serve many functions: traffic signal control, electric metering, water backflow devices, TV and telephone, etc.

      Due to heat and ventilation requirements of equipment, putting it underground is actually much more above-ground impact. Instead of a 2’x4′ cabinet footprint, you end up with a 9’x12′ underground vault, raised ventilation and hatch system, power and more. Unfortunately, undergrounding is not a solution for these devices.

      -Dane Jasper
      Sonic.net

  3. Axcess Ontario, a non-profit public-benefit corp. that oversees a 200+ mile open-access fiber ring in Upstate NY, understands how critical broadband is for rural communities to stay competitive. Axcess Ontario would welcome the opportunity to work with Google, Sonic.net, and/or others on a FTTH initiative for Ontario County’s 100,000 residents and beyond. Permits are a non-issue since Axcess Ontario is licensed as a carrier by the PSC.

  4. The cost to run fiber in many areas can easily exceed $50/linear foot. If the cost is $5K/home passed (all in) that would mean about $18M for the 3500 homes in Sebastapol. If they land 25% of the homes at their $70/month plan that’s still less than $1M/year in gross revenue. Without even looking at their operating costs – did they say they make money with this model?

    1. We’re building all aerial today, at under $3/linear foot in placement cost, but some additional cost for materials. This means cost per home passed is under $500 per home.

      -Dane Jasper
      Sonic.net

  5. Dude thats jsut downright messed up man.
    http://www.privacy-works.tk

  6. Daniel Eran Dilger Wednesday, December 28, 2011

    “residents of San Francisco have banded together” is a bit of a simplification. There is a small but vocal faction arguing that AT&T shouldn’t be granted a massive windfall of public space to monopolize, particularly given that the City makes it nearly impossible for a cafe owner to put a couple tables on the sidewalk without absurd fees and permitting. The vast majority of the “residents” don’t even know what’s happening, and wouldn’t unless you posted details in ten languages.

  7. why is sonic.net unsustainable? They have a good business model, they have amazing customer service and they’re a fantastic company that I would go back to in a heartbeat if I were in the Bay Area again. I’ve never said that about an ISP ever before.

    They even knocked 10 bucks off my monthly bill when they changed rates without me having to ask for it. Ever seen Comcast do that? Nope! Would AT&T voluntarily give you 10 bucks a month back? Nope!

    It’s a good company, they deserve the good press.

  8. Don’t let a minority of vocal residents make a mockery of ‘community input’. Do it for the children, do it for the next generation of residents. Government is not just for the currently landowning.

  9. Joshua Goldbard Monday, January 9, 2012

    What *SHOULD* happen is a municipal fiber ring laid by the City of San Francisco and operated by a multitude of private companies. That sort of investment is politically impossible.

    It’s insane that private companies have to bear the cost of bringing the US into the 21st century. That, however, is the world we live in and with that reality in mind, the benefits of Gigabit to the home outweigh the disadvantages of these above-ground repeaters.

    Gigabit internet will dramatically increase the tax base through additional commerce. Faster Internet means more access which always breeds new business and ideas. What better city to lead that charge than the one by the bay?

    Cheers,
    Joshua

  10. Recommend you proceed along a second track for getting buy-in by the City of SF, which could do worse than to follow the lead of Sebastopol (however you got them to agree). You are a Bay Area Company and your access empowers other locals. Celebrate your cabinets in support of art programs, homeless mothers, early childhood development, security enhancements and other community benefits, and not just more too much tv albeit over the web. Let it be AT&T that is seeking to support you, as well, with advance agreement for sharing…and hold them and the other mean giants to support the cabinet celebration in advance and in perpetuity.

Comments have been disabled for this post