Article 43


Friday, September 03, 2010

Sonic Net

An ISP that knows nothing of “data hogs”

By Nate Anderson
ARS Technica
September 3, 2010

Pop quizwhich US Internet service provider made the following statement about a network upgrade?

During the construction of this network we have given a lot of thought… to the business model in the US, and how we could do things in a different and more interesting way. The natural model when you have a simple duopoly capturing the majority of the market is segmentation: maximize ARPU [average revenue per user] by artificially limiting service in order to drive additional monthly spending. But fundamentally this is the wrong model for a service provider like us, and we have looked to Europe for inspiration. The model pioneered by Iliad under the Free brand is a better fit, both for us and for our customers.

As the marginal cost of providing more bandwidth or less, and providing POTS voice or not are both minimal, we have adopted a simple flat rate model instead of the more typical US model of “$5 more goes faster"… I believe that removing the artificial limits on speed, and including home phone with the product are both very exciting.

Yeah… it wasn’t one of the major ISPs. Instead, it was, California’s largest indie ISP. The company has been in business since 1994, but the FCC’s eventual decision to deregulate wholesale broadband services put the company in a tough spot, where it couldn’t access the highest-speed components of the network at a competitive price. So has been building out its own “facilities-based” network around San Francisco, though it still requires access to the telco-controlled copper local loop to a customer’s home.

The new network, called Fusion, allows to offer ADSL2+ service along with its own telephone service (this isn’t VoIP, but actual POTS). The company currently sells one offering to residential users through Fusion: for $50 a month, they get uncapped ADSL that runs as fast as their line can handle (up to 20Mbps) along with free nationwide phone service. Users who want more bandwidth can order up a second telephone line and “bond” the two for speeds of up to 40Mbps by simply paying another $50. CEO Dane Jasper explained his unorthodox approach to selling broadband in a discussion this week with Benoit Felten, a Yankee Group broadband analyst, on Felten’s private blog. Felten, who’s based in Europe, notes that the US market “is often considered to be a static duopoly,” but he points to initiatives from ISPs like as refreshing alternatives.

“In an era where the buzzwords about broadband and the internet seem to be caps and hogs,” he notes, “it’s reassuring and exciting to see someone trying to buck the trend and offer what customers want as opposed to what he thinks customers should get.”


Posted by Elvis on 09/03/10 •
Section Privacy And Rights • Section Broadband Privacy
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