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.
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If you want to mingle with top venture capitalists and angels, who are funding the next wave of innovative powerhouses, join in for Splash SF at Cafe du Nord on the evening of February 2, 2012. Ten early-stage startups, who’ve been selected by their peers, will share the stage with rockstar CEOs as they give their secrets to success to a crowd of 400 startup CEOs, investors, service providers and bloggers.
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So far, the judge list includes:
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