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Cable Technology Feature Article

March 22, 2010

ISP Plans to Build Its Own Fiber-to-Home Network

By Gary Kim, Contributing Editor

With the caveat that what can be done in a small community of 600 homes might not be feasible in a metro area of two million homes, Sebastopol, Calif.-based Sonic.net says it is mulling building its own fiber-to-home network, the Santa Rosa, Calif.-based Preess-Democrat reports.

What is unusual is that Sonic.net started life as a provider of dial-up Internet access service without infrastructure of its own.

But it now appears Sonic.net intends to become a facilities-based provider of broadband access, plus voice and video entertainment. In will become, in other words, a full-fledged, facilities-based triple-play services provider, on the telco and cable model.

The company expects to have its service lit and ready to use by the end of 2010, if it can secure enough commitments from customers in the target area. Company President Dane Jasper indicates that if all goes as expected in Sebastopol, Sonic.net will expand its efforts to nearby Santa Rosa, a bigger market.

The company has not yet specified the range of access speeds it will offer, but there is nol reason it would not consider speeds up to 50 Mbps to 100 Mbps, with an upgrade path to 1 Gbps.

The competitive situation includes an existing Comcast (News - Alert) service running up to 20 Mbps and an AT&T top speed of 6 Mbps.

The challenging part of the deployment will come on the retail pricing, or revenue, side of the equation, not the actual construction cost, which can, as always, be specified relatively precisely.

Sonic.net has indicated it will offer services at prices competitive with the broader market. And the company also says it will not commit to construction until a specified number of potential customers have signaled their intent to buy by switching their broadband access service from any other provider to Sonic.net.

But it appears the hurdle rate will be somewhere in the 30-percent range. In Sebastopol Sonic.net already has 25 percent penetration. In all likelihood, the project is not feasible unless a bit higher penetration is possible.

There will be several other issues, including the need to create the headend infrastructure for video services, plus the business agreements for access to content.

Normally, that is an expensive undertaking for a small, facilities-based access provider. The crucial first step, though, is getting commitments from potential customers representing something more than 25 percent of customers in the target area.

Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.

Edited by Kelly McGuire