take rate

Content tagged with "take rate"

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Background From Reedsburg, Wisconsin: Community Fiber Pioneer

David Isenberg, of isen.blog, has published a short history of Reedsburg's community fiber network that he previously wrote for the FCC when they were gathering evidence of successful networks they would later ignore in formulating a plan to continue the failed status quo of hoping private companies will build and operate the infrastructure we need. Nonetheless, one cannot say that smart people like David did not try to help the FCC overcome its obsession with national carriers who dominate the conversations, and whose employees often work periodically with the FCC in what we call the revolving door (which itself, is a reason the FCC has been captured). Back to Reedsburg; it is a small community approximately 55 miles northwest of Madison that just happens to have far better broadband service than just about anywhere else in Wisconsin. David writes,
RUC first entered the telecommunications business in 1998, when it constructed a ring to tie its wells, its five electrical substations together and to provide Internet access for its high school, middle school and its school administration building. In planning the ring, the city asked Verizon and Charter if they would build it, but they were not responsive. RUS built a partly aerial, partly buried 7-mile ring of 96-strand fiber at a cost of about $850,000. Internet access was provided by Genuine Telephone, a tiny subsidiary of LaValle Telephone Cooperative which ran a fiber from LaValle, about 8 miles NW of Reedsburg.
As they were building the ring, local businesses asked to be connected as well. Reedsburg took the path that so many communities have followed, start by building for yourself and expand opportunistically. Of course, this requires that you originally engineer the network so it can be later expanded, which is good practice regardless of your future plans. Reedsburg used bond anticipation notes, a financial mechanism that few others have used in building similar networks.
A local bank loaned the initial $5 million in bond anticipation notes for planning and construction.

Another Chattanooga Update

Chattanooga continues to generate a lot of press since their announcement of the nation's fastest broadband speeds. For those who crave technical details, this article from Cable 360 looks into the tech behind the network:
EPB contracted with Alcatel-Lucent as its GPON network supplier. "We've designed our network a little bit different, with our control center located where our operations center is," says Wade. "We've designed a series of fiber rings that circle our city, allowing us to have multiple 10 Gig MPLS rings, terminating in 17 communications hubs connected back with our control center."
Another article from Cable 360 (affiliate) gets into the smart-grid details of the network:
As far as the cost savings of the smart grid are concerned, users often don't realize that it costs several times more at certain times of day to generate electricity than it does at others, says EPB COO David Wade.
But perhaps the most interesting update from EPB is another window into their take rates (from Tecca.com):
We are ahead of our business plan projections for this time frame. Since our launch last September (2009), we have signed up 18,873 homes to our EPB fiber optics services. That is a 15.45% take rate. Our goal is a 35% take rate, and we believe we will reach that in 2 years. Of our EPB fiber optics customers, 81% are receiving our Fi-Speed internet service. We are still building out fiber optics as well, and our entire 600-square-mile customer service area will have access to these advanced services by the end of the this year (2010).
And finally, a short interview (audio quality is not good) with an EPB employee discussing Chattanooga's community fiber network. An interesting piece: noting that EPB views all employees as ambassadors of their product and offered them public speaking training.

Wilson's Greenlight Ahead of Schedule, Deals with TWC Predatory Pricing

Wilson's Greenlight community fiber network is ahead of schedule. They continue to operate ahead of the business plan, despite a few difficulties that offer lessons to up and coming community networks. We recently covered the fallout from their application to the broadband stimulus program where they had to disclose network information to their competitors. Fortunately, that was not the only news last month from North Carolina's first all-fiber citywide network. They also surpassed 5000 subscribers and remain 6-9 months ahead of their business plan in take rate, according to the Wilson Times.
The number of customers is expected to reach 5,300 by the end of the fiscal year if the current trend continues, according to Dathan Shows, assistant city manager for Broadband and Technical Services. The city's current business plan calls for Greenlight to reach 5,000 customers by the end of the third full year of operation, which will be June 2011.
This is not the first time the network has exceeded projections;
the network was built faster than expected and quickly jumped out ahead of take rate expectations. One of the reasons Greenlight may be growing is its attention to local needs, as illustrated by the network finding a way to televise local football matches that otherwise would not have been available. However, the Wilson Times story goes into much greater detail regarding the competition from Time Warner Cable. As we regularly see, Time Warner Cable is engaging in what appears to be predatory pricing to retain customers and starve Greenlight of new subscribers. A lesson to other community networks, Wilson is documenting the deals TWC uses to keep subscribers. All communities should keep these records.
"Time Warner Cable's market tactics include anti-competitive pricing that interferes with Wilson's ability to secure customers through normal marketing," the application [for broadband stimulus] states.

Click! Partners with Community Media to Push Local Content

The American Cable Association has profiled Tacoma's Click! network. Click! is an HFC network owned by the city, via the public power utility. Tacoma Power only offers one retail service: cable television. Voice and broadband data services are provided by independent services providers who use the network on an open access basis. The network has been quite successful. Some 25,000 households subscribe and it has kept competitor rates (Comcast, for instance) far lower than nearby Seattle, for instance. I previously noted the economic development victories attributable to the network.
"If you're a cable TV customer or an Internet customer of any company in our footprint, you pay between 35% and 49% less than if you are not in our footprint," said Diane R. Lachel, Click! Network's Government and Community Relations Manager. "That's really significant. That's what the Telecom Act of 1996 was all about. That's the kind of competition Congress intended."
Other communities aspiring for successful networks should study the approach of Marketing and Business Operations Manager Mitch Robinson. Click! has embraced local content - something every community should do to differentiate itself from absentee-owned incumbents.
One Robinson innovation was the localization of video-on-demand (VOD). The inspiration for this product was the lack of Tacoma community news from the TV stations based in Seattle, about 30 miles northeast of Click!'s headquarters. Tacoma tends to make the local TV news mostly when the news is bad. In response, Click! decided to build relationships with a multitude of local nonprofits to create a steady inventory of VOD segments exclusively available to Click! viewers. One VOD service, called Safe Streets, shows how to energize a neighborhood by curbing gang activity, setting up block watches, cleaning up derelict properties, and scrubbing away unsightly graffiti. Click! also has exclusive VOD rights with The Grand Cinema, a local independent movie theater that also sponsors local film festivals. Through the Click!

Municipal Fiber to the Home Deployments: Next Generation Broadband as a Municipal Utility

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This report is basically a snapshot of how Community FTTH systems were doing as of early 2008. Deployments by municipalities were among the first FTTH systems operating in the United States. Though, in aggregate, they do not approach the number of FTTH subscribers of a Verizon – which currently accounts for two-thirds of all FTTH deployments in the U.S. – municipal systems do have a significant percentage of all non-Verizon subscribers. Further, they represent an important aspect of national FTTH deployment, namely, the option and opportunity for local elected officials and civic leaders to upgrade local connectivity - when private enterprise will not take on the job.

In the case of muni systems, which are not-for-profit enterprises, one measure of “success” is defined as the level of their “take rate” – that is, the percentage of potential subscribers who are offered the service that actually do subscribe. Nationwide, the take rates for retail municipal systems after one to four years of operation averages 54 percent. This is much higher than larger incumbent service provider take rates, and is also well above the typical FTTH business plan usually requiring a 30-40 percent take rate to “break even” with payback periods.