What Access Network Choices are Available at 20 Homes Per Plant Mile?

Scale always matters when discussing the cost of internet access infrastructure. The economics of a network in a city, smaller town or rural area; with strong competition or just “some” competition; which providers get universal service funding and which do not; the state of mobile or other wireless alternatives all make a big difference.

Some in the rural WISP business might argue that fiber to the home does not make sense. Others argue FTTH can make sense for WISPs. even in rural areas where there are 20 homes per linear mile of plant.

Rural networks often have as few as six homes per linear plant mile, however.  

So FTTH and other fixed network options might be possible at low densities, but even in small towns, where there are 100 homes to 200 homes per plant mile, the network cost per passing ranges between $600 and $1,000 (before the additional costs to connect a customer).

Cost to actually connect a customer might range between $600 to $650 per location, with business models and costs varying based on the type and number of services to be supplied; the number of TV outlets; the scale of the ISP’s operations and therefore buying power; churn rates and retail prices.

So cost per customer is a different matter. At 50-percent take rates, the cost per customer (plant only) is double the cost per passing. At 25-percent take rates, the cost per customer is four times the cost per passing.

But volume, in addition to density, clearly matters. In a one-off case, it can cost $20,000 for a fixed network to pull new fiber to a single location in a rural area.

Traditionally, cable and telco networks have made most sense when there are 75 to 200 homes per linear plant mile. It can be quite a challenge when homes per plant mile are two orders of magnitude less.

To be sure, a small business (such as a rural wireless internet service provider) has some options a fixed network ISP might not have. A WISP can use lower-cost fixed wireless infrastructure and operates with less overhead.

A WISP can pick its markets in ways that telcos or cable companies cannot. But competition matters.

The reason many customers in rural areas buy satellite-based internet access is precisely because there is no payback from extending a fixed network to their locations, so such networks will likely never be built.