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Comment by altoz | Hacker News Reader

> LA expects the fiber buildout to cost $3 billion to $5 billion, but the cost would be borne by the vendor.

> The new fiber network would offer free Internet access of 2Mbps to 5Mbps (possibly subsidized by advertising) and paid tiers of up to a gigabit.

Am I missing something? If the vendor is paying for the network and they're offering free internet, is the only source of revenue advertising and tiers above 2-5 Mbps? Seems like a money-losing proposition to me.

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They even mention that the vendor would pay for all expediting of permitting and such. Wtf is the city actually doing?

How is this even remotely something that a vendor would want to pursue?

It's a turnkey monopoly for only 3-5 billion dollars, the upfront costs are fairly trivial when you account for the fact that this could be a business that will operate into the next century.

Also, they're free to sell telephone and cable television service on top of internet. I think a few companies have been able to grind out a profit on cable TV.

There's another part of the article where this vendor is required to open their network to competitors.

They are required to sell wholesale to companies provided end user products. It seems the intent is to set the wholesale price for profitability.

Gouging end users by controlling their air supply is one business model. The city is preferring a model where the wholesaler makes a profit at the transport layer and competes in a market at the retail layer. Sounds good for the citizens to me and profitable for company.

I find it helps to take the unfamiliarly large numbers and convert them back to a human scale.

3.5 million housing units in LA. If you can average $12/month/household you can service your 10% loan on $5B.

Seems doable to me.

If it's doable then why hasn't any ISP done it already? It sounds like the RFP adds costs (open access) but no benefits to the existing situation in LA.

This seems like exactly what Google Fiber is offering in Kansas City, so much that it looks like an RFP for Google Fiber LA.

The LA RFP has requirements that Google has explicitly rejected in the past, like open access and no waiver/expediting of permitting.

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