chiraqDrahi's Altice also is financing Layer3. They are offering a 4K set top with up to three terabytes, apparently designed to connect wirelessly to a simple network interface device. That avoids needing to wire in the home, which Fran Shammo says is often the largest cost in a Fios connection. They are about to launch in a Chicago neighborhood and are also hiring installers in Alexandria, Virginia. 

Cable tech legend Dave Fellows and partner Jeff Binder have raised $100M, hoping that Comcast, Verizon, and AT&T have loads of unhappy customers who will switch. Paulson is a gambler who made $4B betting that triple-A rated mortgage bonds would default in 2008.

Like most famous hedge fund guys, he has his slumps as well; half the money in his fund is gone. Bloomberg says the banks demanded a personal guarantee on a loan to keep his funds afloat. George Soros also has invested in an over builder; he put $75M in Hyperoptic in England.

Google is confident they will take 30-40% of the market in Kansas and make money. A decent take rate is absolutely required to pay the high costs of network building. AT&T hasn't fibered Chicago and I believe hasn't even brought U-Verse to the entire city. They are obviously vulnerable. On the other hand, Comcast has promised gigabit DOCSIS 3.1 will begin in the next 90 days in Chicago. Chicago Tribune. 

Comcast appears to be sticking with a slow upstream of 30-50 megabits rather than using the upstream capabilities of 3.1. As far as I know, they are waiting for full-duplex upstream. It's years away. Fellows could jump ahead with the more robust cable upstream possible with today's equipment.  

Dozens of well-funded outfits have gone bust hoping to succeed as a third broadband provider in U.S. cities. Without effective unbundling rules, they nearly always failed to acquire enough customers to cover fixed costs. $Tens of billions - literally - were lost taking on the telcos and cablecos at the turn of the century. Many thought the big companies were slow, fat dinosaurs ready to be decimated.

Covad's market cap was $10B, a success that inspired dozens of similar CLECs. Nearly all went bust within a few years. It became impossible to finance a third entrant into a U.S. broadband market for more than a decade. "Telecom is a business of scale," Verizon CEO Ivan Seidenberg explained. "The new outfits don't have scale so they have no chance." 

The drought is over. 

 

 

 

 

 

 

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The news, July 21, 2017

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