The Price of Dark Fibre

Honestly, I have been wanting to write this for a long, long time. I even have a few other drafts of this that will never actually be published, but such is life. Especially when writing.

To start from the beginning: I live in a housing cooperative of about 135 flats, I am not sure what this mean to anyone living outside of Denmark, but I can assure you it is quite normal here. For the most part it is just like any other way of living, except for the yearly general assemblies where we debate and vote on matters important to the whole coop and perhaps a "sprit of community", although that might mostly be a thing of the past these days.

Last year, I proposed (after more than a year of research and investigation) that the entire coop, installed an internal network and servered our ties to Yousee (the major ISP and cable provider in Denmark), switch to, a smaller non-profit ISP that only provides connections inside of Copenhagen. And it passed.

Now, a year later we are coming to the end of installation process and in fact I just signed up on parknets website, perhaps not the prettiest one, but it did the trick.

So I signed up for a new ISP, amazing right? No, I know it is quite unremarkable but parknet is a bit different from most other ISPs, at least on the danish market.

The thing about parknet is that the cost is only 65Dkk, which is as of this moment just shy of $10, and for that I get dark fibre. Admittedly, I do not get the fibre into my flat, but the connection will only be limited by the equipment in the building and the fact that it is shared with the rest of the coop.

The switch we have installed is a 10 Gbit, so there should be more than enough capacity for everyone. They advertise with a 50/50 Mbit minimum, and from the chatter I have heard we are more likely to see 200/200 Mbit minimum. From other installments I have even heard of 800/800 Mbit being achievable, but that would depend a lot on how many others are online and what they are doing. But in all honesty I do not know exactly how fast the connection will be, so I think I have to post/tweet a speedtest screenshot once the time comes.

But of course there is a downside in all this. We had to pay for all that equipment up front, which equated to about 6000Dkk, or just under $900, per share in the coop. This could have been an extraordinary one time expense, but in reality we payed it by taking a loan in the building, as not everyone just happen to have space in their budget for that. On the positive side, we now own our equipment and we could in theory switch to any other ISP any time we want to. The electrician we contracted to setup the internal network has also been very prompt and actually cheaper than the electrician the coop previously used for the normal maintenance.

I want to contrast paying upfront for your own equipment, to the standard ISP model, and explain a few things. Normally with other ISPs there is no upfront cost. They just install the internal network and plug in the fibre for you, but then you end up paying more per month to the ISP as they have to cover the fact that they payed for the internal network. And here is the catch: that extra monthly "fee" does not go away once the cost is covered. This means that while the standard model is cheap initially, after a year or so, we would actually begin loosing money because of it.

You might be asking yourself, why I am writing this. And actually I think this is a fair point, I struggle a little with finding the morale in this myself, if there even is one. I think the closest I can come to one is that I have been paying some attention to how the ISP market is in USA, mostly through ars technica and tek syndicate, and I wanted to share how the market can be if monopolies are not allowed to thrive, and how little a good connection actually costs in an moderately dense populated area.

Posted Mar 27 2016 by Esben Sonne