on artificial limiting service

Sonic.net’s new approach to broadband involves stringing its own fiber lines to homes and offering bargain-basement pricing; indeed, the new 1Gbps offering is the same price as the company’s earlier bonded 40Mbps DSL offering (in which two phones lines each provide 20Mbps of bandwidth to a home). The price even includes home phone service.

Sonic.net

Is this really a sustainable model? After all, Comcast offers 1.5Mbps service for a list price of $40; Sonic.net’s new offering is more than 600x faster at only twice the price.

Dane Jasper, Sonic.net’s CEO, tells me that the new fiber-to-the-home deployment is a trial and will reach about 700 homes when complete. “Honestly, only as those wrap up will we have a complete picture of the economic model,” he says. “But I believe that fast service for a low cost is possible.”

If the pilot in Sebastopol, California goes well, Sonic.net hopes to expand the service across the region.

Sonic.net

Jasper doesn’t think like a typical US Internet exec; in an interview last year, he made clear that his company tries to avoid artificial limits as a way to make more money. “The natural model when you have a simple duopoly capturing the majority of the market is segmentation: maximize ARPU [average revenue per user] by artificially limiting service in order to drive additional monthly spending. But fundamentally this is the wrong model for a service provider like us, and we have looked to Europe for inspiration… I believe that removing the artificial limits on speed, and including home phone with the product are both very exciting.”

via 1Gbps fiber for $70—in America? Yup..

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