May 17, 2009
Not quite the same as what Tim Wu and I proposed.
But this is a neat demonstration of why ownership is attractive to consumers, and could be attractive to carriers.
“In addition to entering an area with tremendous support already lined up, Lyse also does something innovative: it allows prospective customers to dig their own fiber trenches from the street to their homes. In return, customers can save about $400. “They can arrange things just the way they want,” says Herbjørn Tjeltveit of Lyse, which makes for happier customers; apparently, nothing angers a Norwegian more than having some faceless corporation tunnel through his flower garden.
“The scheme also appeals to a Norwegian sense of thrift and do-it-yourselfness, says Tjeltveit, and he speculates that it has an additional benefit: customers who put some sweat equity into bringing their Internet connection from the street to the basement are more likely to be invested in the product and the company. (The obvious downside is that passionate customers are more likely to complain whenever they see shortcomings in the product.)
“So far, 80 percent of all customers have elected to do their own trenching, following the instructions and timeframe provided by the company. A technical team still has to come out to pull the fiber from the street through the ducting to the house and then make the proper termination, but much of the tough manual labor is avoided.
“A new fiber deployment can certainly be expensive, but Lyse has insulated itself from much of the risk. The model works, too; the company is now the main fiber-to-the-home provider in Norway, where it covers half the municipalities, and its customer churn rate has stayed quite low. As for the future, Lyse can ramp up the speed dramatically once all that precious fiber is in the ground; its partners are already testing both 100Mbps and 1,000Mbps connections.”