The news of an investor rescue of the Philly network is welcome, but the devil is in the details. The investors are picking up an important distribution infrastructure that they can use to build a business on. The duopoly has set bandwidth prices high enough, and the scarcity of wired broadband is such that if you take that distribution infrastructure and use it to deliver ethernet handoffs, you can make some serious coin. Especially if you can deliver better than DSL performance and bundle some perks that the incumbents charge extra for.
The free no-support wi-fi is a no brainer to pickup the rights of way and siting agreements. It allows the politicos to save face and not impede the deal. There's no way to make decent money reselling somebody else's infrastructure, unless you have a massive account base to aggregate those slim margins over. You have to reduce your monthly nut by owning your own backbone to your internet peering point. Flipping the asset and giving away wi-fi while aggressively selling wired bandwidth to class B and C office buildings and multi-tenant units gives this plan a good shot at being viable. Real estate is everything in this game.
I'm also happy to see an investor seeing promise, even in a failed network. I hope they'd be even more interested in a profitable wireless broadband provider, wink wink, nudge, nudge!




