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Neal Lachman

 
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  • Challenges And Opportunities For Google's Fiber Project: A Reality And Sanity Check [View article]
    So, as a so-called specialist in this field you want me to do your work? If you are not aware of competitive approaches, then that's your lack of knowledge of this industry, and I'm not going to educate you (further). Hint: use a famous search engine with some key words, and you'll get far.

    I also can't see where you are deriving the rights from to call Google's fiber project a clear, winning example of competition. They haven't started yet in a scale to judge their success. Nevertheless, I am pointing you to the financial risks, we may even agree on the other parts. So, stop taking me into a circular discussion. This analysis is about FINANCIAL RISKS. I hope you get that by now.
    Sep 6 10:51 AM | Likes Like |Link to Comment
  • Challenges And Opportunities For Google's Fiber Project: A Reality And Sanity Check [View article]
    The world is larger than the USA, at least for me. There are great competitive approaches everywhere.

    And please, stop preaching to the choir. Who are you trying to convince about this industry? I have bet all our money on this, and we have great stakes in this being a winner. I am just making realistic analyses to see how feasible something can be. It's my job not to hype but to show the ins and outs, my investors demand this. I am just sharing the outcome. That you want to hype things is your concern, not mine, and it is not to the benefit of this nascent industry if giants like Google will overdeliver and underpromise. What will that do to the credibility of the industry at large, pray tell.
    Sep 5 04:37 PM | Likes Like |Link to Comment
  • Challenges And Opportunities For Google's Fiber Project: A Reality And Sanity Check [View article]
    Hi Anand,

    Good point, but that is a bit of a moot issue in the case of Google's 1 Gbps symmetric FTTH promised service. It is practically impossible that they can deliver such symmetric service/connectivity with PON technology (as of today's standards).
    Sep 4 02:49 PM | Likes Like |Link to Comment
  • Challenges And Opportunities For Google's Fiber Project: A Reality And Sanity Check [View article]
    First of all, I've seen better competitive approaches, with mixed results.

    Second, you are preaching to the choir here. The whole analysis is about a large scale project and basic fundamentals (such as CPC), and it is to review potential large scale project by Google, as many
    hope it will be.

    My comment on the Forbes article that heavily featured this analysis can be found here: http://onforb.es/PxxJcR (the second comment that you'll see on the comment page).
    Aug 31 03:20 PM | Likes Like |Link to Comment
  • Challenges And Opportunities For Google's Fiber Project: A Reality And Sanity Check [View article]
    Thanks BetoElenes. Yes... as a matter of fact, in our own financial modelling we simply don't differentiate between CPHP and CPC. We take a $ amount that we deem appropriate for a particular market, then consider the market size and then say, ok... City X has so many OCCUPIED homes, and we multiply that with the CPC. Then we have some further models to derive variables. How and what, I can't disclose.

    But it has to do with some risky assumptions, which is always a pain with prognoses.

    See, I don't fully agree with the fact that the CPHP (we barely ever use that term, to be honest) in VZ's project is $23B / 17M. It skewers the factual numbers. Why? Because on the other hand you go and estimate the number or households that take the service, let's say 5M. The outcome (as described already) would be: $23 / 5M = $4,600... That is a ridiculous number (if not completely BS), even though it is a right formula. It is a moment-snapshot.

    Next year, VZ may suddenly create a massive campaign, slash prices... blow the competition out of the water (if not the planet), and they arrive at a fantastic 100% take rate (17M). Let's see... that's $23B / 17M... That would mean what was once the CPHP is now the CPC. Isn't that confusing? I'd rather go with our formula (to arrive at a blended CPC) as briefly described above.
    Aug 7 04:12 PM | Likes Like |Link to Comment
  • Challenges And Opportunities For Google's Fiber Project: A Reality And Sanity Check [View article]
    Good point! Now I wonder why they don't really promote that. Can't be that they accidentally forgot to include it in their offering. Maybe something for later? Would be a great strategic choice (although I haven't done an analysis of the possibilities).

    But again... this analysis is about the issues surrounding physical rollout of FTTH, not really about the possibilities for voice.
    Aug 6 03:06 PM | Likes Like |Link to Comment
  • Challenges And Opportunities For Google's Fiber Project: A Reality And Sanity Check [View article]
    Please, don't be so patronizing. Who are you calling a pessimist? I am the guy who worked longer in this industry than most likely anyone at Google. I chose this particular industry (well, in fact, it chose me - but that's another story), and stuck with it, seeing the massive opportunities.

    This analysis is just a reality and sanity-check. As an investor, that is your first and foremost duty (for your own good).

    If you want a cheerleader, please let him/her be a realist too. And if you start comparing with other countries, you forget many aspects that are crucial to a large scale project.

    Also, this analysis is mostly based on FTTH beyond Kansas: a large-scale or nationwide rollout.
    Aug 6 04:33 AM | Likes Like |Link to Comment
  • Challenges And Opportunities For Google's Fiber Project: A Reality And Sanity Check [View article]
    Thanks for your comment Larry. Indeed, kickstarting could be very well one of the strategies. I don't know whether it's smart to do a pilot project on such a scale though.

    FYI, In the early 2000s TechNet pushed for 100 Mbps to 100 million households (USA).

    See announcemment: http://bit.ly/OEa1eM

    http://www.technet.org

    TechNet was founded in 1997 by high-tech’s leading CEOs to create a network of the nation’s strongest voices in the industry to unite with both federal and state leaders in helping to shape the public policies that impact the technology industries.
    Aug 6 04:26 AM | Likes Like |Link to Comment
  • Challenges And Opportunities For Google's Fiber Project: A Reality And Sanity Check [View article]
    Nobody is saying that Google can't do voice. The thesis here is twofold... what are the challenges and what are the opportunities.

    Keep in mind that 1 Gbps is great, but in its respective markets FiOS was the fastest too. Notwithstanding pricing issues, the take rates were low. I am not saying that Google can't be successful in Kansas City. Everyone can be successful at a small scale, but we are mainly talking about beyond Kansas... what is the outlook for a multi-million connections rollout, and what are the risks. That, according to Seeking Alpha, was what the readers want to know.

    Just take a look at what VZ's competitors did when FiOS threatened to disrupt their market.
    Aug 5 07:39 AM | Likes Like |Link to Comment
  • Challenges And Opportunities For Google's Fiber Project: A Reality And Sanity Check [View article]
    Nobody said that it can't be done... at certain places it has been done for even cheaper. But you have to take averages.

    Also, small projects (and yes, 100K is small) are always better manageable than massive projects. Don't forget that real numbers may be higher in the end. These are forecasted numbers... VZ came home to roost from such low-ballpark numbers.
    Aug 4 08:20 PM | Likes Like |Link to Comment
  • Challenges And Opportunities For Google's Fiber Project: A Reality And Sanity Check [View article]
    My apologies... you are right: I should have mentioned it as following:

    1. Serviceable footprint (homes passed, = CPHP)
    2. Connectable footprint (Cost Per Connection)
    3. Cost per subscriber

    In VZ's FiOS case it would be:

    1. CPHP = $23B / 17M = $1,352
    2. CPC = $23B / 5M = $4,600
    3. We assume that the CPC and CPS is one and the same
    (in our Angie business model we include lots of costs in the CPS)

    Hope that clarifies it. Again, my apologies. (SA doesn't allow instant changes, so I haven't bothered with much of the text after publication).

    (Of course, the best way is always to go with the blended CPC - I advise ignoring the CPHP).
    Aug 4 06:32 PM | Likes Like |Link to Comment
  • Challenges And Opportunities For Google's Fiber Project: A Reality And Sanity Check [View article]
    Good question.

    1. The high-end, yes... (I don't know what scheme VZ is basing its 17M on, but that's beside the point);
    2. If you'd take the low end, it would be even wilder: $23B divided by 14M homes = $1,642. But I rather go with VZ's own numbers;
    3. This is a so-called blended CPC, wherein you don't necessarily differentiate between homes-passed and homes connected. Instead, you look at the total project and the total serviceable (thus connection-ready) market.
    Aug 4 05:58 PM | Likes Like |Link to Comment
  • Challenges And Opportunities For Google's Fiber Project: A Reality And Sanity Check [View article]
    CES, the wiring that comes into your home from Charter is based Hybrid Fiber/Coax technology. It's not the same as pure-play FTTH.
    Aug 4 05:45 PM | Likes Like |Link to Comment
  • Challenges And Opportunities For Google's Fiber Project: A Reality And Sanity Check [View article]
    True, however... who can predict the future? Maybe this very same infra that GOOG is building will help its own demise... if some other bunch of geniuses create a much more efficient algorithm, for example focused on video and 3D?

    I am just trying to say that whatever the revenue model is, and whatever the payback period is... there is this huge upfront risk.

    Don't get me wrong, my very own company is talking about 10 Gbps (not "just" 1 Gbps), and we think we can make massive money for our investors, but we have to keep an eye on reality too.
    Aug 4 04:29 PM | Likes Like |Link to Comment
  • Challenges And Opportunities For Google's Fiber Project: A Reality And Sanity Check [View article]
    Sure, you are 100% right. But if Google can do that, Jack and his uncle can do it too (maybe not as geniusly)... do you really need a gigabit connection for that?

    BTW, this kind of digital insertion and interactive TV/advertising issues have been talked about and tried out since long. I remember giving an interview about this... back in 1998! ;-)
    Aug 4 04:11 PM | 2 Likes Like |Link to Comment
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