Why is DSL More Expensive than Fiber per Megabit?

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    brigham
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    Ever since we separated the marketing of Fiber and DSL Internet at the beginning of 2015, a lot of customers have been asking the same question: Why is DSL More Expensive than Fiber per Megabit? For example, an Eagle Mountain resident with Fiber to the Home can choose a 30Mbps speed for only $29.95 a month, but the equivalent package on DSL is 10Mbps for $29.95 a month. Basically, fiber customers get triple the speed for the same price. Where is the justice in this?

    While DSL customers probably feel like they are being discriminated against, please understand the realities of the business situation.

    For many years, we kept the pricing of Fiber and DSL the same, just to keep things simple and avoid this very situation where DSL customers would feel hard done by. However, by the end of 2014, once Fiber customers were the majority in Eagle Mountain, we realized this policy was not only hurting the business from a competitive standpoint, but also holding back the Fiber customers from really enjoying their new service to its full potential.

    If we wanted to stay competitive, we needed to “unleash the hounds” on Fiber. Sadly, some residents of Eagle Mountain were still using cheaper wireless ISPs, which will result in less reliable, and slower (because wireless is shared bandwidth) service, when a dedicated fiber optic line was available to their homes. This was just wrong all around. We understand that people often make decisions based purely on their wallet though, so we did what we could, which was to increase the megabits offered on fiber and create more value for the customer. When it comes to competing with wireless providers, we decided that at least in fiber-ready neighborhoods, where we had no bandwidth constraints, there will be “no holds barred.”

    So, please do not look at our increasing value for Fiber customers as a negative action towards DSL customers. We care about our DSL customers just as much as our Fiber customers. Remember, in January of 2015, we did increase speeds for copper customers too, although the technology limitations on DSL, and the quality of many of the original buried copper lines, limit our ceiling on download to 25 mbps.

    If we don’t stay competitive and keep winning fiber customers, we won’t have the money to upgrade old copper neighborhoods to Fiber. If you are still on DSL, try to imagine that every dollar you spend is building towards your upgrade. Also imagine that all the money from the new Fiber customers is going towards your future upgrade.

    DSL Costs More to Provide

    Although our costs to provide service over copper are going up every year, we haven’t ever increased prices. We are just making less margin now. The reality is DSL is an older technology that is now very expensive to keep up to date with the demands of the modern broadband consumer. Updating equipment and electronics for DSL is more expensive than ever. Fixing and maintaining the copper lines is more expensive than ever. We spend a lot more time helping DSL customers, simply because DSL service is more…fickle than fiber. Bandwidth is a lot more precious on copper, because it’s technically just more difficult to send broadband over a copper line, due to the laws of physics. For a detailed explanation see http://blog.directcom.com/2012/04/23/are-there-any-limitations-to-dsl-service/

    25Mbps is the current max download speed we are comfortable selling, although some larger national providers do advertise 40Mbps or 50Mbps DSL, using the same latest DSL technology we use. We guarantee our products though, and don’t feel comfortable selling more than we know our customers will actually consistently see on a speed test.

    So, market economics dictate that where bandwidth is more scarce, the laws of supply and demand will apply, and that bandwidth will become more expensive. We have to charge more for bandwidth on DSL so that the people who really value faster DSL speeds can pay for, and receive, a higher level of service.

    DSL Still More Reliable than Wireless

    If you are still on the copper network, waiting for our fiber optics to come to your house, please know that we are working as fast as our available funding and resources allow to get the whole city upgraded to fiber. Rest assured that while you wait for fiber, our copper network is still absolutely your best and most reliable connection option. We use 4th generation ‘VDSL’ technology to hit the fastest possible speeds over our copper network. Plus, only Direct Communications provides you with your own dedicated line to your home, and true unlimited bandwidth with no data caps, or throttling.

    As far as publishing a roadmap goes: the good news is we have secured outside financing for the 2015, with the aim to bring in external construction contractors, to try to speed up the process of upgrading old copper neighborhoods in the Ranches to all new fiber. In April 2015, we began upgrading the neighborhoods around Nolan Park, which we refer to as the Chimney Rock area in our network map. These subdivisions were chosen specifically because the original copper lines put in by the property developers were in most dire need of upgrade or replacement, but we will use various criteria when selecting which subdivisions to upgrade next, depending on the whole network needs and best long-term engineering solutions. Our next project towards the end of 2015 will be upgrading all of Silverlake to Fiber. That project will probably take up much of 2016. We try to avoid announcing any projects too far out because of all the variables out of our control in our industry–like changes to regulations and rules and financing, not to mention competition, which can affect our planning.

    If you are thinking of moving to Eagle Mountain, and want the absolutely fastest possible internet speeds, check to make sure the home is already connected with Fiber to the Home. Call Direct Communications at 801 789 2800 and ask if the address is served by fiber. For a Google Earth map of which neighborhoods are currently served by fiber, download this KMZ file of our network and open it in Google Earth. If you don’t have Google Earth installed, download it for free at http://www.google.com/earth/download/ge/agree.html or download the app for your smartphone or tablet.

    We will continue to slowly but steadily upgrade from copper to fiber as our business model allows. If you are already on fiber, know that you are enjoying the most advanced broadband technology available anywhere in the world. If you are one of the customers still on copper, try to console yourself with the fact that you do have fiber to your neighborhood or street node. Only the last few feet through your yard to your home are actually still copper lines. We currently deploy the latest VDSL equipment to maximize the copper technology, and you can choose 25Mb DSL speeds, which is enough to stream about 3 Netflix movies at the same time. We are currently looking at increasing that copper offering to a 30Mb or 40Mb download to tide you over until we get fiber to your home. Someday every home in Eagle Mountain will have fiber all the way to the home, and the happiest people of all will probably be the employees of Direct Communications, your local broadband provider.

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