Owning Solar Panels vs Owning Fiber Optic Connections (10 points)
I know owning fiber connections isn't a thing yet, but neither was roof-top solar. In this thread I compare owning your electricity with owning your Internet.
1. Physics: Fiber wins BIGLY.
Solar generates power during the day only. Solar panel efficiency is still improving. Not much more to be done with the physics of a fiber topic strand. Accessing more bandwidth just requires upgrading electronics that don't cost much.
2. Construction cost: Fiber wins slightly
Solar roof cost ranges from $15,000 - $25,000. An average fiber connection costs $2,000 in America! Fiber Optic Association considers $4,200 / household to be a complex rural project.
3. Depreciation cycle: Tie
A fiber cable will last 30 years easily. Solar panels about the same. But solar panels of tomorrow will be more efficient. Fiber is already kind of perfected from a physics perspective. Improvements are all coming from the electronics not the strand.
4. Collateral quality: Solar wins
Solar panels can be removed and sold in the secondary market. Digging out a fiber cable to re-sell it will never make sense. But a small scale fiber network can be sold to an ISP in many cases for 20-30 cents on the dollar.
5. Pay-back period: Fiber wins
Owning fiber can shave off ~$35/month of Internet bill for most users while making that wire accessible to all ISPs. At $4,200 / household (complex rural) payback is ~10 years. In more rural, Solar will win.
6. Coordination effort: Solar wins
Selling electricity back to the grid is easy. With fiber, there's a bunch of coordination still required with middle mile operators and ISPs. But there's no reason why this coordination cannot be simplified. @AltheaNetwork is proof.
7. Tax incentives: Solar wins BIGLY
Fiber loans aren't even a thing yet so needless to say no tax incentives available for owning your fiber.
8. Service quality: Fiber wins BIGLY
There's no bandwidth concept in electricity. But anyone who uses DSL knows fiber is much better. Plus owning fiber means ANY ISP can serve you for very little cost. 90%+ cost of provisioning Internet is in construction.
9. Property value increase: Solar wins for now
Research on property value rise says solar fetches a 4.1% improvement in property price and fiber 3.1%. Plus the fiber research is choppy. Although physics favours fiber so by 2025 this should change.
10. Maintenance: Fiber wins
Solar panel cleaning is at least $15/month, fiber maintenance is most cases will be $10/month or so. Many utilities I've spoken to have said they'd be happy to do it for $5/month / user.
If you work in residential solar financing (US market only) or know someone who does, please tag them here. I believe the parallels are worth exploring between solar and fiber. I am currently exploring how Home Equity Loan products can be tailored for user-owned fiber networks.
Note that goal here isn't to dis solar but find more allies that can help solve a pressing issue of our time i.e. the digital divide.
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Imagine being a VP of Product at a unicorn tech company (~2,000+ employees) at the age of 29 and then deciding to quit your career to become a historian....without having any background in history!
Meet Azfar Moin, a Pakistani man who pulled this off.
Today Azfer is considered a world class historian. His book, The Millenial Sovereign: Sacred Kingship and Sainthood in Islam, has won several prestigious awards and he is currently a tenured prof at UT Austin.
Last year I got a glimpse of the question that drives him:
“Why would the most powerful man in the world (Emperor Akbar) declare himself an apostate? (Akbar declared himself the most sacred being on earth, turns out many before him (eg Genghis Khan) pulled off a similar move)
I had the privilege of meeting an incredible Pakistani yesterday. @sidraqasim is best known today as co-founder and COO of @WearAtoms , a leading footwear company she created with her husband Waqas. 1/n #persistence
Sidra was born and raised in Okara, Pakistan. When she finished high school she had to enroll in an all-boys college but not attend classes with other boys. Studying in seclusion was uncomfortable but she persisted.
When she got her first job in Lahore, it paid PKR 10,000 / month and that meant living in a hostel near Firdous Market where monthly rent was PKR 4,000. Living in a cramped hostel was uncomfortable but she persisted.
Fiber backed securities: the key to unlocking a $100 bn market driven stimulus that will
1. Deliver a 9% return to investors (4% annual cash coupon, 5% capital gains)
2. Make fiber Internet accessible to 50 million low/mid income American households for $9.25/month
How it works: investors will subscribe to shares of a NewCo. NewCo will use cash to invest $2,000/home as growth capital in several homes to pay for a last mile fiber connection. In exchange NewCo gets fractional share in multiple homes + $6.5/mth/home cash dividend.
When a fiber connected home is sold, NewCo can exercise its tag along right to sell along with home owner OR continue to stay in the property to keep earning a 4% coupon. Worth noting that Fiberizing a home causes its value to experience a one time bump of 3-7%!
How to finance a rural fiber project at $10,000 / Household Connected without subsidies- a thread.
$10k / HHC is considered extremely difficult because payback on such a cost at $50 monthly revenue is well over 30 years. Unfortunately many areas in America fall within this extremely rural category and are therefore neglected.
For context, the @fiberopticassoc considers $3,600 as a complex rural deployment. Implying that $10,000 would be quite outrageous.
The imagined reality of capital gains financing critical infrastructure
@harari_yuval says nations, money and corporations are imagined realities. He argues that fictions narrated by lawyers today are far more fantastic than witch doctors of days past. His larger point is that when enough people believe in a story, it becomes real.
I consider myself a financial engineer. I use my knowledge of market forces to construct bankable contracts in order to solve a problem. For the last four years I’ve focused only on one problem: how to make Internet access affordable for all.
First principles thinking applied to Internet connectivity and the digital divide - a thread
1. A first principle is an axiom or assumption that is self evident and therefore can’t be deduced from other assumptions. The most relevant first principle that can be applied to Internet connectivity is Shannon’s Law. en.m.wikiversity.org/wiki/Shannon%2…
2. Shannon’s law describes the theoretical maximum data rate at which can be transmitted over a communications channel of a specified bandwidth in the presence of noise. Very roughly speaking is the theoretical maximum “download speed” in bits per second.