The telcos here are terrible. I'd love to hear how HN users would think of bootstrapping a telco?
We've had a few startups try and disrupt things in Canada (e.g., Wind Mobile). They were funded by large global investment groups and eventually simply got acquired by the incumbent telcos.
The other approach I've seen is piggybacking on existing telco infrastructure. This is required by law since the Canadian government subsidizes telco infrastructure... It's not uncommon for the telcos to renege on their contractual/legal obligations. Plus, this doesn't create any redundant networks.
So: how else can one launch a telco? What creative solutions have folks seen?
I'm thinking: VOIP-only service that has direct access to the Internet backbone in Toronto, Vancouver, etc. so you can at least have completely separate service in major cities... Or crowdfunding 5G towers (though I imagine spectrum licensing is an issue here).
Would love to hear what other HN readers think.
In my experience VERY few people in the optical networking space understand how to engineer a municipal fiber optic network - they invest thousands of dollars per customer when it can be done with best practices for well under $1k per customer (let me just say that 802.1w RSTP is your friend). You need to combine all the different ISO networking layers into a SINGLE business model (ie. physical plant and Ethernet/VLAN circuits all by the SAME engineer not by different departments, otherwise things get unnecessarily over-engineered).
Even more important than the technical engineering is the financial engineering. Once you understand you will never produce more capital from selling customers than it will cost to provision those customers, you need to consider more advanced financial engineering models - the one that worked great for the cellular industry and several optical networks is commercial paper. Find a lawyer that REALLY understands commercial paper - then every contract signed by a customer actually IS cash and does not need to be converted to cash. It's one of the only ways I know of releasing capital invested into physical plant.
Good luck!
Becoming the third player is an uphill battle in all regards. Fibre customers are very sticky, and getting people to change is nearly impossible. Bell is particularly awful as a competitor as they steeply discount the first 1-2 years: want gigabit fibre with all the TV channels and phone service for $60/month along with a $200 prepaid Visa gift card? Sure! Then month 13 comes along and the bill becomes $300 per month. As a competitor, there is absolutely no way I can offer a similar package or retain a customer when they take that package. Want that deal as an existing customer? No way!
On top of all that, Canada is a relatively small market that is very spread out geographically. If you want to provide coverage similar to existing carriers, you have to build a lot of infrastructure. Nobody can afford to do that. Plus there are buckets of cash being rained down on other market players under a number of programs, so your competitor may be running on assets that cost 50-100% below your cost to build a similar infrastructure.
The easiest thing for you to do is to get 2 internet connections from different carriers that do not share networks. In most markets the telco and cableco run different networks. My Telus and Bell services continued working fine yesterday. Heck, my 3 different Rogers wavelength services we not impacted at all (although L1 services have other failure modes that take longer to recover from since there is no automatic rerouting as with L2 networks).
I'm pretty sure you really don't want to start down this path...
It has lots of specifics about how Bell in particular will use anti-competitive tactics to hamper your business. Also, in many parts of Canada there are simply no other transport providers other than the incumbents that could transport your traffic from your community to an IXP. To stay out of trouble your best bet is usually using a company like Zayo (if you're close to CP rail lines, ex-Allstream fibre) or using incumbents outside of their residential service area (eg. using Shaw for Transport in Ontario if you happen to be close to their fibre).
I really recommend reading the entire 44 pages and then giving Benjamin a call if you have any specific questions. He's a great guy that has experience bootstrapping a fibre ISP (albeit in Ontario, not BC) and can talk about important topics such as pole attachment and dealing with hydro/Bell. I remember our discussion ending up focusing on funding issues with regards to a lack of grant or venture funding of 30+ year horizon infrastructure projects. I think we spoke for almost 2 hours.
> What creative solutions have folks seen?
The idea that the ISP I worked for was simple: you are a very strong local reseller of a big ISP in a very limited area, but you don't have the flexibility in prices and services that you want. So "my ISP" will help you: we install a complete infrastructure in your area, you will pay us a fixed prices every month and we will manage the whole infrastructure on your behalf. As reseller, you have a portal to manage new orders and a support call center to solve the issues. It worked for several years. Feel free to drop me an email if you want more details, (my username) (at) gmail (dot) com
My point is that up until this last event I was cognizant of the fact that the prices are too high, but was ok to pay for the quality I got, would have laughed in the face to anyone saying LTE coverage or speed are bad.
As a side note about the outage - I think a lot of people underestimate incompetence in large companies. I often marvel at how for example large Canadian banks are making record profits with many disfuctioning teams in critical positions - a situation that got much worse with the wave of the great resignation. If I were to bet, I’d say some incompetent team broke the infra, so there’s no need to look for conspiracy theories, people are just not competent in their positions and make mistakes when something has to be changed and they have no more excuses to avoid that change.
It's as good an example as any of the lack of real liberty that entrepreneurs have in certain industries.
See also: banking and payments.
This was the most surprising issue of the downtime. Rogers had just enough layers lit up for 9-1-1 calls to be attempted (to only fail) on its completely dark network that cell phones didn't/wouldn't failover that 9-1-1 call to the other mobile networks that were up.
I keep thinking the only way to break this anywhere in the world would be something like WiFi as a Mobile Network. Although this idea has been tried but never succeeded, practically because WiFi wasn't designed for such use in the first place. But recent improvement in WiFi 6 and WiFI 7 ( 802.11ax or 802.11be ) could solve this.
- ILEC/CLEC access - Spectrum access - HAH! https://www.canada.ca/en/innovation-science-economic-develop... it's a bit more than pocket change. - VOIP depends on ILECS
I could go on and go, but suffice to say if you don't have access to 5 million dollars for initial startup costs and then a lot more this is not something you want to deal with.
I'm on Rogers too so I get it. But there's a reason there's only a handful of ILEC in Canada. There's also a reason your cell phone only has access to a few providers nation wide.
The ss7 network is pretty damn rock solid - usually.
This seems to have been a failure at all levels: - SS7 - Network/BGP - Wireline - Wireless
This is unheard of in the telecom industry. Telecom is one of the most regulated industries in Canada - for good reason. We had teams of people just dealing with regulatory compliance issues.
Also to note 911 service is generally outsourced from the CLEC/ILEC to a couple specialized companies in Canada, it's not done inhouse.
It's the same with email. There's no email provider that has 100.0000% uptime.
I understand your outrage and I'm more than welcome to provide more details but this is not something that just happens overnight - or in 10 years.
You're obviously good with software, technology and all that stuff. Unfortunately, telecom/communication related industry is the exact opposite. It's an entirely different world, and even if you built the best shiny toys for endusers - it still has to interface with the old technology. We had lots of equipment from the 80s still running.
If you want to protect yourself in the future - use a good (non discount) voip provider in Canada who is an CLEC atleast themselves. There's a couple dozen nationwide. Most voip providers are resellers and uplink into a CLEC who then crossconnects with ILECs. The cheaper voip you get, the longer down the line you are and more things to go wrong.
Wow. Long ramble but hopefully I got my point across.
A telcom typically requires access to public resources like right of ways and airwaves, and hence their are regulatory requirements to obtaining entitlement.
And there are contracts for interconnection with other network operators.
Contracts for vertical and conventional real-estate — so you need another stable of attorneys for that, too.
Which means you need pockets so deep that cost doesn’t matter…e.g. a government contract.
Which means you need a government that wants you to do what you are trying to do.
Otherwise you won’t get the avigation easements and similar things your towers and wires need.
Good luck.
The cost of physical infrastructure deployment can shift significantly based on accessible good will. Purchasing space, requiring local permits and paying full price for equipment and person-power drastically alter margins.
It significantly depends on the deployment goals you have. If you can find deals to share infrastructure and deployment cost with other organizations (such as a power company) that can work well too, but in larger countries this kind of deal is hard won and more often fails than succeeds.
Wireless is much cheaper than cables, but has a high ongoing maintenance cost, particularly if it is deployed nearby or directly competing with other signals in the unlicensed bands. Wireless also always ends up competing with some amount of crackpot pushback for major deployments - that is not to diminish those with genuine measured concern, but there is often a vocal group that show up who represent strong positions way beyond any reviewed evidence leading to further challenge in the political space.
Telcos are actually a few parts -- there is Voice, which can be landlines or cellular, there is Data which is usually Internet but can be leased lines. Modern networks do allow a lot of overlap with these, but each of them have some bits that are very specialized and need equipment/people.
VoIP and Internet is a decent place to start. The "core" is fairly easy to do, the harder part is the "last mile". Provinces and Municipalities usually charge to allow you to use their poles or right of ways.
The most interesting idea I've heard is building a non-profit last mile with the help of your municipality. At one point Toronto Hydro had an extensive fiber network, and it would have been easy to do; but I think the city sold off Hydro and Hydro in turn sold off their fiber network.
I've also heard of getting a neighborhood together to buy a commercial tier connection, and then distributing it, but there are some details that need to be worked out to make sure this is workable.
I would say that redundant networks are precisely whats required.
Selling a government on the idea is the hard part. Actually maintaining communications links, wires or fiber etc, is apparently so trivial a challenge as to be a minority of most phone companies actual business. They spend much more effort on billing and marketing.
> But there's a reason there's only a handful of ILEC in Canada
(ILEC for those unaware are Incumbent local exchange carrier, as opposed to CLECs or Competitive local exchange carrier, once local competition was introduced) Yes, because when the Phone networks were started, it was SUPER expensive to wire them up, so the government gave MONOPOLIES away for REGULATED returns.
So, for the most part, each geographic area had one (or one main) phone company. And a few of those companies merged or were bought out as competition entered the space, leaving less than a handful.
It was felt that balancing access for exclusivity was a good trade, and it probably was. But now, "copper" landline service is strictly regulated, while Internet and Cellular are unregulated. (This is why, despite landline being super cheap to run, it costs MORE then entry cellphone plans per month).
Also, if you are going to do anything with voice, public cloud may not cut it. The reliability bar for voice services is insanely high. Sub 10ms failover between elements while preserving the voice media stream type of stuff. Five or six nines availability, or else the regulator beats the shi* out of you. This is not an outage model where your COO can put out a chatty tweet saying "sorry and heres a $10 credit."
They have nascent 5G support, and it’s all “owned by the people”.
Not a big fan of crypto shenanigans, but Helium comes as close as possible to crypto that kinda works and solves a problem.
The subtitle is "Want to build a phone company for $100? Give Mark Spencer a ring?"
YMMV because this article was published in 2006 and Digium, the parent co was sold in 2018. But the thinking about the process is still relevant and there is a book on Asterisk on Amazon....
HTH
Join with other providers like Teksavvy to help the CRTC to break up the monopoly on the infrastructure.
As demand increases, you could setup more remote ends and enough steerable array antennas can automatically re-aim and new subs will point to the new one.
Canada doesn't have a lack of competition. Canada has a lack of people willing to consider competition.
https://www.youtube.com/watch?v=HlRPLBLkZK0
Everyone I know whines about high telecom and internet prices. I know very few people willing to consider anything other than a lower price at Bell, Rogers, or Telus.
Canadians are very risk averse people.
It would probably be worth talking to one of these to find out what the real experience is like. In my experience, people will gladly talk about what they've learned.
Also, see about using StarLink.
Also, do you have ComCast in addition to the phone company? It's always good to have a backup route to the world.
1. You didn't specify wireless or wired. It matters. With wired, your biggest problem is going to be getting permission to deploy towers and licensing part of the spectrum;
2. Wired avoids this but adds the problem (and the biggest cost) of the last mile. Where do you run those cables?
a) Poles: you need permission for this and there can be a bunch of hyperlocal laws that will get in your way. For example, you may have to wait for existing telcos to move their wires up or down to make room and they'll take their sweet time.
b) In trenches: you'll need a different kind of permission for this. Local conditions may make this more of less difficult (eg there can be alot of large rocks in the soil).
3. If you run a cable from a house and on a pole or in a trench where does it go? You need some kinf of substation for this depending on the max transmission length of the cables you employ. You need planning permission for that and teh big cost of the real estate required. If it's a hole in the ground, that's less of a problem. If it's a free standing structure containing switching equipment, expect residents to fight it on NIMBY grounds;
4. Depending on where you are you may face local or state laws that restrict your ability to do any of this. Some US states have passed laws against municipal broadband (at the behest of telco lobby). Telcos may have exclusive franchises with certain areas. This has been dismantled somewhat but you may find unofficial opposition anyway;
5. You're going to need installer for all of this and people to handle all the permitting;
6. Once it's built you need people to maintain it. People will come through and cut your wires or they'll be accidents like cheery pickers running through your cables or poles going down in a storm requiring cable repair.
7. Existing telcos are exceptionally good at playing this game and are typically in bed with local politicians who will make your life difficult.
8. Will you get enough customers? Just getting permission to build something will probably lead existing telcos to cut prices and lock in consumers with 12 or 24 month contracts to starve you.
9. Do you have a TV service? If not, you're going to lose a certain number of potential customers who still want this. If you do, the price you pay scales with your size. Verizon, Comcat or AT&T pay a lot less to content providers for their TV packages than you will. Telcos like to bundle TV and Internet so you may find your customers only pay $20/month extra to add Internet to theri TV package.
10. Who do you get upstream Internet connections from? It may well be one of your local competitors. Guess how that goes.
This is a capital intensive business that doesn't reward overbuilds. The only way this can really work is with heavy cooperation from your local municpality. As mentioned there may be legal barries from them doing so (as noted, telcos don't want a repeat of Chattanooga).
This'll work best in low population centers that are underserved or not served at all by existing players. Low density housing means getting trenching permission is going to be less of a problem. Potential customers will also be much more motivated if there other options are HughestNET or DSL.
Starlink probably means even these customers aren't going to be as motivated as they would've been 5-10 years ago.
In more rural areas you may even have the option of microwave relays that'll bypass a spectrum issues and it'll be easier to permission to be a directional wireless tower on someone's boundary.
If the objective is to compete on a national scale, we're talking capital investments of something like $10 billion CDN per year. As I recall when I worked in the industry Bell was spending 5-6 billion per year on capital investments, and if you're starting now you're playing catch up, so probably need to double that for a decade or two to catch up.
And that's just capital investments, equipment, software, and cables in the ground. Can this be run way more efficiently, and with less overhead in billing systems and pet projects and the like, sure. But use these numbers just for the realm we need to be in. Let alone the people to build, maintain, upgrade, monitor, respond to outages, etc. Just to try and put that into perspective, the entire federal government spent about $440 billion last year. So we're talking a good 3-4% of the federal budget, for what one of the big 3 is spending. And keeping in mind, they have a lot of power to compete on price and features wherever you get started.
So I'm personally believe that difficult to duplicate infrastructure should be government run. It's simply impractical to go and say we'll have 5 or 10 or 15 competitors, and startups, and bankruptcies when the cables in the ground are so capital intensive. We don't run 15 power lines to each house so everyone can change on a whim. Why are we pretending we can run 15 fiber cables and do the same thing. We don't really want one new big competitor, we want a vibrant market of new approaches and failures to occur.
So set that policy tirade aside, and let's scope down our expectations from nationwide.
I get internet from a small provider, who mainly serves multi-dwelling buildings in the Toronto area. What they've been able to carve out, is a niche where it's cost effective to compete and start from. They're basically leveraging some, I think it was Industry Canada rules changes, that basically say that the telcos aren't able to claim ownership of the wiring inside a building. The provider I use, then just hired some Bell technicians, bought the same DSL remotes Bell was using for the same services, purchased a leased MPLS or similar line back to their data center to the basement of the building, and started making deals with Condo Boards and building owners to offer services. So an internet connection, DSL remote, and some technicians to terminate wires was what they needed to get started. Of course it's more complicated than this, but that's what it sort of boiled down to.
The DSL remotes have a SIP client that can create a phone connection, so you can get home phone, and they built a cheapo IPTV service with some android boxes. Give away telephone, TV and internet for free in the common areas of the building for advertising.
911 services, they just contacted with whoever provides normal 911 services for voip providers.
When I switched to them, it was cheaper than I got with an employee discount in the industry. Last year, they put fiber in, so I've got unlimited gigabit fiber for half the price or less of the big companies. The Big companies of course, now offer unpublished promotions from time to time that are only available to my building. This of course doesn't cover cellular service, but we're back to that capital intensive replication of infrastructure.
I'm glad I'm out of this industry.
Maybe there’s a fintech type disruption on the horizon.
This would be a fun project to hack on with 5-10 skilled folks with complementary skills to cover the industry, legal, financial, operational and the hardware and software angles to see what might be possible today. There have to be folks with a lot of experience in Canada that might be worth seeking out before beginning that feel exactly like you do and I would say I do too.
How much cash investment would you start with?
I’d be curious to how easy it can be for a non technical consumer today to access an mvno service that is turnkey and sells 3-4gb a month tablet type data plan (currently $10-20/mo) that can handle calls and sms via a carrier grade voip for $20-30/mo might be an interesting. It’s not new, but it’s not always easy to setup unless you’re technical. Calls are secondary to data (WhatsApp calls) these days for many. Keeping it independent of one carrier doesn’t preclude the fact that existing carriers have likely dealt with this type of approaches before. But it’s ok to start and remain small and let growth be organic snarfed across multiple providers instead of one only.
There may be something at the convergence or combination of some of the existing approaches or new tech that might be ready for the mainstream..
- Building momentum by starting as a MVNO in a segment of the market where you can secure and build demand and grow services. There are some interesting data only services out there.
- Perhaps a LoRa play. Great range. There seems to be some interesting gear that will pair Lora via Bluetooth to any phone. Software might be needed. Maybe there could be Lora beacons to assist with coverage.
- What’s possible with other open spectrums? Are there other unused spectrums that could be used in interesting ways, for exa
- Begin with cheaper 3G and now 4g networks only like new providers.
- Wifi calling overlap / voip coverage.
- Could there be a way to setup a peer routing network between devices and to their internet connections?
- Crowdsource/coop/non-profit focused on revenue and sustainability but not paying profit to shareholders. Non profit corporations do not mean mean people can’t be paid extremely well for their work. Maybe there is a meaningful social entrepreneurship angle here. Might be some funding available too to provide access to those who are priced out of the market.
- Maybe there is a way to use the enhanced networking capabilities of Linux only phones, or alternative setups.
The main problem with displacing incumbent telcos is that you need to run your own physical infrastructure - you can't really do so as an MVNO - no company will work against themselves and they will use various tactics (whether contractual, pricing-based or use technical limitations) to make sure you're not able to be "too" competitive with them.
Therefore you need your own infrastructure - we're talking leasing land, building towers and purchasing expensive radio equipment every few miles, and you need to cover the whole country before you launch because nobody's gonna subscribe to phone service that only works in a small, specific area, and even though technically using roaming to make up for coverage gaps is possible, see the previous paragraph for why it won't happen (at least not sustainably).
Then you've got the issue of spectrum. You can have all the land and towers and equipment in the world but in most countries you need to have a license to be able to broadcast on the regulated mobile spectrum. Those licenses are auctioned every so often, and the incumbent telcos are willing to throw their entire war chests at them because it's a guaranteed return over time.
We're not talking millions or hundreds of millions here (the latter is just what you'd need for spectrum), we're talking billions. This is beyond what VC will fund, and isn't a good match for VC anyway because it will take decades to recoup that investment, during which the regulatory or technological situation might change - a huge risk investors are unlikely to take without the guaranteed of fast returns (which are difficult to do if your objective is to fix what's wrong with the existing telcos rather than become just a different kind of rent-seeker).
But let's say you've got the spectrum and land? Fine, let's talk about equipment. You've basically got a handful of vendors such as Ericsson or Huawei to pick from, and they're all terrible in their own ways. The equipment extremely expensive and may not even be sold, instead merely rented to you at a large price tag. It's often full of security holes and a pain to work with - see http://2014.hackitoergosum.org/slides/day1_Hacking-telco-equ... for an example. It's also a patent minefield so building your own is extremely difficult, though if you're in a location where software patents aren't recognized, you could potentially avoid the issue by using software-defined radio "breaching" the patents in software, but you'll still have to keep a good legal team on retainer and a big "rainy day fund" because the equipment manufacturers won't go down without a fight - and that doesn't mention the actual capital and talent needed to replicate decades of R&D.
Finally, even if you've made it all the way through this and are now on a level to compete with an incumbent, they can out-compete you by selling the service at a loss, subsidized by nastiness elsewhere, whether unethical practices such as advertising or selling personal data, to outright fraud such as extra fees/charging for services not rendered/etc, knowing full well the law won't be enforced against them. This is why telcos are universally hated, but if the market prices have now aligned with the fact that it's subsidized by nasty behavior, there might be no way for an ethical player to compete.