Topic: [prequel] IOU.CANOPY -- WiFi Internet Extension (based on DSL) in Rural Areas (Read 2589 times)

There is an extremely weak (practically unusable) 3G signal. Zero to one bar.

Have you considered 3g/4g internet?

Do you get 3g at your loaction?

Something like http://www.broadbandblue.com/

The whole thing I love about this is, if you see something you want you go after it! I am 100% american dream and this is it all the way. To bad the ISP got scared and sent you something lol or we could be seeing the kludge high speed service coming to your area soon!

Cool project. 

Its funny how much their tone changed when you sent them your proposal.  Note to self: next time a big company tells me they can't give me something, send them a business plan describing how I'm going to compete with them and see if they make a counteroffer 

I guess I'll wait and see if next week changes those proposals... 

Followed by:

"Ben,
 
My name is [scraped] and I have been told that you are looking for reliable service at your Parma Address and have been asked to try make this happen for you. Our engineering and construction team has given me the cost to build the 1000’ of cable to your address. I am now confronted with the task of getting options for you regarding reliable service. I will have this information to you on Monday as I will work all weekend to make it work on my end one way or the other. I will have a proposal for Monthly service options and the monthly cost for each service on Monday.
 
Thank you very Much!
 
Sincerely,
 
[scraped]
[scraped]
Medium/Enterprise Business Division"

Interesting response from major national ISP... I sent him my proposal to ensure I wouldn't be stepping on toes. This is the response I received:

"Hi Ben,

This is not a proposal we can support. I have my engineering team reassessing the cost of expansion for a future, expedited rollout.

I am also exploring the feasibility of offering a T1 service to you now. At $480/month it is more costly than our new high speed satellite offering that will get you 7 to 12mg.

Regards,

[scrape]
Vice President & GM
Michigan
[scrape]"

I'd like to buy in at least a 20% stake, so if startup costs end up being $50k, I buy $10k worth, and deslok'd still just have $2k worth. Since the ISPs have stated they won't be providing service at least within a year (I assume this means getting service is a very remote chance), it sounds fairly safe from competition. In the event that someone moves in, I'd be pleased, and the venture would liquidate. I can see what I can find used, instead of purchasing everything new. I don't believe there should be significant risk to investors so long as I get service usage pledges PRIOR to offering the service. This also allows me to write up much more solid investor documentation prior to launching the security. I do the footwork, provide the results, map out what would seem the ideal configuration, THEN offer it up to investors. I don't want investors taking a shot in the dark. Getting pledges also allows me to quickly find new opportunities if a customer drops the service because I'd plan on having too many interested customers and not enough bandwidth. Failing that, this venture doesn't launch.

Self-financing could work,and seeming probably what I'll end up doing (but, hey - I get free ideas by opening the door!), but I'd have no interest in selling at that point, and I definitely don't want to sell equity, since that'd expose me and investors to extreme legal/regulatory risk. The bonds could carry a fixed buyback value, and could have a set date of maturity a couple years in the future. Or, it could function more like equity and not have a fixed buyback date. I don't have interest in limited liability, because as you imply, it's higher-risk for investors, and opens up the door for extreme moral hazard -- it'd be DBA sole proprietorship, just like everything else I offer.

Here's what I'm thinking is reasonable right now:
50mbps/10mbps line from Comcast, leased/transmitted 15 miles away from my house, with 9 40-mile-rated Canopy satellites. Keep in mind these come with two satellites -- it's a kit. I seek out "clusters" of people, have the 900MHz signal sent to a "receiving" satellite there, shared with an omni which can produce a usable "n" signal within a one-mile radius (NLoS, ideally).

Startup Costs:
Canopy kits - $3,000*9=$27,000
Tower - $5k?
Omnis & compatible routers - Paid for by customers (slight markup on routers), cost shared with neighbors
Gratuity to deslok - $2k

Ongoing costs:
Cable line leased - $200/mo (incl. fees)

Revenues:
$20/mo per customer for the first 3 months, $35/mo each month after. Assuming 50 customers, that gives $1k/mo rev for first three months, and something between $1k and $1.75k/mo after three months.

Startup cost total: ~$30-50k
Monthly profit total: ~$800/mo for first three months, ~$800-1,550/mo after, significantly more if bandwidth is oversold (within reason!).



@INV: Cell data signal is unusable out here. Really, nothing serves the area except dial-up and satellite.
@racer: That might be what I end up doing. I could go ghetto with it, put a WokFI unit up in someone's tree.

There is one problem I only just thought about.... snow. There's a LOT of snow out here. The satellites would need to be heated, or have some other solution for the snow. I do not know how significantly it will impact performance, either. It'd probably be a better idea to do what racer suggests, where I can understand the process better before going full-retard.

Do you know someone in the service area who will let you piggy back of their internet through wifi?  If you could get that going(could probably be done with less than 200$ hardware) you'd basically have your own dsl connection.

I am not a pro in the area but maybe...... mobile broadband? Like virgin for 50 dollars a month? Seems cheaper and easyier

Feasible, yes. But...

Yes, you're underestimating startup costs.

As a one-off, especially one that you're passing 120% (minus liquidation value) of the risk to bond holders  if the venture should fail (for 75% of the reward), I'm not so sure it'd be a great investment. (If your investment is a purchase of the bonds, then that risk is on the market, and not privately held by you, so though you're accepting some risk, you could trade that risk on to another party) . As it stands you're taking 25% + 16.67% = 41.67% of the profits. (and paying out another 16.67% upfront for consulting) - I'm not sure if that's better than you and your help taking a cash USD salary, but the apparent risk-reward for bondholders seems high.

I'm also growing increasingly wary of 100% (or 120%!) publicly funded projects. These do not have a track record for producing IMO. When the operator has no personal financial stake, the venture seems to carry more risk. I'm also very wary of unspecified floating rate bonds. There could be 0 profits, and thus no reward. If the yield, or yield calculation was known upfront (rather than a percent of profit) it might be more interesting. But, then - the venture wouldn't have any known means of repaying the known rate before it had revenues, so the bond would be a pretty low-rated bond (and thus require a high known interest rate) - despite your otherwise excellent personal ratings, I'd consider this a  high risk loan, and yet it has no known actual interest rate. I'd be much more interested in a personally financed or angel financed startup followed by an actual equity deal.

Most importantly, a single PoP isn't very viable economically long term - it won't provide enough user base to sell off when a bigger player moves in, and won't be revenue funded sufficiently to be secure against competition to hold onto the small user base it has when alternate technology is available to that base. The (equipment) liquidation value is near nil, as with mining, unless you have a significant user base to sell off.

 A single PoP isn't terribly difficult but if you're to grow the business, it will require considerably more experience. What experience does deslok have? What community connections do you have to get the word out about your service?

My brother & I have a great deal of experience building out ISPs (he runs a wireless shop in Montana) - from planning & growth management, to design, to (back in the day) complete outsourcing. At the very least we'll be watching this issue closely. If you do intend to grow it, I'd definitely like to talk to you in more detail.

Sent email to GNS with a very crude sketch, requested contact from Comcast. Going to go dig holes, then probably try to work on door-to-door flyer tonight and tomorrow (tomorrow'll be busy for me). I plan to start leaving them in folks' doors on Monday.

I think I'm underestimating up-front cost. It sounds like one Canopy "providing" satellite does ~3mbps. I don't think it could do multiple connections, so I'd need something like 9 satellites on one tower for 50 customers @ 500kbps reliably. 9*3=$27k upfront + tower + omnis. However, with >$800 profit/mo, that's still not too terrible. Idunno. GNS will set me straight. Many areas could probably do with cheaper LoS satellites if we install a big tower. Those nearby could thus receive significantly higher speeds, but I don't want people further out left in the cold (especially since that'd include me).

I can confirm Hughes net sucks. Every time I go out to my parents to visit I'm subjected to it. They get a 250mb a day allowance with one day rollover. If they go over they can buy these 'tokens' that cost 5 dollars each and replenishes the allowance back up to 500mb (2 days limit.) Ping is anywhere between 800-1500ms and they get on paper 1.5bmps but its more like 1mbps. Upload is terrible, I once tried to upload a 2mb photo and it took 20 minutes.

The reason they can offer such shitty service is because they have a monopoly here, no other choice other than dial-up which is no good for www these days. This is in rural WV. Luckily they might get cable sometime in the next two years! Hurray for then!

I recently subscribed to HughesNet. It's shit. Really offensive shit. 700 ms ping, 300 kbps (1.5mbps advertised), harsh 350MB/day bandwidth cap, flaky signal even on clear days - at $80/mo.

It's bullshit, and I have four weeks to cancel prior to facing $400+ in cancellation fees. DSL stops servicing about a mile West of me. I've contacted upper-management for the nearest DSL provider in my state, and he (in a relatively non-weasely manner) stated they have no interest in expanding service to my area, and I'll admit he came off as genuine in his desire to service my house. He stated they'll have a... guess...(!) satellite option coming soon to keep potential customers until they expand in well after a year. Fuck that. I live in the present, not 20 years in the future.

The solution? Canopy satellite connections. I've talked to someone knowledgeable in the field, and this seems like the best option. We can go up to 40 miles out without LoS -- so it penetrates trees like I penetrate my wife's dresses while repairing hems. The connection should be a reliable 2-4mbps with minimal flakiness. Latency addition is a mere 15ms. So... ~150ms + 15ms = 165ms -- that's a lot better than 700ms for satellite. HughesNet advertises users can access their email in "seconds." I don't have 10 seconds to wait for each freakin' email to load. I don't have 10 seconds for each image to load. I can't wait 10 seconds each time I change a formula in one of my Google spreadsheets. I can't. I won't. A solution is required, and it sure ain't satellite.


I propose a Canopy satellite be placed ~10 miles away from the nearest Frontier (DSL provider) CO. These are spendy -- ~$3k without installation. IOU.CANOPY (formally, IOU Canopy Connections) will lease land at a high elevation roughly that distance away from the CO in exchange for a free internet connection for that land-owner. The DSL connection should be around 10-15mbps at that distance from CO. The signal's beamed to a primary receiver, and then rebroadcast to omnis as necessary. The cost of omnis is passed onto consumers as an installation fee. We're up-front. No bullshit -- no "we know best." Consumers will know their options. They can spend $200 for a better signal, or try to manage with 2 wifi bars. At any time, they can "upgrade." It's cool. It's fine. Do what you want, but know your options -- I don't guarantee a shit connection will do something unreasonably fantastic, but you can try if you want. No sign-up fees. No late fees. No "Fair Use" terms buried in page 7 of your ToS agreement. No lifetime service contract. Fuck that. I'm tired of shit businesses. Users get one chart and a one-page contract. Fuck the rest. Users should understand what they're doing, not trust assholes to have customers' best interest at heart.

I envision offering a 2mbps max "burst" connection, and a 500kbps reliable connection. Thus, we will be able to service between 20 and 40 customers. I intend to charge $19.95/mo for service. Wait -- hold on, now. That looks bad if you have access to DSL, cable, or even FiOS, perhaps -- but keep this in mind - there are only two other ISP alternatives out here: dial-up, or satellite. Let's compare (excl. promo rates):

Dial-Up:
Cost - $40/mo ($10 for ISP, $30 for antiquated landline service)
Advertised Throughput - 56kbps
Real Throughput - 30kbps
Latency - ~150-350ms
Bandwidth cap - Usually none, though sometimes there are "minute limits."

Satellite (Hughesnet as example):
Cost - $70-180/mo
Advertised Throughput - 1500kbps
Real Throughput - 300kbps
Latency - 600-1000ms
Bandwidth cap - 250-600mbps per day

IOU Canopy Connection:
Cost - $19.95/mo
Advertised Throughput - 500kbps (2mbps burst)
Real Throughput - ?? (keep in mind, we will not oversell where customers should be able to notice)
Latency - 150-200ms
Bandwidth cap - None


Making sense, now? Startup costs, I estimate will be between $5k and $15k. This range will narrow as I proceed with planning. Assuming I can snag 30 customers at $19.95/mo, that's $598.50/mo. The DSL line should cost less than $200/mo I do not believe there will be any problem finding 30 households interested in this opportunity, and I will be gathering pledges prior to collecting money for this venture. I think it's fairly conservative to expect $400/mo profit on $5k-15k upfront. Regulatory bullshit could cause unforeseen expenses, keep in mind. I've already contacted my state's manager of the nearby DSL company over whether or not this will violate ToS, and maybe he'd be kind enough to tell me about other rules I might be violating.


If I decide to go through with this, I intend to offer 1.2x as many bonds as there are dollars required for estimated start-up. I will purchase $2k worth of IOU.CANOPY. Additionally, I will receive 25% off the top as my time will be offered to IOU.CANOPY at a free rate (this includes installation, maintenance, acquiring customers, accounting, etc). Assuming $10k estimated start-up costs, then, I will issue $12k worth of bonds, of which I'll buy $2k worth, give $2k worth to my consultant (deslok), leaving $8k for the public. Face value will be $1 in BTC-equiv at time of IPO. Unlike BDK/IOU, IOU.CANOPY will keep books using USD, not BTC. Dividends will be 50% of profits (after my cut), leaving 50% for IOU.CANOPY to expand and improve service. (IOU.CANOPY is a floating bond similar to how BDK is structured -- there is no explicit equity granted, but bond-holders receive profits similar to if they owned equity and receive a fixed amount in case of liquidation, to which I'd be personally liable) Thus, shareholders (incl. myself) will receive 37.5% of profit, IOU.CANOPY will receive 37.5% of profit, and I will receive 25% of profit.

Assume, then, $400/mo profit. Shareholders receive $150/mo, IOU.CANOPY receives $150/mo, and I receive $100/mo. This results in a shareholder annual %RoI (using my initial, very rough, guesstimates) of 15%. Once established, things will go smoother... I'll understand the market better and raise rates to appropriate levels, have usage graphs to look at, and look at expansion if things look good. I'd guesstimate (based on no hard evidence) that by 2018, annual %RoI over face value (dividends, only) will reach 30%. IOU.CANOPY will expand as opportunity presents. Similar to IOU, I am permitted to inject cash into IOU.CANOPY or front cash as a "free" loan, though I'm not allowed to issue bonds to myself for that (but I can buy and sell bonds freely on the open market). I'll go into more technical crap when the "real" thread is up -- buyback conditions, liquidation liabilities, dividend "rollover," yada, yada, yada.



TO DO:
[1]*Finish discussion with FTR employee, make sure I'm not violating ToS. Figure out line lease price. (3-10d)
{Propane, refrigerator, stove, bed arrive -- install. Also install new siding, further sand entrance door. Notarize closing rep. statement for house in Erie. Trees need to be planted.}
[2]*Advertising campaign seeking usage pledges. Flyers will be drawn up, given to everyone who'd be in range. (2-3d after [1])
     [2.a]*In free time, write up more formal ToS.
{T.L. will arrive to inspect skylight and give quote on basement windows. Contact State Farm about getting insured after T.L. is satisfied. Find a riding mower, yet?}
[3]*After 20 households pledge, contact GNSWireless about exact configuration options. (2-4d after [2])
{Good time to derp about. You paid BDK.BND dividends, right? What's Pirate up to?}
[4]*Draw up detailed map with satellite position suggestions, keeping in mind where most dense amount of pledges are. Present to Deslok for improvement. (1-3d after [3])
     [4.a]*Announce IOU.CANOPY will exist, and guesstimate price/share, give better estimates.
{Smoke cigars, drink hard liquor, talk like a badass.}
[5]*Further consult with all involved parties, give time for IOU.CANOPY to be "digested," lease land from high-elevation land-owner in exchange for free ISP connection (4-8d after [4])
{More cigars. Also, more derping about.}
[6]*Launch IOU.CANOPY, purchase equipment. (0d after [5])
{No time for derping. Go directly to [7]}
[7]*Wait for equipment to arrive (4-8d after [6])
     [7.a]*Derp about, wonder what the Hell I've done.
{Already derping. Derp, derp, derp.}
[8]*Install, configure equipment (1-4d after [7]) -- At this time, I can cancel my shit satellite service.
{Fuck satellites. Oh. Wait...}
[9]*Formally sell to customers, install additional equipment (10-45d after [8])
{I hate people, and I want to enter 30 strangers' houses? I guess I moreso hate talking to people without something to offer them. It seems pointless -- I'm already content.}
[10]*PROFIT?
{God, I hope my son doesn't become a philosophy major. Or psychology... Might start theorizing about why I talk to myself in parenthe-brackets. Well, it has a purpose, I just like to soft-sell everything. Fuck - he could have a theory about that, too...}


Total (rosy) guesstimated time from initial planning to "maintenance mode": 27-85 days



Idunno. Sound feasible? Interest? Suggestions? What business do I have running an ISP? None, really. I do think I've underestimated potential, here, but I'm sure I'm making this out as far too simple than it'll be. Everything's always more complicated when you involve others, and this involves a relatively high amount of collaboration. Cheers,
Ben


ETA: After looking at Frontier's site better, it's looking like 7-12mbps down, 768kbps up, which is far lower than I'd like, though they charge ~$100/mo for that. Comcast serves nearby, too, and would be worth considering. I'll contact them, too.

ETA2: Comcast offers far superior options. 12mbpsdown/2mbpsup $60/mo, 22mbpsdown/5mbpsup $100/mo, 50mbpsdown/10mbpsup $190/mo, 100mbpsdown/10mbpsup $370/mo.

With 50 down, we could do 50-100 households, no problem, though obviously, we'd need a lot more hardware... but if customers pay for it... it's "free."