Capex Cost Of DSL: $70-400
Written by Dave Burstein   

The cost to provide DSL is usually between $70 and $400, unless new fiber needs to be run or the local exchange does not have ordinary backhaul connections.  With broadband subsidies available in many nations, the temptation to request high subsidies is very high. AT&T has just been subsidized by California based on costs of $9,000 to $22,000 per home passed in several projects. So I thought to review the basics as a guide to those spending public money.

  • DSL from the exchange: $70-$200, usually toward the low end. This is the most common deployment, which usually only requires a DSLAM in the exchange and a modem for each home, as well as under an hour to connect. Nearly all exchanges have fiber backhaul and everything else in place, whether in Cairo, Egypt or Cairo, Illinois. Completely new builds require engineering plans, subscriber authentication and billing systems, etc. but nearly all carriers have them in place already. Because cost-effective DSLAMs are available with as few as 12 ports, even smaller exchanges can be served economically.
  • DSL from remotes: $125-$300, unless new fiber/power/cabinets are needed. Outside DSLAMs need to be more rugged and hence cost more. Deployments usually serve fewer homes, which means (slightly) higher equipment costs and more labor per home connected. AT&T U-Verse is now over 18M homes passed at a cost of $300 each, which often includes new fiber and cabinets. Fiber costs can be very high if needed - $10,000 per mile or higher is typical in high wage areas, even more if streets need digging.

Those costs are for today's standard ADSL2+ equipment, which will provide 24-28 meg down over very short distances and 5-15 meg for many others. Upstream is typically about a meg, although in theory can be up to 3 meg. VDSL2, low end, is $10-30 more and can provide even higher speeds over very short distances, up to 2-4,000 feet.

DSL with repeaters: $300-400 typical. A $200 repeater doubles the distance that can be served, and hundreds of thousands, probably millions, have been installed. Many U.S. rurals have 100% coverage by using repeaters as needed.  Current units can deliver up to 6 megabits. If 5-8 megabits is acceptable, this is the cost-effective way to upgrade. Most, probably nearly all, of the homes Qwest estimates will require $1,600 to reach can be served at similar speeds with repeaters at a fraction of the cost. Up to four repeaters can be used, and they often will be cost-effective choices for all but the most extreme distances.

Summary: Unless construction is needed for the desired speeds, DSL is affordable. Telcos who claim large areas uneconomical to serve are either incompetent or lying.

I do not yet know whether the high AT&T California  represent something inappropriate or is mostly sloppy paperwork. It looks like ordinary 1 up, 10 down U-Verse, which elsewhere costs AT&T less than $300/home.  I'm pressing the PUC for more information and don't want to jump to any conclusions.