Darkstrand Still Dim

December 24th, 2008 by · 1 Comment

GigaOm has a nice article today on the troubles faced by the bandwidth startup Darkstrand in these ugly credit markets.  Darkstrand has always been an enigma to me.  The company's plan has been to use fiber from the National LambdaRail project to build a backbone, and to market the service to corporations that consume lots of bandwidth.  Straightforward, yes?  Why do I find it puzzling?  Well, don't get me wrong, I love networks and one more just makes life more interesting.

It's just that I've heard this somewhere before.  We had lots of intercity fiber networks with little physical difference back in the bubble days.  The only ones that survive today in any meaningful form are the ones with appreciable metro assets to give them decent margins, and Darkstrand doesn't have any.  And the customers they are targeting are the same ones almost everyone else does.  The raw Tier-1 intercity bandwidth market is just a really hard place to play, differentiation tends to look great on powerpoint slides but nowhere else.  So I'm skeptical, but I'm open to being proved an idiot, it has happened before and will happen again.

For now though, it has to be really tough just to get started, to have a credit crunch just when you need to lay out capital to build and grow a network from scratch is just plain painful.  The company is trying to start service at the end of January, and I wish them luck!

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Categories: Internet Backbones · Internet Traffic

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  • iSiS says:

    I agree Rob. I really do not see the value add in a new carrier right now, especially if they are going to sell Transit. Are they prepared to make margin in a “very sub $10/Mbps” market? I think its amusing now when carriers try to sell me on the quality of their network. You’re a bit pushing commodity people! The only thing I care about is 1) Capacity to eyeball networks 2) How strict your peering policy is. If GLBX and LVLT will play in the $4 range, which they will, then new guys like Darkstrand better be ready to play a level below. $3 anyone?? Can I get $2.75?

    As far as transport and L2 services, what is going to differentiate them? Going back to Level3, they are desperate for revenue now that their margins are taking a hit, and XO is selling waves for pennies on the dollar.

    If someone from Darkstrand could shed some light on what their strategy is, I’d love to hear it. But even with capital concerns aside, this is a terrible, terrible time to get into this market.

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