The Best Municipal Broadband Strategy - Just Lay Conduit

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In Portland on Monday after my panel I was chatting with fellow panelist Jim Stegeman, president of CostQuest Associates.

While his presentation dealt with the cost of deploying wireless 3G nationwide, during our follow-up conversation we got into the topic of how much it costs to deploy fiber. That's when Jim shared a stunning number with me: fiber only costs $1 a foot while putting in the underground conduit that it needs to run through can cost $13-14 a foot, with that number varying based on the characteristics of the areas in which it's being deployed.

The reason laying conduit's so expensive is because of the labor it takes to dig up the streets, put in the conduit, and then cover it back up again. The actual cost of the conduit itself isn't all that high.

What that also means is that once the conduit's in the ground, the cost of laying fiber can be reduced dramatically, orders of magnitude cheaper.

So imagine this: what could happen if we started having cities lay conduit whenever they're ripping up roads for other reasons, like upgrading the sewer system?

There are many reasons why cities have to rip up roads, and once they're ripped up there isn't all that much additional cost that would be needed to put in conduit.

And once that conduit's in place, it would dramatically reduce the cost, time, and complexity of deploying fiber.

Plus, if cities needed to recoup their investment in conduit, they could likely charge whoever comes in to lay fiber for access to it. Of course they wouldn't want to charge too much lest they dissuade private investment, but I'd think there'd certainly be enough there to have the deployment of conduit pay for itself.

By doing this, cities can improve the economics of any public or private deployment of full fiber networks. So much so, in fact, that I'd bet at least in some communities it would shift the balance sheet so dramatically that it might cause incumbents who are currently sitting on the sidelines when it comes to deploying fiber all the way to the home to get up off the bench since now the economics of these endeavors become much more feasible.

So if you ask me what's the best broadband strategy for any municipality, I'll say that it starts with making sure you don't miss the opportunity to lay conduit whenever possible, thereby setting the stage for improving your chances of getting wired with fiber in the future.

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Montreal, Stockholm and many cities have been doing this for years. It also provides a nice revenue stream to the city and it wins praise from incumbents and new entrants alike

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I've pushed for this but cities get pushed back sometimes. I've heard that Public Works rarely open streets for long enough stretches to make laying conduit worthwhile and that they rarely go deep enough to lay conduit. Finally, there is the issue of who is responsible for the conduit.

I would love to hear from those who have successfully pursued this strategy - how did they get around or over the obstacles to actually lay conduit?

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This page contains a single entry by Geoff Daily published on July 24, 2008 4:18 PM.

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