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App-Rising.com covers the development and adoption of broadband applications, the deployment of and need for broadband networks, and the demands placed on policy to adapt to the revolutionary opportunities made possible by the Internet.

App-Rising.com is written by Geoff Daily, a DC-based technology journalist, broadband activist, marketing consultant, and Internet entrepreneur.

App-Rising.com is supported in part by AT&T;, however all views and opinions expressed herein are solely my own.

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April 2, 2008 11:46 AM

Thoughts on the Partial Success of Muni-Broadband

While I'm working on parsing through my notes from the talk on the state of fiber in Japan, I wanted to share another thought that's stuck with me from Freedom 2 Connect.

Most of the focus of the talks on the open fiber panel were about the successes being realized by municipalities deploying full fiber networks.

But afterwards, in chatting with some of the panelists it became clear that while great success has been realized in deploying fiber, that making the most of that fiber once it's in place is still more promise and hope than reality.

For example, in talking with Dirk about Amsterdam, he admitted that even within their limited initial deployment of 40,000 that take-rates have been somewhat underwhelming, not yet living up to their initial projections. He associates that with the public either not being aware of what's available or being wary of whether or not the network can deliver. Not because the network has shown any sign of not delivering, but because this is all so new that it's just taking time for some people to get their heads around trusting that the government has built a reliable network, let alone understanding what the benefits of a full fiber network are.

Also on the panel was Tim Nulty, who helped revitalize the fiber project in Burlington, Vermont and is now working on bringing the model he developed there to a coalition of 25 other communities in Vermont. In terms of take-rates, schedule, and financial solvency, Burlington has been a huge success. But that network was built to be open access, so that any service provider could buy bandwidth from the city to ride their network. When I asked Tim about who's jumped onto the network and what cool things are happening, he admitted that not much yet has. He did say that local innovators are starting to wake up to what's possible, but that they haven't realized any great success stories yet.

This is hardly the first time I've heard about a municipal build that has yet to realize upon the full promise they set out to deliver. UTOPIA is a perfect example of this as they've spent more money to reach fewer customers and realize lower take-rates with fewer service providers on their open access network to date than was originally envisioned.

But you know what? I don't care. In the end, these are still all success stories to me.

Why? Because more fiber got in the ground.

It is troubling, though, that consumer adoption of fiber still lags in some areas and that service providers have not shown any eagerness to ride these new networks.

To me, the biggest problem with muni-broadband is that there's no one proven model for how to do it. Everyone's doing it differently and trying to learn as they go along what works and what doesn't. Making matters worse is a public that is still coming to understand what "broadband" means let alone fiber, and a competitive marketplace where in many communities there are already two other competing providers fighting for consumer dollars.

While the future of muni-broadband is not yet certain, ultimately I don't have a problem with any of the outcomes it may bring about:

- It succeeds in capturing enough marketshare to sustain a business and provide new competition to spur the private sector to invest and innovate.

- It fails to create a sustainable business model, and then a private operator can buy up the public assets on the cheap and we'd still have a full fiber infrastructure in place.

- It succeeds wildly well and eventually puts the private sector out of business by providing better service and value.

In truth, the outcome that scares me the most is the third. Government isn't particularly well-known for its capacity for innovation. Making matters worse I see full fiber networks as being natural monopolies. I shiver to think how well it's going to work to have the government be my only option for telecom services for the next 20 years.

But the thing is, so long as these public networks offer private service providers the opportunity to hop on the network, then it's not stifling innovation it's creating an environment in which innovation can thrive and prosper.

Ultimately the truth of the matter is that if we're going to realize a full fiber future any time soon the only way we can do that is with some form of government intervention. Whether that's incentivizing private deployment, funding public, or something in between or wholly different, fiber won't get to every home in America without it.


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Comments (2)

check out the new system just approved by the city council in Powell, Wyoming. Ernie Bray is the MetroNets consult on it.

Posted by Steve Shea on April 2, 2008 9:58 PM

Looking for that one-size-fits-all model? Geoff, I rarely disagree with you but when I do, I leave a comment =)

Looking for that one model is a mistake - it is like asking what is the best pair of shoes for a human? Communities vary. Needs vary greatly. Assets vary. The best model is the one that works. I don't think you will ever get "one" muni model that will work.

As for government monopoly - that is a bad outcome. Monopoly is bad. Of course, government monopoly at least has to take citizen input. AT&T;, Verizon, and Comcast are far less democratic than any local government. We can overthrow out local government to change things - the chances of a Comcast coup are far less.

I believe community ownership offers the best hopes for the networks we need but I certainly don't expect the private sector to disappear. Whether acting on publicly owned systems or private, I suspect we won't have fewer choices in the future. Jeez, I hope not.

Posted by christopher mitchell on April 4, 2008 1:33 PM

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