Broadband Communities

AUG-SEP 2014

BROADBAND COMMUNITIES is the leading source of information on digital and broadband technologies for buildings and communities. Our editorial aims to accelerate the deployment of Fiber-To-The-Home and Fiber-To-The-Premises.

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AUGUST/SEPTEMBER 2014 | www.broadbandcommunities.com | BROADBAND COMMUNITIES | 13 succeeded in changing public opinion by educating citizens about the economic and social benefts of high- speed broadband. Some states now actively support municipal broadband projects. For example, in Illinois, Gov. Pat Quinn launched a competition that will award up to $4 million in funding to ultra- high-speed broadband deployment projects as part of the Illinois Jobs Now! economic development program and has aready funded several networks, including those in the cities of Aurora and Evanston. MUNICIPAL UTILITIES Municipalities are more likely to become broadband providers when they are already in the business of providing electric power. Citizens in these municipalities are already used to the idea of government-provided utility services. Many public power utilities were set up in response to the failure of the private sector to deliver adequate services, and residents accept that government might set up public communications utilities for the same reason. In most cases, citizens have had positive experiences with their municipal utilities and are prepared to buy additional services from them. In addition, public power utilities already have back-ofce operations, such as billing and customer service, needed for providing telecom services. Finally, public power utilities are increasingly building communications networks for smart-grid applications; once they begin planning these networks, they often realize the networks are suitable for purposes such as business or residential broadband. Municipal utilities that distribute Tennessee Valley Authority electricity have been in the forefront of combining smart-grid and telecom applications. In some cases, such as Wilson, N.C., the city operates a municipal electric utility but set up the telecommunications utility as a separate entity or department. A few cities, such as Salisbury, N.C., do not have municipal electric utilities. WHO ARE THE CUSTOMERS? Cities often begin by installing institutional networks to serve municipal ofce buildings or utility substations, then extend fber to commercial buildings or business parks, add multiple-dwelling-unit properties and greenfeld residential developments, and fnally reach single-family households and small businesses. Te list shows deployers at various points along this path. Fifty-four of the municipal networks, or more than one-third, deliver fber services only to businesses, and several others serve mainly businesses. Many of these also deliver residential broadband services via cable or wireless. A few fber networks that began as business-only, such as Gainesville Regional Utilities in Florida, now serve residential customers in MDUs or greenfeld developments, and several, such as nDanville in Virginia and Cedar Falls Utilities in Iowa, built out fber to residential customers citywide. However, other municipal providers that once planned to follow a similar path, such as Ashland Fiber Network, have been stymied by lack of funding. WHOLESALE OR RETAIL? Municipalities are more likely than private deployers to allow third-party providers access to their networks – either because state laws require them to do so, because they do not have the expertise to provide services themselves or because they want to offer a wider variety of services than they could provide on their own. Twenty-nine municipal networks either allow or plan to allow multiple retail service providers to deliver services. Twelve others have contracted with a single third-party service provider to deliver services (some of these are open to additional service providers). Some municipal providers have both wholesale and retail strategies. For example, ECFiber was conceived as an open-access network but is offering retail services until the network grows large enough to attract other providers. Urbana- Champaign Big Broadband, originally a retail provider, recently announced a partnership with iTV-3, which will expand the FTTH network and deliver services to both old and new customers. Certain states, such as Utah and Washington, prohibit municipalities from providing retail services. Tis can pose a problem for municipal fber deployers at startup, when third-party providers (especially for residential services) may not fnd joining the network worthwhile. OTHER PARTNERSHIPS At least 13 municipal fber systems contract with third parties – local exchange carriers or other network operators – to operate their networks. Such partnerships (which also exist in the private sector) can be helpful for municipalities without experience operating telecommunications networks. On the other hand, like any critical outsourcing contracts, they must be intensively managed. Several such arrangements have ended abruptly or even resulted in lawsuits. Some municipalities have formed agreements with real estate developers that allow municipal providers to build fber in new buildings or developments or to provide fber backbone and services if developers build the local access infrastructure. New partnership Cities often begin by connecting municipal facilities with fber, then extend their networks to serve businesses, followed by MDUs, new developments and other residential areas.

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