Broadband Communities

MAY-JUN 2019

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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M AY / J U N E 2 0 1 9 | w w w. b r o a d b a n d c o m m u n i t i e s . c o m | B R O A D B A N D C O M M U N I T I E S | 6 1 ACCESS VERSUS AFFORDABILITY At the heart of the debate surrounding the ordinance is one number: 100,000. at's the number of people in San Francisco – 11 percent of a total population of 884,000 – who purportedly do not have internet service, as estimated by supporters of the ordinance. At •rst blush, that might seem like a big number, considering that the San Francisco area has become an important tech hub. However, there are a few things to consider when evaluating that statistic, not least that it tells us little about where those people live and why they don't have internet. According to the Federal Communication Commission's Broadband Deployment report, more than 98 percent of people in San Francisco have access to broadband at speeds of at least 25 Mbps downstream and 3 Mbps up. Given that the infrastructure is there, the next question is service. According to the most recent information from the Census Bureau, roughly 85 percent of San Francisco's residents pay for broadband service. For the 15 percent who reported not paying for broadband, the issue is more one of adoption than access. ose residents may be unwilling or, more likely, unable to pay for the service. And although broadband a‹ordability is a serious problem, the ordinance does little to provide subsidies or other types of solutions to address that challenge. If the ordinance cannot meaningfully improve broadband internet access to the 19 percent of San Francisco's population that lives in apartments, the real debate is about whether it can signi•cantly improve transparency and choice for them. UNDERSTANDING CHOICE When evaluating providers, apartment owners have a myriad of concerns. In addition to delivering quality, reliable internet service to residents, property owners also want to ensure that certain obligations are met for customer service standards, installations, network maintenance, upgrades and service; otherwise, there could be damage to property and harm to the building's aesthetics or service interruptions that could ultimately a‹ect the property's value and residents' connectivity. A choice in providers is the industry norm because it is good for residents and good for the attractiveness of the community. In the 2017 NMHC Telecom Survey, apartment •rms reported that they had two or more service providers available at a substantial percentage of their San Francisco properties, and renters themselves acknowledge that choice exists. According to recent apartment renter preferences data, a greater share of San Francisco apartment residents have provider choice than other renters in California or even the United States as a whole. When asked in the 2017 NMHC/Kingsley Apartment Renter Preferences Survey whether they had more than one internet provider option, 69 percent of San Francisco respondents said yes, compared with 60 percent of California renters and 55 percent of renters nationally who said they had access to multiple providers. ough nearly seven of 10 apartment renters in San Francisco already have a choice of internet providers, it is important to understand why some may not. A big part of the reason is the economics of the broadband business. Building and servicing broadband networks is very expensive. Couple high costs with a highly competitive or fractionalized market, and it becomes diœcult for providers to stay in business without a way to gain scale. is is why there are often more access issues and less competition in smaller or more a‹ordable apartment communities. UNINTENDED CONSEQUENCES e San Francisco ordinance falls short in delivering on its two main promises: accessibility and consumer choice. Data show that broadband a‹ordability remains more of an adoption hurdle than access and that the majority of the city's apartment residents already have provider choice. Moreover, over time, apartment residents will lose, potentially paying more and/or receiving lower-quality service. Given how closely connectivity is tied to community satisfaction, property owners have an inherent interest in working with the most reliable providers. Destabilizing partnerships between apartment owners and providers makes it more diœcult for ISPs to become trusted, long-term partners and o‹ers apartment owners little assurance of accountability when needs are not met. With open access, incumbent broadband providers that have already invested in broadband infrastructure in apartment buildings have little FREE TO CHOOSE Nearly seven of 10 San Francisco apartment renters say they have more than one broadband service provider at their communities, according to the most recent NMHC/Kingsley Associates Renter Preferences Survey. The survey is the largest renter survey in the industry, with responses from more than 252,000 apartment renters at 4,795 apartment communities. Here's how those numbers stack up. Q: Do you have more than one internet service provider at your community? San Francisco California Total U.S. Yes, I have more than one option. 69% 60% 55% No, I have only one option. 31% 40% 45%

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