Broadband Communities

MAY-JUN 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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Page 49 of 86

MAY/JUNE 2014 | | BROADBAND COMMUNITIES | 43 view the operator ofering the gigabit more favorably, even if they can't get a gigabit where they live yet." MEET CONSUMER EXPECTATIONS In venture capital circles, a "hockey stick" is the common label for the obligatory slide in startup presentations that forecasts low sales in the frst months after a product launches and meteoric growth in the following months. Even if community broadband stakeholders don't forecast hockey-stick sales, they need to consider what they will do if the hockey stick materializes. Longmont's Jordan says, "Too much success can hurt you just as much as too little. Te hockey stick looks good on paper, but with a broadband network, the people, time and equipment required to respond to a food of sales could be very challenging. Te big struggle would be with cash fow, especially for those communities that are not charging installation fees to subscribers." Ongoing cash fow can be further strained if residential take rates are high compared with business take rates. "I've been in this business for a lot of years," says Jordan, "and I fnd that customer service and tech support costs are almost always higher per residential subscriber than for each business customer, while monthly revenue is lower." A steady linear growth rate is easier to handle than an accelerating hockey stick, and communities may plan for it by educating residents that the network will be rolled out in phases or that neighborhoods will be selected by lottery. If pent-up demand is great, however, extended delays in hooking up subscribers could create animosity from the people not yet served, leaving an opening to competitors. Jordan and other stakeholders have structured a buildout schedule that reduces the chances of hockey-stick growth in favor of managed growth. Hockey-stick growth can negatively impact more than broadband operations. Some areas have a delicate balance between population size and the capabilities of infrastructure such as water treatment plants, electric grids and roads. If a broadband network fuels an economic boom that increases population and business activity, the community's infrastructure could literally collapse beneath the onslaught. Another potential problem is that a rapid change in broadband speeds can widen rather than close the existing digital divide as those who cannot aford broadband or who don't have basic technology such as computers will fall further behind the rest of the community. Communities need to be aware of and prepared for these possibilities. In a small, rural community there may be opposition to a network due to the fear of a sudden cultural divide in the face of rapid broadband adoption, though this fear isn't supported by research. Many news reports about Kansas City's Google Fiber deployment highlight the surge of young people, entrepreneurs and information workers moving into the parts of town Google has built out. Tough Kansas City is large enough that a sudden demographic shift wouldn't be noticeable right away, in smaller communities with many traditional workers or senior citizens unaccustomed to change, concern about this shift can lead to clashes. PLAN FOR THE BEST … Te needs assessment, planning and pilot project stages for a gigabit network should include a "What if we're wildly successful?" analysis. All stakeholders should be involved in this analysis, and they should look for answers in a wider context than the broadband network and its operations. Broadband afects many aspects of a community – local government, businesses, education and more – so a hyper-successful network will cause ripples in all these areas. Project leaders in Longmont, Chattanooga, Kansas City and other towns hold frequent meetings with regular citizens and community leaders that enable them to explore "what if " scenarios. If a primary goal for broadband is to impact economic development, the project team should have meetings with business leaders and IT managers from a cross-section of local companies. For example, Seattle public ofcials conducted a widely publicized drive to bring faster Internet speeds to Pike Place Market and to get most of the retail businesses there to sign up for access. Many subscribed, but ofcials were embarrassed when they discovered that the older business owners weren't using the Internet because they didn't know what to do when they gained access to it. Casting a wide net for participants in the "what if " planning process allows everyone involved with deploying the network, as well as those using broadband services, to prepare for success. "If your broadband network is not incorporated into your regional planning process and economic development plans, you cannot manage the broadband results and may just set yourself up for failure," states Chuck Sherwood, senior associate at the consulting frm TeleDimensions. Institutions such as schools, colleges, libraries and medical facilities also should be included in this planning because their early adoption of broadband and related specialized technology can create a hockey-stick efect. School districts are giving students leading-edge technology tools and increasing schools' broadband Strong consumer demand for network connections can cause cash-fow problems for a new network and generate resentment on the part of the consumers who have to wait. BBC_May14.indd 43 5/29/14 9:17 AM

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