Broadband Communities

MAR-APR 2016

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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68 | BROADBAND COMMUNITIES | | MARCH/APRIL 2016 INDUSTRY NEWS Google Fiber Huntsville Deal Could Remake the Broadband Market In February 2016, Google Fiber announced that, for the frst time, it would lease municipal fber to deliver broadband services in a city. Though municipal networks have made similar deals with private partners for a decade, Google's entry into this market is a game-changer. By Blair Levin / Brookings Institution T he announcement that the municipally owned electric utility in Huntsville, Ala., will lease its fber lines to Google Fiber could transform how municipalities provide broadband access. To understand the implications, some background is necessary. Huntsville, like many communities, wants a next-generation network. As its utility was planning a fber network for its own purposes, it decided to allow third parties to lease spare fber, adopting a dark fber model. Communities such as Champaign-Urbana, Ill., Westminster, Md., and Holly Springs, N.C., have already pioneered similar transactions. What makes the Huntsville news potentially transformative is that the service provider is Google Fiber. Google Fiber has already roiled the market. Before it entered the feld, the wireline market structure had comfortably settled into a harvest strategy. Both cable and telco Internet service providers focused on harvesting broadband revenues – one with a premium product, the other with a value product – from networks designed to allocate scarce bandwidth rather than investing to provide next-generation broadband. Google Fiber provided a taste of a network designed to deploy afordable, abundant bandwidth. Tis caused incumbents to change their tune from saying no one wants gigabit speed to bragging they will provide it. Google Fiber also changed the way cities viewed their policies afecting the cost of network deployments. To the cities' credit, they improved their policies for both Google Fiber and incumbents. Google Fiber, however, has rolled out slowly. It takes a long time to build a fber network from scratch, and if, as Google has done, one manages every project, scaling can take decades. Six years after Google's initial announcement, the number of homes passed is still small. A NEW PATH TO SCALE Te Huntsville model changes Google's path to scale as it potentially decentralizes construction eforts to multiple cities. Further, it represents the frst efort by a major company to decouple ownership of a fber network from provision of Internet services, potentially forcing both incumbents and other tech companies to rethink their strategies. Te model also provides cities a new tool to accelerate the delivery of abundant bandwidth to residents. One can see a number of entities – cities, construction companies, fnance companies – joining forces to construct, and in some places complete, dark fber networks far faster than Google Fiber has been doing with its current model. Te new model also allows a

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