Broadband Communities

MAY-JUN 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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MAY/JUNE 2016 | www.broadbandcommunities.com | BROADBAND COMMUNITIES | 39 In a recent study for IEC, the Digital Policy Institute (DPI) documented that the basic ingredients for broadband development, including a robust fber optic backhaul network, already exist in most rural areas of Indiana. Terefore, future investment decisions should focus on middle-mile and last-mile construction costs within each REMC territory and follow a phased strategic plan that avoids the pitfalls of some of the municipally owned broadband deployments highlighted in the study. To establish the metrics for success, we examined more than 30 companies actively engaged in deploying fber to the home (FTTH) around Indiana and reviewed more than 16 REMC broadband deployments across 11 states. To help predict costs, we applied a regression model developed by the engineering frm Vantage Point Solutions back in 2010. Te explanatory power of the formula developed was so high, with linear density alone explaining 87 percent of variance in construction costs per location, that a similar approach is now used by the FCC to predict construction costs. Based on the Vantage Point Solutions model, more than a dozen of the 38 IEC member cooperatives in Indiana, which have an average density of eight members per linear mile, are prime potential locations for both middle-mile (smart grid fber to the substations) and last-mile, FTTH broadband deployment. Tese cooperatives should be considered as possible regional broadband hubs for providing interconnect and content services to adjacent, less densely populated REMC territories. Tese top REMCs could, in theory, embark on developing a phased approach to broadband deployment for their territories, independent of federal funding. However, our research also shows that creative partnerships and consortia can help mitigate construction and operational costs for the last mile. Beyond high-bandwidth anchor institutions, such as primary and secondary schools, hospitals, government ofces and businesses, rural telephone companies are likely to have the greatest interest in partnering on last-mile construction costs. Already pressured by the loss of landline subscribers to cellular technology and increased competition by VoIP providers, the rural telephone frms are at a crossroads and have a strong incentive to become competitive in the provision of broadband services to the home. In Indiana, for example, the 32 local exchange companies that are members of the Indiana Exchange Carrier Association indicated a near-unanimous interest in partnering with REMCs to provide last-mile services in their rural territories. Te creation of an independent, not-for-proft 501(c) (12) information services corporation jointly owned by an REMC and a rural telephone company would allow profts from each phase to be later reinvested and used to underwrite subsequent phases of broadband expansion. A second group of 10 member cooperatives in Indiana with average density of six to eight customers per linear mile were deemed prime locations for potential middle-mile and last-mile deployment of fber but would most likely require federal funding for construction expenses and partnership agreements with anchor tenants and content providers. Tey might ideally interconnect through adjacent regional REMC hubs to mitigate operational costs. REMCs capable of providing hub-and-spoke services (eight members per linear mile and above) may be able to provide communications services to neighboring REMCs with lower density per linear mile. By creating a neutral, regional point of delivery (hub), an REMC can build out broadband service and leverage the assets of the hub design, dramatically reducing other REMCs' barriers to entry, capital expense and risk associated with entering new lines of business. Electric co-ops with the densest populations per linear mile could serve as the hubs for regional hub-and-spoke fber network deployments.

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