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US Fibre Projects: Go-Aheads Omit the Major Telcos

Henry Lancaster

As the recent Senate vote on gun reform legislation has shown (wherein 42 of the 45 dissenting senators had recently received donations from gun industry lobbyists), getting things done for the good of the people is a hard task where legislation is concerned. It has been thus with the US's broadband infrastructure for years.

A number of states have legislated against community broadband networks, often resulting from the lobbying efforts of the main telcos affected. State Legislatures commonly pass bills revoking local decision-making authorities from communities, effectively making them dependent on the dominant cableco and DSL provider. The National Institute on State Politics has made a clear connection between industry contributions to politicians and hamstrung bills restricting competition to these telcos.

Following the success of Google's FttH offering in Kansas City, the FCC has promoted the so-called 'Gigabit City Challenge', aimed at encouraging broadband providers and state and municipal officials to provide communities in each state with a 1Gb/s service by 2015.Yet alternatives to the major telcos is gaining ground. Following the success of Google's FttH offering in Kansas City, the FCC has promoted the so-called 'Gigabit City Challenge', aimed at encouraging broadband providers and state and municipal officials to provide communities in each state with a 1Gb/s service by 2015. These would serve as hubs for innovation, and act as regional drivers for economic growth. Thus far there are more than 40 gigabit communities in 14 states. As part of its support, the FCC is holding workshops on best practices to lower costs and develop greater efficiencies in building the networks. In tandem with municipal efforts, the GigU initiative has helped develop gigabit networks in a number of university campuses.

The prospect for increased municipal involvement has improved with Google's expansion of its 1Gb/s service to Austin, Texas and Provo, Utah, where (in a change from its other deployments) Google acquired an existing municipal fibre-optic system (iProvo, set up several years ago, palmed off to a series of investors and largely hobbled by difficulties which included restrictions imposed by the local telco). The network is currently connected to less than a third of premises, but the job will be completed by Google, which will also upgrade the network to be on a par with those in Kansas City and Austin. It is expected that the same subscriber offer will prevail: a 1Gb/s broadband service for $70 per month, with the option of TV for an additional fee, and with a Google Nexus 7 tablet thrown in. Free broadband at a scaled-down speed may also be provided if subscribers pay an installation fee.

Google has looked at partnering with other municipalities that would reach hundreds of thousands of people across the country.

Many of these municipalities, as well as rural communities, are either developing new schemes of looking anew at earlier schemes. New schemes include United Services' 'United Fiber' FttH network in rural Missouri, while Palo Alto is looking to rekindle its longstanding effort to build a citywide fiber network. In its earlier incarnation, the fiber project was hobbled by the economic crash which led to the withdrawal of a partnered consortium and the nervousness of the city fathers to subsidise the scheme. Yet the city by the end of 2013 is expected to have accumulated $17 million in its project fund. The mood has become far more favourable, partly due to the encouragement from developments elsewhere. If other cities can work on delivering FttP as a community service and economic driver, and as a side benefit provide free WiFi, then why can't we?

Despite the obstructionism of the main telcos in realising municipal and rural broadband schemes, the can-do attitude which the US is known for is encouraged by developments thus far, and the snowball effect will be harder for telcos to stop.

By Henry Lancaster, Senior Analysts at Paul Budde Communication. Henry is also a contributor of the Paul Budde Communication blog located here.

Related topics: Access Providers, Broadband, Policy & Regulation, Telecom

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