Gigabit has quickly become the new gold standard for broadband services. After the beauty contest for cities held by Google Fiber, and their decision to deploy first in Kansas City, communities everywhere now want these services. Combine this with successful, large-scale FTTH projects by municipal electrics in places like Bristol VA, Lafayette LA, and Chattanooga, TN — and the question of whether communities and consumers need Gigabit ceases to matter anymore. They want it.
But how does a community get there? Google has cherry-picked only a few towns to experiment with. Most communities don’t have municipal electric companies. And less-than-Gigabit services from the private-sector, like Verizon FIOS and AT&T U-Verse, are confined to the suburbs – or denser, more affluent areas. What options exist for the thousands of communities that remain?
Communities that lack the tolerance for financial risk, access to capital, or technical and operational abilities to build their own network often turn to public private partnerships (PPPs) — and the challenge then becomes how to attract a partner, and how to structure the terms of the partnership to balance public benefit with investment return.
Universal service goals often end up on the negotiating table. Can universal service for these kinds of networks be achieved? Is it good policy to mandate that all neighborhoods and businesses be served by these new advanced services? I will argue here that it is not, and here’s why:
- In most cases, these projects require expensive over-builds of copper networks. A nationwide buildout of FTTH has been estimated to cost $140B – more capital than is likely to be invested by the public and private sectors combined in the coming years. Even if a provider makes the investment in FTTH, they often end up sharing the market with legacy services like DSL and cable, and those legacy services are often “good enough” to water down the business case for overbuilding where the economics are already challenging.
- In areas like Kansas City where Google’s fiber deployment has been prioritized according to demand, even neighborhoods that failed to meet their pre-registration goals have benefitted collaterally. For example, consider the work of the KC FreedomNetwork, a nonprofit wireless internet service specifically designed for low-income households. The deployment of Google Fiber in the more high-demand areas opened the door for other individuals and organizations to mobilize around serving the lower-demand areas. Is this perfect or ideal? No. But it’s better than an alternative where a requirement to serveall neighborhoods would have resulted in Google not deploying in any neighborhoods.
- Early, targeted Gigabit experiments provide value to the overall market by providing a laboratory for experimentation. Even though these deployments are often not universal, they do provide opportunities for early-adopters, engineers, hackers and many others to uncover the next breakthrough applications that exploit gigabit-speeds. Once discovered, these applications may pave the way for new revenue streams that encourage FTTH investments in lower-demand areas. When PCs were introduced in the 1980s, not everyone had them. In the end, it wasn’t regulations and mandates that drove millions of consumers to prioritize PCs — it was the creation of killer applications like WordStar and Lotus 123.
Broadband is a necessity, but when it comes to advanced services like Gigabit, communities should not lose the opportunity to be a part of the experiment because they can’t reach every home and business immediately. That would be making the perfect the enemy of the good.
There are great examples where these approaches are being used by communities that would otherwise certainly be left out of the move to Gigabit. Consider the nine communities in Mississippi that were selected through a very innovative program by CSpire, a large independent mobile operator. CSPire’s FAQ on the program clearly states that “There will be a $10 pre-registration fee. The fee may be refundable if we do not build your specific location, or applied as an account credit if we do. Pre-registration is required to determine the neighborhood(s) to build first.”
Deploy-to-demand is quickly becoming the model for advanced FTTH gigabit-speed services. CrowdFiber™ helps communities and service providers organize their projects, aggregate their demand, and prioritize their investments. Get started by creating a new campaign here.