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The Benefits of, Lessons From, SandyNet - Community Broadband Bits Episode 167

Two of the stars from our video on SandyNet in Oregon, join us this week for Community Broadband Bits episode 167. Sandy City Council President Jeremy Pietzold and IT Director Joe Knapp (also SandyNet General Manager) tell us more about the network and recent developments as they finish connecting the majority of the City to gigabit fiber.

We talk about the challenges and lessons learned along the way as they transitioned from running a Wi-Fi network in some areas of town to all areas of town to overbuilding the wireless with fiber optics.

Jeremy also discusses more of a story we recently reported on SandyNet's business services, which are the lowest cost, highest capacity deals we have seen.

Read the transcript from this episode here.

We want your feedback and suggestions for the show - please e-mail us or leave a comment below.

This show is 30 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed.

Listen to other episodes here or view all episodes in our index. You can can download this Mp3 file directly from here.

Thanks to bkfm-b-side for the music, licensed using Creative Commons. The song is "Raise Your Hands."

Want a Gig? Ask Consultants the Right Questions

For years, we have been frustrated at the tendency of communities and consultants to view municipal fiber networks as a binary decision. Should we or shouldn't we? Should they or shouldn't they? At its worst, it is framed with the most expensive approach - borrowing for a citywide all-at-once approach.

Consider this framing by a recent story in a Portland, Oregon suburb from the Oregonian:

Hillsboro officials have heard back from the consultant they hired to examine the feasibility of building a municipal fiber network that would bring high-speed, lower-cost Internet service to city residents.

The answer? Don't do it.

Stories like this make my blood boil. It is the absolute wrong question. But to delve into it, I want to abstract away from any specific consultants or approaches. This is not a failing of a single consultant, but something we have seen to various degrees from many.

Jumping ahead, the correct approach is to develop a description of the problems a community faces or wants to solve relating to Internet access. Then, examine a variety of approaches to pick the best option rather than only evaluating the single most expensive option.

Some consultants are very happy to bid a project, answer a narrow question, and then let the community go on its perhaps puzzled way. They have the list of phone poll questions, the spreadsheet full of assumptions, and final feasibility report template all ready for the next community. (We do not offer consulting services.)

Other consultants go out of their way to educate, guide, and otherwise help the community develop and achieve its objectives. These consultants may appear to cost a bit more, but actually can be much more cost effective. Some consultants bid the bare minimum, planning to charge extra later for supposedly supplemental information that is actually essential for continuing the process.

A consultant should be a guide to achieving objectives rather than simply evaluating a single, likely over-simplified question. It all starts with what questions a community asks. After doing some initial research (possibly perusing our Community Connectivity Toolkit), community leaders may be tempted to ask a consultant whether they should build a citywide municipal fiber network.

This is not recommended. Instead, we recommend developing a vision (discussed in our Santa Monica City Net case study).

What is the primary problem that needs to be solved? Hint: It isn't "how do we get a gig??" Be more specific. Common problems include poor business service availability that discourages economic development opportunities, slow connectivity, high prices (for residents or businesses or both), poor reliability, lack of access for historically marginalized populations etc.

Identifying specific problems is important because the preferred solutions for encouraging economic development will be different from those focusing on connecting low-income neighborhoods.

Having established the problems, the vision needs a sense of the opportunities from policy options. Here it is important to remember that the same technology deployed by different entities will create different opportunities. If Chattanooga had decided to beg Verizon for FiOS rather than building their own network, they wouldn't have created thousands of jobs and wouldn't have one of the best networks in the nation today. But both FiOS and Chattanooga's fiber network are technically similar. A FTTH network owned by a massive telco can have dramatically different outcomes than a FTTH network owned by a community. The tradeoff is the responsibility of running the system, likely over decades.

After establishing the problems and opportunities, the consultant should be charged with recommending paths to achieve the vision. "No" is not acceptable answer. An acceptable answer is an analysis that explains how the community can trade off cost, time, risks, and benefits. That is to say a community may decide to take greater risks in anticipation of greater benefits by borrowing significantly to rapidly build a citywide network. Or a community may decide to minimize risk with incremental investments over many years to expand conduit and fiber in the first phases of a long term plan. There are many permutations.

In the year 2015, municipal fiber is not a yes/no question. The models are many and varied - the best question is what does the community need and how motivated it is to take meaningful action.

Had Hillsboro taken this path, they would have a variety of options to discuss to solve the problems with connectivity that were demonstrated by the study. But instead, they have a document that only examined high risk, high cost approaches and found the recommended project to be "marginally viable."

If I were an elected official there, I would be examining what low cost incremental strategies could improve access to the Internet locally.

As a final thought, this is not just a problem with consultants. There are definitely elected officials who are privately happy to hear that a project is not feasible because it gives them cover to take no action. If they were already hesitant to upset power cable and telephone companies, they then have a document that "proves" the costs are too great to take any action.

Carl Junction Pulls Out of Public Private Partnership

In the spring, we reported on a public private partnership agreement between the community of Carl Junction and Wi-Fi provider Aire Fiber. According to City Administrator, Steve Lawver, the City Council had second thoughts and pulled out of the deal.

Even though the partnership has ceased to be an option, the people of Carl Junction will still have better connectivity. Aire Fiber found the interest level was so intense that it will independently deploy the equipment to serve the community's 5.6 square miles and approximately 7,400 people.

As part of the abandoned partnership agreement, the city would have paid for and provided locations to mount necessary equipment. Aire Fiber would have handled installation, management, and technical aspects needed to keep the network up and running. In exchange, the city would have received 10 percent of the gross revenue from the network. The system would have cost an estimated $400,000 - $450,000 to deploy and both entities estimated just 10 percent of the market would have allowed them to break even.

Now the city has typical water tower lease agreements with Aire Fiber. Each tower mounting Aire Fiber equipment brings in $100 per month. 

Carl Junction has been searching for better Internet access for its businesses, schools, and residents for several years. In 2012 they commissioned a feasibility study and decided in 2013 to move forward with plans for a fiber network. Unfortunately, the community had to seek other options when it chose not fund the $5.2 million project.

As a post mortem, Lawver advises other city officials to take the time to educate elected officials and not rush the process, especially when the time comes for final approval. 

Our process from FTTH feasibility to this final agreement took 4 or 5 years.  Be patient. Understand that if you get down to the final agreement there is a good chance you may be the only person left that remembers the whole process.

New Handbook on Next Generation Connectivity From Gig.U

Gig.U, a collaboration of more than 30 universities across the country has just released The Next Generation Network Connectivity Handbook: A guide for Community Leaders Seeking Affordable, Abundant Bandwidth. The handbook, published in association with the Benton Foundation, is available as a PDF online.

One of the authors, Blair Levin, has been a guest several times on the Community Broadband Bits podcast, last visiting in January 2015 to weigh in on public vs. private ownership of broadband networks. As many of our readers know, Levin was one of the primary authors of the FCC National Broadband Plan in 2010.

In a PCWorld article about the report, Levin commented on funding and on local control:

“Nearly every community we worked with saw public money as a last resort, when no other options for next generation networks were available,” he said. “But our group view was that the decision should be made by the local community.”

The report underscores the importance of local decision making authority, whether each community chooses to go with a municipally owned model, a public private partnership, or some other strategy.

Levin and his co-author Denise Linn also address issues of preparation, assessment, early steps, things to remember when developing partnerships, funding issues, and challenges to expect. They assemble an impressive list of resources that any group, agency, or local government can use to move ahead.

Add this to your library.

The Next Generation Connectivity Handbook: A Guide For Community Leaders Seeking Affordable, Abundant Bandwidth

Publication Date: 
July 21, 2015
Blair Levin
Denise Linn

Gig.U, a collaboration of more than 30 universities across the country has just released The Next Generation Network Connectivity Handbook: A guide for Community Leaders Seeking Affordable, Abundant Bandwidth. The handbook was published in association with the Benton Foundation.

The report underscores the importance of local decision making authority, whether each community chooses to go with a municipally owned model, a public private partnership, or some other strategy.

Blair Levin and Denise Linn also address issues of preparation, assessment, early steps, things to remember when developing partnerships, funding issues, and challenges to expect. They assemble an impressive list of resources that any group, agency, or local government can use to move ahead.

LUS Fiber "Ask Me Anything" July 14th 1:30 p.m. CDT

The community of Lafayette voted 10 years ago this month to create its own municipal FTTH network. In doing so, they created a standard that other communities have tried to emulate. On Tuesday, July 14th at 1:30 p.m. CDT, City-Parish President Joey Durel and LUS Fiber Director Terry Huval will host a Reddit Ask Me Anything about the initiative.

This is a great opportunity to learn about the community's vision, mobilization efforts, and the way it overcame challenges to create a highly successful municipal fiber network.

Prepare your questions and join the conversation at

Here is your video invitation from Terry Huval:

See video

Lessons Learned from Community Outreach in Gilberts, Illinois

Earlier this year, we reported on the Village of Gilberts, Illinois, where voters defeated a measure to approve general obligation bonds for a municipal network project. Our story got the attention of Bill Beith, Assistant Village Administrator from Gilberts who contacted us to talk about the project and provide detail on their efforts to educate the voters prior to the election.

The project would have raised property taxes 1.8 percent or approximately $150 per year on a property with a $250,000 market value. Even though the network would have been a publicly owned asset, Beith believes the idea of any new taxes defeated the measure. As the community considered the project, voters stated repeatedly that Comcast or one of the other incumbents should pay for deployment of infrastructure. Unfortunately, the Village had approached incumbents who had no interest in building in Gilberts. They felt the investment would not pay off in a community that is home to about 6,800 people.

The proposed project was to be deployed along side a private fiber network. When the developer of a new housing development learned that fiber significantly increases the value of real estate, he chose to include it to each new home. He also chose to bring the network to a nearby school along with several public safety and municipal facilities at no charge to the Village. 

The project on which voters denied funding would have extended fiber to the rest of the community. According to Beith, the developer still plans to continue his fiber build in an incremental fashion. In addition to the homes in the new housing development, he will focus on commercial connectivity in the Village of Gilberts.

Even though the measure failed in April, the Village will continue to explore ways to work with the developer. According to Beith, he and other advocates for improving connectivity in Gilberts walked away with some valuable lessons for the future.

Ultimately, timing played an important role. Because referendum rules precluded the Village from advocating a position on the project, Beith felt their ability to share the potential benefits was compromised. If the Village needs to ask a similar question to the voters in the future, they will begin educating the public long before the referendum question is determined.

Beith also believes that the citizen Facebook page could have played a more instrumental role if it had been developed earlier. He found that it became a place for online debate and felt that, if it had been up and running earlier, advocates could have used the forum as a way to address arguments or misinformation early in the process.

The Village created and Beith believes that branding the idea of the network was a good way to introduce the initiative to the public. They also posted some basic videos to provide basic information on connectivity. If they had offered videos earlier in the process, the Village could have presented a waider range of material. Beith noted that they were also restricted in what links the the Village could provide and could only offer factual resources that did not advocate for or against the project.

According to Beith, the Village held an open house where they provided live demonstrations of 300 Mbps Internet access via fiber, a pair of 4K big screen TVs and eight assorted devices streaming simultaneously. Approximately 50 or 60 people attended the open house but Bill described the atmosphere as skeptical. It is his belief that the people attending the open house were undecided while those that stayed away had already determined how they would vote.

The Village of Gilberts must wait two years until this issue can be presented to the voters again. Beith is hopeful that by that time word will spread that access to fiber is unsurpassed and demand will grow. Many things can happen in two years and, as we have seen in other communities, it often takes several attempts for referendums to pass.

The Challenge of Open Access - Lessons Learned Part III

To finalize our series on reflections from Seattle and Gigabit Squared, I discuss open access networks and how the requirement that a network directly pay all its costs effectively dooms it in the U.S. Read part one here and part two here. I started this series because I felt that the Gigabit Squared failure in Seattle revealed some important truths that can be glossed over in our rush to expand access to fast, affordable, and reliable Internet connections.

The benefits of public-private-partnerships in these networks have often been overstated while the risks and challenges have been understated. We have seen them work and believe communities should continue to seek them where appropriate, but they should not be rushed into because they are less controversial than other solutions.

Sometimes we have to stop and remember that we will live for decades with the choices we make now. It was true when communities starting building their own electrical networks and is still true today. I hope the series has provided some context of how challenging it can be without removing all hope that we can stop Comcast, AT&T, and others from monopolizing our access to the Internet.

In this final piece, I want to turn to a different form of partnership - the open access network. I think it follows naturally as many in Seattle and other large cities would be more likely to invest in publicly owned fiber networks if they did not have to offer services - that being the most competitive, entreprenuerial, and difficult aspect of modern fiber networks.

Chattanooga construction

The desire to focus on long term investments rather than rapidly evolving services is a natural reaction given the historic role of local governments in long term infrastructure investments. Fiber certainly fits in that description and as many have noted, the comparison to roads is apt. An open access fiber network allows many businesses to reach end users just as roads allow Fedex, UPS, and even the Post Office, to compete on a level playing field.

In an open access approach, the local government would build the network out to connect all residents and businesses but not directly deliver services. Instead, multiple independent Internet Service Providers (ISPs) would compete on the network for business, ideally specializing in different niches - some providing great video game optimizations and others focusing on meeting small business needs.

Unfortunately, there are reasons we have not seen this approach gain widespread traction. The model is more difficult than is readily apparent.

A large part of the difficulty comes from incumbent providers that refuse to use the fiber network. The cable and the telephone companies claim that they don't want to abandon their assets, but that is not the main reason they have refused to participate in these networks. The big cable and telephone companies know that they have terrible reputations and would be slaughtered in a competitive market - so they put great effort in ensuring that they face as little competition as possible. Allowing the open access market to develop would all but ensure mighty Comcast would have to compete against local providers that offer much better customer service, lower prices, and more.

From an economic perspective, an ideal open access network would be one physical fiber network on which all ISPs compete. With a take rate over 80 percent, the revenue would likely be sufficient to pay the costs of building the network, operating costs, AND the ISP costs. But because the cable and telephone companies have fought against open access, subscribers are often split among three different physical infrastructures (cable, copper telephone lines, and the fiber network), generating too little revenue to pay the costs of building the fiber network.

If a major metro area does a feasibility study to build a citywide open access network fiber, it will find that the network will almost certainly not pay for itself using a conventional private sector accounting system. The interest on the debt required to build the network accrues faster than revenue. Of course, the roads and bridges don't pay for themselves via user fees either, but we still invest in them.

Community BB Logo

In a recent podcast, we discuss how over the first five years, a network can save more in aggregate for the community that it costs to build. But those benefits acrue individually to households. Thus far, very few communities have used this approach - to raise monthly taxes by $3 to save $10 on household telecom bills, for instance. Leverett is a rare example of this approach.

That does leave another option - building an open access network incrementally, as Danville has done in Virginia and Palm Coast FiberNet in Florida, among others. This is a viable option for just about any community but comes with the difficult reality that connecting everyone could take decades. And there are still other gotchas.

Some communities that wanted to build an open access network have found it can be challenging to find service providers that will operate on the network. Sometimes a local ISP can step up, as in Danville and in other cases, but not always. Until a network has thousands of potential subscribers, ISPs may not be interested in offering services. But incremental approaches will often start with just tens or hundreds of subscribers.

We have written elsewhere of how important it is to have at least one strong, trusted provider on the network. An important lesson from Provo, among other places, is the difficulty in recovering once a network has a bad reputation. A bad provider can ruin the name of a perfectly good network, especially as most people will not know whether to attribute any problems to the physical network or ISP.


All of that said, open access offers a tremendous promise. Networks like UTOPIA and Chelan PUD (Washington) have been unable to pay the capital cost of building the network solely from revenues but offer some of the fastest speeds in the nation at a fraction of the price we pay elsewhere. I recall the testimony of a local business to the Utah Legislature who basically said, "Yeah, my taxes went up a little -- but my monthly telecom bill went down a lot."

Nonetheless, nearly every municipal fiber network has been built and financed with the expectation that it would pay for itself - generally breaking even years after the high upfront investments have been made. Each community should be free to choose what expectations it has in building the network it needs to ensure a vibrant economy and high quality of life for everyone. Our role has been to help them understand that choice and push back on those who want to take it away. I hope this series helps in that effort.

Many of the municipal fiber networks that now directly provide services started with a hope of working with a local partner or building an open access network. As they considered their options, they found they effectively had to choose between doing nothing and venturing into a very challenging business.

There are few easy answers for communities stuck with subpar Internet access, or even for those that regard "par" as unacceptable. When Lafayette Mayor Joey Durel was presented with the idea of a municipal fiber network shortly after taking office, he was skeptical. But he ultimately decided they should examine it - saying "shame on us" if they didn't at least see what they could do. Maybe they would hit a brick wall... or maybe they would build one of the most impressive broadband networks in the country. That was good advice.

No one solution works for every community. Thus our guiding philosophy: communities should be free to choose for themselves the solution they prefer.

Construction photo courtesy of Chattanooga Electric Power Board

Seattle, Gigabit Squared, the Challenge of Private Sector Cable Competition

This the second in a series of posts exploring lessons learned from the Seattle Gigabit Squared project, which now appears unlikely to be built. The first post is available here and focuses on the benefits massive cable companies already have as well as the limits of conduit and fiber in spurring new competition.

This post focuses on business challenges an entity like Gigabit Squared would face in building the network it envisioned. I am not representing that this is what Gigabit Squared faced but these issues arise with any new provider in that circumstance. I aim to explain why the private sector has not and generally will not provide competition to companies Comcast and Time Warner Cable.

Gigabit Squared planned to deliver voice, television, and Internet access to subscribers. Voice can be a bit of hassle due to the many regulatory requirements and Internet access is comparatively simple. But television, that is a headache. I've been told by some munis that 90% of the problems and difficulties they experience is with television services.

Before you can deliver ESPN, the Family Channel, or Comedy Central, you have to come to agreement with big channel owners like Disney, Viacom, and others. Even massive companies like Comcast have to pay the channel owners more each year despite its over 10 million subscribers, so you can imagine how difficult it can be for a small firm to negotiate these contracts. Some channel owners may only negotiate with a provider after it has a few thousand subscribers - but getting a few thousand subscribers without good content is a challenge.

Many small firms (including most munis) join a buyer cooperative called the National Cable Television Cooperative (NCTC) that has many of the contracts available. But even with that substantial help, building a channel lineup is incredibly difficult and the new competitor will almost certainly be paying more for the same channels as a competitor like Comcast or Time Warner Cable. And some munis, like Lafayette, faced steep barriers in just joining the coop.

FCC Logo

(An aside: if we are going to pretend that competition can work in the telecommunications space, Congress and/or the FCC have to ensure that small providers can access content on reasonable terms or the ever-consolidating big providers will be all but unassailable by any but the likes of Google. Such regulations should include rigorous anti-monopoly enforcement on a variety of levels.)

Assuming a new provider can secure a reasonable channel lineup, it now needs to deliver that to the subscribers and this is more complicated than one might imagine. From satellite dishes to industrial strength encryption to set-top boxes, delivering Hollywood content is incredibly complicated.

When confronted with this challenge for its Kansas City network, Google evaluated all the options and decided the only option was to build its own technology for delivering television signals to subscribers. Google has the some of the best engineers on the planet and even they encountered significant challenges, suggesting that route is ill-advised for new companies. Even if Google were willing to share their approach, it was written for the Google eco-system and would need significant porting to work for other firms.

Several of the recent triple-play municipal FTTH networks used Mediaroom, a technology developed by Microsoft that was recently sold to Ericsson, which has strong connections with AT&T. All of which suggests that delivering television channels is not becoming easier for small, local networks.

From the tremendous challenges of securing television channels to the difficulty of delivering them to subscribers, investors are aware of the mountain a new entrant has to climb before even starting to compete with a massive firm like Comcast.

Longmont Power and Communications Logo

It remains to be seen whether a network delivering only Internet access (or with telephone as well) will succeed today, but most have believed that television is needed to effectively compete for subscribers (and generate enough revenue to pay for the network). Longmont is bucking that wisdom in deploying a gigabit and phone network throughout its footprint north of Denver and many are watching intently to see how it fares (our coverage here).

The main lesson from Part II of our Seattle Gigabit Squared analysis is the difficulty of a small firm competing against a massive cable company like Comcast and the subsequent reluctance of most investors to fund such firms.

This is not to say it is impossible for small entities to compete, especially entities that can handle a distant break-even point or justify its network by the many indirect benefits created by such an investment - including more jobs, lower prices for telecommunications services, and improved educational opportunities to name three (see our recent podcast on this subject). In most cases, the kinds of entities that are willing to include indirect benefits on their balance sheets in addition to cash revenues are nonprofit entities.

We strongly support the right of communities to decide for themselves how to ensure their residents and businesses have the connections they need to thrive in the 21st century. We also recognize that many cities, particularly the larger metro areas, would prefer not to directly compete with some of the most powerful firms on the planet, even if they are also tops among the most hated. Few local governments relish the opportunity to take on such a new challenge and understandably search for firms like Gigabit Squared that can assist them, reduce the risks of building a network, and shield them from charges of being godless communists by think tanks funded by the cable and telephone companies.

However, we are not optimistic that many communities will find success with this public-private-partnership approach. Indeed, with recent news suggesting that Gigabit Squared left at least $50,000 in unpaid bills behind, the risks of going with such a solution may indeed be greater than previously appreciated.

It is for the above reasons that we continue to believe most communities will be best served by building and operating their own networks, though some may choose to do so on an open access basis where multiple ISPs operate on the network.

That is where we will turn in the final segment of this series. Read that post here.

Big City Community Networks: Lessons from Seattle and Gigabit Squared

A few weeks ago, a Geekwire interview with outgoing Seattle Mayor Mike McGinn announced that the Gigabit Squared project there was in jeopardy. Gigabit Squared has had difficulty raising all the necessary capital for its project, building Fiber-to-the-Home to several neighborhoods in part by using City owned fiber to reduce the cost of building its trunk lines.

There are a number of important lessons, none of them new, that we should take away from this disappointing news. This is the first of a series of posts on the subject.

But first, some facts. Gigabit Squared is continuing to work on projects in Chicago and Gainsville, Florida. There has been a shake-up at the company among founders and it is not clear what it will do next. Gigabit Squared was not the only vendor responding to Seattle's RFP, just the highest profile one.

Gigabit Squared hoped to raise some $20 million for its Seattle project (for which the website is still live). The original announcement suggested twelve neighborhoods with at least 50,000 households and businesses would be connected. The project is not officially dead, but few have high hopes for it given the change in mayor and many challenges thus far.

The first lesson to draw from this is what we say repeatedly: the broadband market is seriously broken and there is no panacea to fix it. The big cable firms, while beating up on DSL, refuse to compete with each other. They are protected by a moat made up of advantages over potential competitors that includes vast economies of scale allowing them to pay less for advertising, content, and equipment; large existing networks already amortized; vast capacity for predatory pricing by cross-subsidizing from non-competitive areas; and much more.

So if you are an investor with $20 million in cash lying around, why would you ever want to bet against Comcast - especially by investing in an unknown entity that cannot withstand a multi-year price war? You wouldn't and they generally don't. The private sector invests for a return and overbuilding Comcast with fiber almost certainly requires many years before breaking even. In fact, Wall Street loves Comcast's position, as penned in an investor love letter on SeekingAlpha:

We're big fans of the firm's Video and High-Speed Internet businesses because both are either monopolies or duopolies in their respective markets.

Seattle Conduit

Seattle has done what we believe many communities should be doing - investing in conduit and fiber that it can use internally and lease out to other entities. This is a good idea, but should not be oversold - these kinds of conduit and fiber projects are typically deploying among major corridors, where the fiber trunk lines are needed. But networks require far more investment in the distribution part of the network, which runs down each street to connect subscribers. With this heavy investment comes the modern day reality that whoever owns the distribution network owns the subscriber - that owner decides who subscribers can take service from. (We have more conduit tips from previous Seattle coverage.)

Additionally, different conduit and fiber segments may be owned by various entities, including different departments within a city. This may introduce administrative delays in leasing it, suggesting that local governments should devise a way of dealing with it before a network is actually being deployed.

Even if a city wanted to lay conduit everywhere for the entire network (trunk and distribution), it would need to have a network design first. Different companies build different networks that require different layouts for fiber, huts, vaults, etc. Some networks may use far more fiber than other designs depending on the network architect preference. The result is a limit on just how much conduit can/should be deployed with the hope of enticing an independent ISP to build in the community.

In deciding the size of conduit and where to lay it, different types of fiber network approaches are either enabled or disabled (e.g. GPON vs Active Ethernet). In turn, that can limit who is willing to build a fiber network in the community. The same can be true of aerial fiber, attached to utility poles.

Investing in conduit and/or fiber along major corridors may go a long way to connect local businesses and some residents but almost certainly will not change the calculations for whether another company can suddenly compete against a massive firm like Comcast.

And paradoxically, beginning to connect some businesses with fiber and a private partner could make a citywide system less feasible. The firms that are prepared to meet the needs of local businesses may not have the capacity nor inclination to connect everyone. But without the high margin business customers among neighborhoods, a firm that wants to connect neighbors may struggle to build a successful business plan. Additionally, some firms may only be interested in serving high end neighborhoods rather than low income areas.

Community BB Logo

This is a major consideration in our continued advocacy for community owned networks. They have an interest in connecting businesses as the first step in connecting the entire community. An independent ISP may only find it profitable to focus on the businesses, though some ISPs share our values of ensuring everyone has access.

In the first Geekwire interview, Mayor McGinn returned to his original position when campaigning - that the City itself should be playing a larger role and investing its own resources rather than pinning its hopes on distant firms.

McGinn noted that “we haven’t given up on the private sector,” but said that if he were continuing as mayor, he’d start garnering political support to build a municipal fiber utility. That’s actually something the mayor considered back in 2010, after a consultant recommended that the City find a way to build an open-access fiber-to-the-premises communication infrastructure to meet Seattle's goals and objectives.

A feasibility study looking at one particular way of building an open access fiber network put the cost at $700-$800 million. However, there were other alternatives that they did not pursue, opting instead for a far less risky (and with far less payoff) public-private-partnership with Gigabit Squared.

Over the next few days, I will explore other lessons. A review of lessons from today:

  • Comcast and other cable companies have tremendous advantages that other would-be competitors in the private sector will generally fail to overcome
  • City owned conduit and fiber helps to encourage competition but is subject to significant limitations
  • Communities should invest in conduit in conjunction with other capital projects but should not inadvertantly weaken the business case for universal access

Update: The Gigabit Squared deal with Seattle is officially dead. Part II of this series is available here.