Folks in Ammon, Idaho, are now getting choice, speed, and affordability from their new municipal Fiber-to-the-Home (FTTH) network. Home owners are making the switch and waving "bye-bye" to the burdens of a broken market for the benefits of publicly owned infrastructure.
Out of 369 homes in the first district, 239 have signed up to be connected to the open access network; 22 installations are complete. Installations are on hold until winter is over, but the city’s Technology Director Bruce Patterson expects to add more as people experience their neighbors’ fiber service.
In order to connect to the network, homeowners pay for the cost of the installation themselves either with a $3,000 direct payment when the project is completed or through a special property assessment over a 20-year period. Property owners who don’t want to be connected aren’t obligated to pay. Residents or businesses connected to the network then choose an Internet Service Provider (ISP) from those offering services over the network infrastructure. The network’s technology makes switching providers a simple task that can be done online.
ISP Like It, Too
Ammon makes it easy and inexpensive for new providers to offer services on their fiber as a way to encourage competition. Ammon told the Post Register:
“We tried to make sure the barriers to entry were as low as possible to encourage competition,” Patterson said. “There’s the potential for market disruption. If somebody else can get to you cheaper and present a better economic number, they have the potential to disrupt the marketplace, which is better for all of us.”
With more providers to choose from, rates are more competitive and providers go the extra mile to satisfy their subscribers. Brigham Griffin is marketing director for Direct Communications, one of the ISPs operating on Ammon’s network. Unlike the large national networks that tend to shy away from competing directly with other providers, the environment balances out for his company.
“That competition cost is offset by higher margins because we don’t have the technology to install…How does a provider really differentiate itself if everybody’s on the same fiber network? The challenge now is not defined by what media we are using; it’s now what experience does the customer have. Everything’s going to be differentiated by customer service and other technical features about your Internet service,” Griffin said.
Ammon Needs The Ammon Model
What kind of experience do people in Ammon have with their national ISPs? Even before the FTTH network is complete, the take rate for the network in Ammon is just under 70 percent. As Patterson put it in a recent Next Century Cities guest blog post:
[O]ne might initially suspect that Ammon is underserved or overpriced considering the demand for municipal fiber. Investigation reveals that nothing could be further from the truth according to a National Broadband Map that has not been updated since 2014. Researching what is available today in Ammon shows that residents have a gigabit cable provider, as well as another wireline provider advertising ‘up to 40 Mbps’ along with no fewer than six wireless providers all capable of providing ‘up to 25 Mbps’ and all at competitive monthly rates.
Even though there is some choice in Ammon, people are willing to pay $3,000 to install fiber. Why? People are emigrating from the broken market established by the traditional national providers and switching to the community’s publicly owned Internet network because:
What they want is COST TRANSPARENCY (to know and understand who they are paying for what), CHOICE (in speeds, packages and providers), and reasonable DELIVERY OF WHAT THEY ORDERED. Too often their broadband experience has been similar to comparing the billboard image of a meal with what you pull out of the sack after the drive thru.
The Market Has Spoken. The Market Is Broken.
In Ammon they’re doing something about that broken market. People of the community are receptive because they know doing something about it is a critical step. Jeff Klinger, a local cybersecurity researcher, is one of the first to sign up for installation. Klinger has been using the network since December, signing up for 1 Gigabit per second (1,000 Mbps) symmetrical access from one of the providers on the network for $109 per month.
“I’ve lived in a lot of places — Maryland, Hawaii, Germany — and this is by far the best, fastest and most reliable internet I’ve had,” Klingler said. “This is the future.”
For more on Ammon’s model, check out our other coverage and our video.