Tag: "economics"

Posted May 13, 2009 by Christopher Mitchell

Municipal and industrial organizations that want to take advan­tage of the significant benefits of large-scale broadband infra­structure face the option of whether to build, own and operate their own infrastructure or “rent” services from incumbent cellular providers. In this paper we lay out the substantial business and technical benefits that are associated with organizations opting to own the latest generation of outdoor wireless networks.

This paper is targeted primarily at municipalities and discusses how a wireless infrastructure can benefit public safety, fire and EMS, and city departments such as water and building inspec­tions. Other wireless utility applications such as Advanced Meter­ing Infrastructure (AMI) or Automated Meter Reading (AMR) are also presented. This paper also examines wireless applications for mobile workforces engaged in industrial applications, such as port operations, construction and mining.

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Posted April 30, 2009 by Christopher Mitchell

San Francisco has launched an initiative to provide wireless access everywhere in the city. A number of Supervisors and residents have raised the possibility of the City following in the footsteps of over 200 other U.S. cities that already own information networks. To date, the City has not addressed that question, or at least no such study has been forthcoming.

Media Alliance invited the Institute for Local Self-Reliance to investigate the economics of a publicly owned information infrastructure. This report contains a preliminary financial analysis. Without complete information from the City, the numbers are not precise. But we think this analysis could serve as the basis for an informed discussion. We urge the City to undertake its own more detailed examination and make it public.

Posted April 30, 2009 by Christopher Mitchell

A new report by the Institute for Local Self-Reliance argues that a publicly owned information infrastructure is the key to healthy competition, universal access, and non-discriminatory networks.

“Localizing the Internet: Five Ways Public Ownership Solves the U.S. Broadband Problem” notes that high speed broadband is becoming ever more widespread. But, it argues, the way in which that broadband is introduced may be as important as whether it is introduced.

Many telecommunications companies are offering to build a citywide wireless or even wired network at little or no upfront cost to the city. That arrangement is especially attractive to local elected officials who fear that government lacks the expertise to manage a high tech network and who worry about the possible impact on their budget. “This is an excellent time to remember to look that gift horse in the mouth,” maintains Becca Vargo Daggett, the report’s author and the director of the Institute’s Telecommunication as Commons Project.

“Even deals framed as coming at no cost to the city require the public sector to enter into extended contracts to pay millions for their own services over the new privately owned network. Cities owe it to themselves and their citizens to carefully evaluate the costs and benefits of public ownership.”

Ms. Vargo Daggett also notes that cities that own infrastructure like roads and water pipelines should not fear owning the physical information network. “Concerns about obsolescence are overstated. Fiber optics is the gold standard, with essentially unlimited capacity and a lifespan measured in decades. Wireless technology is rapidly evolving, but its price is low and the payback period is short.”

Moreover, unlike investments in traditional infrastructure, an investment in information networks can generate a significant return. “The investment will not only pay for itself, but can generate revenue that can pay for other important municipal services.”

Posted April 30, 2009 by Christopher Mitchell

Much misinformation has been disseminated about Burlington Telecom (BT).

Here are the facts. BT is a city department of Burlington, Vermont, which owns a fiber-to-the-home network and offers triple play services (phone, cable, internet). The network depends entirely on subscriber revenues and is not subsidized in any form by the City. BT has saved the City money while being built entirely with investor money -- no tax dollars have been or will be used.

BT continues to add subscribers and has a take rate above 40% in the area it first began offering services.

Update: BT has encountered some serious problems following some questionable activities by the Mayor's Administration. I have covered some of the BT developments here.

ILSR issued a report in 2011 that updates this case study: Learning from Burlington Telecom: Some Lessons for Community Networks

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