TMCnet
ITEXPO begins in:   New Coverage :  Asterisk  |  Fax Software  |  SIP Phones  |  Small Cells
 
 


Cant We All Just Get A Line?

Private and public sectors must play together to connect the disconnected.

By Tara Howard, Yankee Group

 


As the first light of dawn emerges from over the horizon, somewhere in rural America, down an old, dusty dirt road, a weathered farmer nestles in front of his antiquated computer, waiting patiently as the screen slowly fills inch by inch with news of the continued drought. Once again, the bulk of this years income will come from government subsidies. At that same moment, just outside the city limits, a teenager sits before his laptop, his eyes come alive from a flood of sights and sounds; its barely six in the morning and already hes watched the morning news, a music video, and hes downloaded a dozen songs to put on his brand new MP3 player.

This contrast of scenes, in its many forms, plays itself out millions of times each day as the disparity continues to widen between this nations broadband-enabled citizens and its economically and access-challenged. With each year that passes, technological progress provides a greater quantity and quality of broadband offerings to those with the opportunity of access and affordability. The consumers who remain outside this circle become increasingly disconnected from the flurry of advances that make communication faster and easier.

In growing numbers, municipalities across the country are working to bridge the gap, providing low-cost, high-speed connectivity to their citizens. But, in many cases, these municipal governments are going it alone, adopting the appearance of a competitive company without the experience necessary to thrive. Current service providers with their years of experience, technological know-how and knowledge base stand to provide an enormous contribution to the success of these projects. The private sector incumbent companies, however, have been slow to form partnerships and many have begun to stomp the fires of competition. The companies are fighting the process through the staunch support of anti-municipal broadband legislation, citing unfair pricing, funding options, and competition as some of the reasons why municipalities should not get involved.

Despite the lack of support from the private sector, all parties agree that affordable and ubiquitous broadband access is a benefit to all. The challenge now remains to get municipalities and incumbent service providers to collaborate to close the connectivity gap and make broadband a reality for the millions of Americans beyond its reach.

Lagging Behind
Those who believe the United States is leading the charge to bridge the digital divide would be surprised to know that according to the International Telecommunication Union (ITU), the United States ranks 16th among nations that have adopted the use of broadband. Countries not known for their technological supremacy Israel, the Netherlands, Denmark and Canada have all surged ahead in the race to ubiquitous broadband connectivity.

Travel to South Korea, where the worlds most broadband-enabled populace enjoys relatively inexpensive, prevalent connectivity, and youll find a hyper-connected society. More than 75 percent of South Koreans use broadband, which has become not only a pervasive cable-based technology, but wireless as well, with millions of citizens using broadband-enabled 3G mobile phones. The surge in broadband use over the past decade can be attributed to an initial government campaign, backed by billions of dollars in public investment, to provide high-speed Internet to educational institutions. As competition pushed prices down and availability spread, Internet-savvy consumers 50 percent of whom play online games rushed to adopt high-speed service.

Although demographics (a largely urban-centered country) and a national obsession with video games and online culture have played an enormous role in the rapid rise in Internet penetration in South Korea 3 to 75 percent in less than 10 years the prosperous Asian nation stands tall above other countries, including the United States, in providing its citizens with broadband capabilities. In 2005, its not uncommon for someone in Seoul to have a 20-megabit connection 15 times faster than a normal cable modem in the United States.

The Homefront Push
In the United States, communities ranging from the metropolis to the rural town are seeking to lessen the disproportion of accessibility and provide taxpayers with a valued and desired service are spearheading their own broadband initiatives with varying levels of success. Cities such as Denver and San Francisco and small towns such as Adel, Georgia and Nantucket, Massachusetts have all entered the ranks of communities developing municipal broadband projects and each faces its own set of challenges.

For those small communities that are often without any broadband provider, the challenges are many. Reminiscent of the push to bring electricity to rural towns in the late 1800s and early 1900s, the municipal broadband movement echoes the movement of municipalities to convince power companies to extend service beyond metropolitan areas. Not until local power utilities were formed did these communities turn the lights on, modernize, and flourish as industrious segments of society.




Helping to speed the process from dial-up to broadband, many communities are increasing their efforts to develop a network to support government, education, and public safety applications. Business development is yet another stimulus for bringing broadband to an economically stagnant or waning local economy, although profit is not always the deciding factor for developing a publicly owned infrastructure. Often, the initial development is extensive (and costly), so governments see the projects as an investment, a means for attracting more taxpaying citizens and businesses.

Entering the broadband business without private sector partnership leaves municipal governments in a difficult situation, as municipalities lack the inherent technical and business expertise needed to make such projects successful in the long run. Currently, communities seeking broadband networks whether fiber or wireless face opposition or indifference from providers who either fear the direct competition or that cant see the value of a possible partnership. While nearly all agree that the propagation of broadband can only lead to positive economic and social growth, municipalities and incumbent telecommunications operators are often at odds as to who should implement the rollout of these networks.

Two models of municipal broadband realization currently reign as the most common of options retail and wholesale. When private companies choose to pass on partnership with municipalities which is so often the case local governments adopt a retail model and become the owner and operator of the broadband facilities, as well as the provider of Internet, video, and telephony services. The municipality will generally leave the network as open access, allowing smaller providers (local ISPs or CLECs) network access while the incumbents ignore the partnership opportunity. The wholesale scenario brings a private sector provider into play, as municipalities establish the network, but lease its potential to a willing provider.

Playing Together
For community-driven broadband networks to succeed, both the private and public players will need to take responsibility. Local governments must first do their homework by assessing a number of factors. Most importantly, they should first determine the feasibility of the project, and then once viability is ensured, an evaluation of end user demand, technology choices, local infrastructure availability, and vendor selection will help in developing a strategic plan. From the private sector angle, telecommunications companies hesitant to saddle up should first accept the inevitability and long-term benefit of municipal broadband. Their involvement in these projects is crucial to the long-term success and eventual profitability and their movements to curb municipal broadband through the support of legislation will only serve to broaden the digital divide and lessen their opportunities for customer reach.

To assuage the private sectors fears of high-cost implementation, communities can dip into various funding programs such as education, public safety, healthcare, and transportation, adding value to a proposed partnership. In addition, communities can not only leverage their infrastructure rights of conduits, buildings, and fiber assets using existing utilities can often make or break community broadband networks but they can corral interest from their consumer and business constituents with various national and local organizations, including education, healthcare, and public safety.

To woo the private sector into partnership, municipalities will need to stay out of direct competition with local telecommunications companies, as well as cellular carriers, cable MSOs, and WISPs. The more a municipality can partner with these entities and leverage existing infrastructure and public monies, the easier a partnership will form and the greater the chances for successful implementation and measurable ROI. As partnerships form and telecoms warm to the municipal broadband movement, the network design will need to utilize existing technologies and equipment that take into account the areas specific needs, geography, and economics. A rural community seeking reliability and cost-effectiveness will not require the same features and functionality provided to residents of an urban center. Therefore, the private sector will need to take a more strategic look at its partnerships and its provision of technology.

Outlook
Fiber networks, especially from a cost perspective and geography, will prove a more successful venture for rural communities with the right private sector partners than a wireless solution. Urban communities find the most feasible and cost-effective solution for a successful partnership in wireless broadband. As the price and complexity of next-generation infrastructure declines, a window has opened for municipalities to build their own networks with the support of vendors and carriers. As we move forward and more emphasis is placed on bridging the ever-increasing connectivity gap, the key technology will be WiMAX.

Although strong business models and best practices dont yet exist, partnerships between the private and public sector will prove to be the lynchpin behind the development of rural and low-income communities. The existence of hundreds of municipal broadband projects loudly signals a demand for high-speed connectivity. The economic future of many communities relies on this much-needed technology. Its in the hands of municipalities and telecommunications partners to ensure that broadband becomes a reality for the millions without as this nation continues to feel the effects of the deepening digital divide. IT

Tara Howard is an Associate Analyst with Yankee Group, a global leader in providing knowledge, tools, and support to help clients make winning decisions when business opportunities intersect with technology solutions. For more information, please visit the company online at www.yankeegroup.com.

If you are interested in purchasing reprints of this article (in either print or PDF format), please visit Reprint Management Services online at www.reprintbuyer.com or contact a representative via e-mail at reprints@tmcnet.com or by phone at 800-290-5460.

[RETURN TO THE TABLE OF CONTENTS]



Today @ TMC
Upcoming Events
ITEXPO West 2012
October 2- 5, 2012
The Austin Convention Center
Austin, Texas
MSPWorld
The World's Premier Managed Services and Cloud Computing Event
Click for Dates and Locations
Mobility Tech Conference & Expo
October 3- 5, 2012
The Austin Convention Center
Austin, Texas
Cloud Communications Summit
October 3- 5, 2012
The Austin Convention Center
Austin, Texas