Pipeline Publishing, Volume 3, Issue 4
This Month's Issue: 
New Frontiers 
download article in pdf format
last page next page
Last Mile Blues:
Taming the Most Unpredictable Frontier
back to cover

article page | 1 | 2 | 3 | 4

attract 2-3 times the business development of unlit communities.  The second municipal business driver is that local residents are impatient to get the biggest, fastest pipe they can – anyway they can; and since they can influence local government easier than big companies, they are banding together to get last mile connectivity.  Lastly, municipal government services themselves will be greater consumers of bandwidth, particularly for wireless access to security cameras, police, fire and rescue.  Homeland security is actively paying for these upgraded municipal services.

This debate looks a lot like the historical example of rural co-ops for electricity.  Big cities got supplied by negotiating contracts with major electrical suppliers.  But areas outside of the big financial and manufacturing cities had to band together in cooperatives which funded construction of power plants and distributions systems.  These projects were guaranteed with local taxes and bonds, but expected to make a profit or return dividends to the consumer members.  The federal government looked favorably upon rural power co-ops.  In getting homes anywhere and everywhere electrified these projects were successful.  Some failed economically in their early years.  Yet when they succeeded economically, not only did they connect power, they made lots of money for towns and residents.



"municipalities are trying to accelerate roll out of big broadband..."

Some municipalities are setting up local metropolitan distribution networks.  Organizationally these associations take many forms, but the goal is to get big broadband connectivity into areas that incumbent telecom companies are seen as too slow to serve.  Early experiments were with wireless networks but these have proven very unsatisfying to everyone – user and business alike.  Without WiFi that can easily pass through trees and big buildings, metro WiFi becomes a costly affair of setting up countless poles and other distribution hubs.  The economics do not justify the lower bandwidth potential.  Wireless today maxes at 2.5 megabits where FTTH comes in at 30 megabits. 

In the end, partnerships are best.  A great example of this today is the Utopia network [http://www.utopianet.org].  Utopia is a regional communications utility charted by 14 member local governments in Utah.  They provide the fiber pipe into the delivery box in the home.  They partner with telecom companies by leasing bandwidth to the telecom providers to reach these homes and sell communications services to the businesses and residents.  It is a win for everyone.

 

NAKINA

Today the big initiatives for FTTP in the USA are from two surviving RBOCs: AT&T’s Lightspeed and Verizon’s FiOS.  Both are multi-service, big broadband plays delivering VOIP, Internet connectivity, HDTV, digital TV and content on demand.  Both companies are investing heavily in capital, from a Wall Street perspective.  But this capital only funds about 3 million homes for each this year – if they stick to schedules.  Neither carrier will currently deploy services outside of their “traditional service zone” established when they were RBOCs. 

So who gets these broadband connectivity services?  From the point of view of the municipalities, it is a lottery and there are too few winners to meet demand.  So municipalities are trying to accelerate roll out of big broadband by taking over build outs of the last mile in their economic domains.  “Dilemma: how does the municipality partner with service providers to provide advanced services and capability when the population or household density per square mile may never be financially viable for the service providers?”  was a question recently posed by a telecommunications executive and Member of the Telecommunication Board of a Texas municipality.


But the avowed business policy of the major telecom FTTP providers is to own the full facilities themselves.  Only then can they insure customer lock-in.  It is pretty much certain (at least when some early deployment bugs are out) that if you plant fiber to a home, the churn on that home gets close to zero.  And lastly, putting in and owning new fiber bypasses old cable franchise agreements some municipalities still hold to, since these arrangements once provided 5% of TV delivery revenue to these same towns.  As building owners request similar gate-taxes to deploy services inside their properties, AT&T is also hedging its bets by deploying 3G wireless in 100 metro markets.

The future: Pervasive computing, QoS, and integrated services:
But what are we going to do with all that bandwidth?  We are finally going to get Vint Cerf’s “Internet Toaster.”  Everything in the home and in the business will be networked together and often directly gated into the wide area communications network.  This is called pervasive computing and new businesses that support development of this technology are springing up.  At the moment, there is no consensus on how to manage these end network devices.

 

article page | 1 | 2 | 3 | 4

last page back to top of page next page
 

© 2006, All information contained herein is the sole property of Pipeline Publishing, LLC. Pipeline Publishing LLC reserves all rights and privileges regarding
the use of this information. Any unauthorized use, such as copying, modifying, or reprinting, will be prosecuted under the fullest extent under the governing law.