Broadband is the next essential utility, as vital to economic growth as clean water and good roads.
Broadband is defined in different ways in different places. All agree that is an "always on" service, but minimum expectations for speed range from 2 megabits per second up to 10, 20 or 50 times that.
Whatever the speed, the power of broadband is simple enough to express. It connects your computer, laptop or mobile device to billions of devices and users around the world, creating a digital overlay to our physical world that is revolutionizing how we work, play, live, educate and entertain ourselves, govern our citizens and relate to the world. In the "broadband economy" created by this technology...
- The world's largest taxi company, Uber, owns no vehicles.
- The world's most popular media company, Facebook, creates no content.
- The world's largest accommodation provider, Airbnb, owns no real estate.
- The world's most valuable retailer, Alibaba, has no inventory.
Why Communities Get Involved
Infrastructure is the foundation of economic competitiveness. Broadband may be one of the fastest growing technologies in history, but its availability, speed and reliability consistently lag behind user demand, particularly in low-density and low-income markets that do not offer the private sector attractive investment opportunities. That gives local government a strong incentive to involve itself in promoting access to high-quality broadband. The most successful have all begun with the same first step: establishing a clear vision and communicating why broadband access matters. If constituents believe that broadband is just about downloading music or playing online games, they will not provide political support when it is needed. But if they see broadband as a path to prosperity and greater citizen participation, it will be quite a different story.
Once communities know what they want to do and why, they take different paths to get there. The Intelligent Community Forum has identified five approaches taken by the communities we have studied.
- Development Policy. Remaining safely within the bounds of tradition, governments direct the usual tools of development policy at broadband deployment. They set broadband-friendly building codes. They conduct inventories of existing broadband networks and access points. They offer tax credits and craft rights-of-way policies to support network development.
- Networks for Government. Local and regional governments are big users of communications, and they are generally as free as any business to build private networks for their own use. To reduce costs and gain new capabilities, they construct a fiber or coaxial network linking all government offices, schools, libraries hospitals and other public facilities. By making these investments in networks and services, governments become a vital anchor tenant for broadband and stimulate demand for broadband services.
- Public-Private Partnerships. In other cases, government sets its sights on building a public-access network from the start but chooses not to build, own or operate it. Public-private partnerships take many forms, limited only by the imagination and legal framework in which the municipality operates. Some communities issue municipal bonds to fund construction of a network, which they lease to private carriers, with the lease payments covering the debt service. Others create nonprofit organizations to develop networks in collaboration with private carriers or provide seed investment to jumpstart construction of networks that the private sector is unable to cost-justify on its own.
- Dark Fiber and Open Access Networks. Yet another variation on deployment strategy leverages the municipality's control of its roads and rights of way to encourage the private sector to invest. In these communities, government stops issuing permits to carriers to lay cable or fiber and instead builds its own system of conduits and lays "dark fiber" throughout the network. It then leases access to the fiber to carriers. By digging up the streets once and then closing them to further construction, local governments protect their citizens from the disruption of repeated road work. The municipalities price the leases to cover their construction and maintenance costs as well as providing a positive return on investment. In some cases, the municipalities go a step further by creating an "open network" management platform that permits carriers to provision services almost instantly, which encourages competition and innovation.
- Direct Competition. The most aggressive posture a community can take is to invest public funds in setting up a broadband carrier, building a network and delivering service to outside customers. Local government typically takes this path after repeated attempts to interest incumbent carriers in upgrading networks have failed because the carriers could not make a business case for investment. Since municipalities need to earn a return sufficient only to pay capital and operating costs, they can frequently make such a case themselves – particularly if they already own and operate water, gas or electric utilities, as many small rural communities do.
Mention municipal broadband, and most people think you are talking about direct competition with the private sector. But direct competition is just one of many strategies and by no means the most common. Intelligent Communities everywhere want the same thing: to get their citizens the broadband utility they need at a price they can afford.