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Fiber to the Home Council Webinar on Municipal Broadband Solutions Focuses on Open Access Opportunities

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WASHINGTON, May 22, 2014 – In a Wednesday webinar, the Fiber to the Home Council invited broadband planning firm Magellan Advisors to discuss their ways of advising communities seeking to build advance broadband networks.

Guest members included Magellan Advisors President John Honkers and Vice President Kyle Hollifeld. They described their firm as a ‘turnkey’ that offers aid from initial planning stages to implementation of networks, and even helping operators manage networks once they’re established.

“We like to think of ourselves as the guys in the field who see what’s happening every day and bring that back to the consulting side,” said Magellan President John Honkers said. “[We look at] what things work, what don’t work, and how to really manage these projects on a long term basis.”

When constructing broadband and fiber networks around the country, Honkers said that municipalities. private operators, and public organizations have to balance sustainability with community needs.

“[Communities] who have longer return of investment are more difficult to achieve,” he said. ”It’s expensive to get into small business because the revenues they generate [are] not significant enough to sustain a project on its own. On the other hand, shorter returns of investment are more sustainable, but we’re missing out on community needs from a public organization’s perspective.”

Honkers stressed the need for a marriage between those two types of projects – and that private sector operators and public organizations have to be in alignment for a project to work. The parties need to consider the needs of service providers, capitalization issues, and access to funding like grant and loan opportunities.

Honkers said: “One of the key things we’ve been witnessing recently is, what existing networks and assets do communities have that can be leveraged to expand fiber and lower the cost of it?”

Hollifield described different types of business models as belonging to “a chain.” The farther up one moves along it, the greater the risks and rewards are for the community. These business models can take on a variety of flavors such as municipal-only, where municipal providers take on sole burden; or municipal-open access, where municipalities or public organizations are negotiating open access requirements with their partners. Those partners can be direct providers or providers coming onto a network as wholesalers or retailers.

Five major business models were discussed, including:

  • “Partner, no assets”
  • “Dark Fiber, single provider”
  • “Dark fiber, open access”
  • “Lit Fiber, open access”
  • “Direct provider”

The first couple of models are less popular and are not very focused on communities taking an active role. The opposite is true for open-access dark fiber and lit fiber, which emphasize cities taking an active role in providing services down to the premises.

“What we see in most communities is cities moving closer to that type of open network by taking an active role in expanding the last mile by bringing it from their backbone,” Honkers said. “Cities are more adept at [reducing costs] if they have existing outside plan operations and are already building last mile operations.”

“They see there’s an obvious advantage because cities and electric utilities have a lower cost of capital that can be used to build and finance this network than could otherwise be done in the private sector,” he added.

He added that public sector network building involves lower costs of capital over a longer period of time. Instead of a three to four-year payback, there’s a 10 to 15-year payback period on municipal financing. This reduces the cost of infrastructure that is later released back out to providers.

Lit fiber networks are also popular in communities that wish to push competition further into their markets, Honkers said. Unlike dark fiber networks, which “partition the network” by only allowing a single provider to service a single customer, lit fiber networks allow multiple providers to serve a network so an end-user – whether a home or a business – can potentially pick whichever service they want through a provider instead of being limited to one.

Hollifeld lastly spoke about direct providers, or municipalities that realize they can provide the greatest service with the greatest benefit all by themselves.

“Their cost of doing business and cost of capitalization is much less expensive than a private enterprise so they can afford to be a direct provider in some cases,” Hollifeld said. “It is a challenge. It has great rewards when it works, and a lot of risk when it doesn’t.”

“Without service providers, there’s not a lot that’s possible,” he said. “When we look at municipal public broadband projects, four out of five are built on an open access, a dark fiber, or some variation of that business model.

Equally important is the political environment.

“We come across this with every project we deal with,” Honkers said. “We’ve gotten to be a lot more political than I ever thought we would be. “Politics plays a huge role in setting policy and also delivering expectations to the community. We have to be wary of how those are going to affect the end results.”

Honkers recounted the story of one of Magellan Advisor’s clients – the city of Palm Coast – which was “pretty underserved when it comes to business broadband service.”

While the city initially began its network building on the premise of telecom cost reduction, the city realized – after building 70 miles worth of fiber throughout town – that a lot of its network resources could be used to advance community benefits.

“So the city quickly just realized ‘hey, we can build to the school districts and we can capture E-rate dollars to build out to these schools at a lower cost,” he said. “The city already had most of the backbone network built, just laterals were needed out to the schools.”

The city ended up bringing 17 schools to the network, providing one Gigabit per second capacity to each school. Before long, the concept was expanded to bring hospitals, counties, and public safety buildings onto the network to create a regionalized broadband network, he said.

Eventually, the decision was made to move beyond local government to businesses by adopting an open-access, lit fiber network.

“Instead of partnering directly with providers, they [Palm Coast] did their needs assessment early on to understand exactly what providers could utilize as incumbent assets and the key to that was plenty of backhaul and plenty of backbone.

“Instead of partnering directly with providers, they did the needs assessment early on to understand exactly what providers could utilize as incumbent assets. [The city of Palm Coast] hosted very little fiber in the ground. in terms of local fiber infrastructure, there’s plenty of backhaul, plenty of backbone.”

“They didn’t have the cost of building fiber,'” he added. “No capital [was] required. The city charged very reasonable local loop costs for access to that network and as a result of bringing that cost down for local fiber, businesses pay significantly less. In this case, it was all a matter of negotiating the deal with service providers to understand exactly what they can bring to the table, what their preferences were, making sure there was alignment with the city’s goals for economic development and bringing that network online.”

The results for Palm Coast were very positive, said the Magellan officials. The city significantly reduced its budget. School, business, and hospital costs decreased by 40 percent. Competition has increased.

The lesson to be learned, said Honkers: “Know your customers.”

 

Digital Inclusion

Lack of Public Broadband Pricing Information a Cause of Digital Divide, Say Advocates

Panelists argued that lack of equitable digital access is deadly and driven by lack of competition.

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September 24, 2021- Affordability, language and lack of competition are among the factors that continue to perpetuate the digital divide and related inequities, according to panelists at a Thursday event on race and broadband.

One of the panelists faulted the lack of public broadband pricing information as a root cause.

In poorer communities there’s “fewer ISPs. There’s less competition. There’s less investment in fiber,” said Herman Galperin, associate professor at the University of Southern California. “It is about income. It is about race, but what really matters is the combination of poverty and communities of color. That’s where we find the largest deficits of broadband infrastructure.”

While acknowledging that “there is an ongoing effort at the [Federal Communications Commission] to significantly improve the type of data and the granularity of the data that the ISPs will be required to report,” Galperin said that the lack of a push to make ISP pricing public will doom that effort to fail.

He also questioned why ISPs do not or are not required to report their maps of service coverage revealing areas of no or low service. “Affordability is perhaps the biggest factor in preventing low-income folks from connecting,” Galperin said.

“It’s plain bang for their buck,” said Traci Morris, executive director of the American Indian Policy Institute at Arizona State University, referring to broadband providers reluctance to serve rural and remote areas. “It costs more money to go to [tribal lands].”

Furthermore, the COVID-19 pandemic has only made that digital divide clearer and more deadly. “There was no access to information for telehealth,” said Morris. “No access to information on how the virus spread.”

Galperin also raised the impact of digital gaps in access upon homeless and low-income populations. As people come in and out of homelessness, they have trouble connecting to the internet at crucial times, because – for example – a library might be closed.

Low-income populations also have “systemic” digital access issues struggling at times with paying their bills having to shut their internet off for months at a time.

Another issue facing the digital divide is linguistic. Rebecca Kauma, economic and digital inclusion program manager for the city of Long Beach, California, said that residents often speak a language other than English. But ISPs may not offer interpretation services for them to be able to communicate in their language.

Funding, though not a quick fix-all, often brings about positive change in the right hands. Long Beach received more than $1 million from the U.S. CARES Act, passed in the wake of the early pandemic last year. “One of the programs that we designed was to administer free hotspots and computing devices to those that qualify,” she said.

Some “band-aid solutions” to “systemic problems” exist but aren’t receiving the attention or initiative they deserve, said Galperin. “What advocacy organizations are doing but we need a lot more effort is helping people sign up for existing low-cost offers.” The problem, he says, is that “ISPs are not particularly eager to promote” low-cost offers.

The event “Race and Digital Inequity: The Impact on Poor Communities of Color,” was hosted by the Michelson 20MM Foundation and its partners the California Community Foundation, Silicon Valley Community Foundation and Southern California Grantmakers.

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Broadband's Impact

USC, CETF Collaborate on Research for Broadband Affordability

Advisory panel includes leaders in broadband and a chief economist at the FCC.

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Hernan Galperin of USC's Annenberg School

WASHINGTON, September 22, 2021 – Researchers from the University of Southern California’s Annenberg School and the California Emerging Technology Fund is partnering to recommend strategies for bringing affordable broadband to all Americans.

In a press release on Tuesday, the university’s school of communications and journalism and the CETF will be guided by an expert advisory panel, “whose members include highly respected leaders in government, academia, foundations and non-profit and consumer-focused organizations.”

Members of the advisory panel include a chief economist at the Federal Communications Commission, digital inclusion experts, broadband advisors to governors, professors and deans, and other public interest organizations.

“With the federal government and states committing billions to broadband in the near term, there is a unique window of opportunity to connect millions of low-income Americans to the infrastructure they need to thrive in the 21st century,” Hernan Galperin, a professor at the school, said in the release.

“However, we need to make sure public funds are used effectively, and that subsidies are distributed in an equitable and sustainable manner,” he added. “This research program will contribute to achieve these goals by providing evidence-based recommendations about the most cost-effective ways to make these historic investments in broadband work for all.”

The CETF and USC have collaborated before on surveys about broadband adoption. In a series of said surveys recently, the organizations found disparities along income levels, as lower-income families reported lower levels of technology adoption, despite improvement over the course of the pandemic.

The surveys also showed that access to connected devices was growing, but racial minorities are still disproportionately impacted by the digital divide.

The collaboration comes before the House is expected to vote on a massive infrastructure package that includes $65 billion for broadband. Observers and experts have noted the package’s vision for flexibility, but some are concerned about the details of how that money will be spent going forward.

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Broadband's Impact

Technology Policy Institute Introduces Data Index to Help Identify Connectivity-Deprived Areas

The Broadband Connectivity Index uses multiple datasets to try to get a better understanding of well- and under-connected areas in the U.S.

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Scott Wallsten is president and senior fellow at the Technology Policy Institute

WASHINGTON, September 16, 2021 – The Technology Policy Institute introduced Thursday a broadband data index that it said could help policymakers study areas across the country with inadequate connectivity.

The TPI said the Broadband Connectivity Index uses multiple broadband datasets to compare overall connectivity “objectively and consistently across any geographic areas.” It said it will be adding it soon into its TPI Broadband Map.

The BCI uses a “machine learning principal components analysis” to take into account the share of households that can access fixed speeds the federal standard of 25 Megabits per second download and 3 Mbps upload and 100/25 – which is calculated based on the Federal Communications Commission’s Form 477 data with the American Community Survey – while also using download speed data from Ookla, Microsoft data for share of households with 25/3, and the share of households with a broadband subscription, which comes from the American Community Survey.

The BCI has a range of zero to 10, where zero is the worst connected and 10 is the best. It found that Falls Church, Virginia was the county with the highest score with the following characteristic: 99 percent of households have access to at least 100/25, 100 percent of households connect to Microsoft services at 25/3, the average fixed download speed is 243 Mbps in Ookla in the second quarter of this year, and 94 percent of households have a fixed internet connection.

Meanwhile, the worst-connected county is Echols County in Georgia. None of the population has access to a fixed connection of 25/3, which doesn’t include satellite connectivity, three percent connect to Microsoft’s servers at 25/3, the average download speed is 7 Mbps, and only 47 percent of households have an internet connection. It notes that service providers won $3.6 million out of the $9.2-billion Rural Digital Opportunity Fund to provide service in this county.

“Policymakers could use this index to identify areas that require a closer look. Perhaps any county below, say, the fifth percentile, for example, would be places to spend effort trying to understand,” the TPI said.

“We don’t claim that this index is the perfect indicator of connectivity, or even the best one we can create,” TPI added. “In some cases, it might magnify errors, particularly if multiple datasets include errors in the same area.

“We’re still fine-tuning it to reduce error to the extent possible and ensure the index truly captures useful information. Still, this preliminary exercise shows that it is possible to obtain new information on connectivity with existing datasets rather than relying only on future, extremely expensive data.”

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