December 18, 2014 – While net neutrality captured Washington policy headlines, the most significant communications development in 2014 was the emergence of new and more viable approaches to building community and municipal Gigabit Networks.
A confluence of factors in the worlds of broadband, energy, transportation, manufacturing and civic engagement have underscored the need for next-generation internet networks. Evidence of this gathering momentum behind global Gigabit Cities include the high-profile emergence of public-private financing models and a growing network of high-bandwidth computing applications.
This year’s fight over net neutrality is not unrelated to the push for Gigabit Networks. The Federal Communications Commission’s Open Internet proceeding is a battle over scarcity: The prioritization of traffic on lower-capacity networks. From the D.C. Circuit Court’s decision striking down FCC rules in January to President Obama’s decision to directly intervene in the new FCC proceeding, it’s been an all-consuming public battle.
But viewed from the vantage point of the future, the far more significant development will be the emergence of opportunities outside of Washington for high-capacity broadband networks. It’s a world in which cities and municipalities are playing the leadership role.
Smart Cities Equals Gigabit Global Cities
Take, as a recent example, this New York Times story from last week: “Copenhagen Lighting the Way to Greener, More Efficient Cities.”
Not once did this article mention the words “broadband” or even “internet.” And yet the piece was all about the “software and services for critical infrastructure to utilities and cities and [how technology companies are] helping design and operate the traffic and street lighting project here in Copenhagen.”
On a main artery into the city, truck drivers can see on smartphones when the next light will change. And in a nearby suburb, new LED streetlights brighten only as vehicles approach, dimming once they pass.
Aimed at saving money, cutting the use of fossil fuels and easing mobility, the installations are part of a growing wireless network of streetlamps and sensors that officials hope will help this city of roughly 1.2 million meet its ambitious goal of becoming the world’s first carbon-neutral capital by 2025.
Eventually, the network will serve other functions, like alerting the sanitation department to empty the trash cans and informing bikers of the quietest or fastest route to their destinations. It’s all made possible through an array of sensors embedded in the light fixtures that collect and feed data into software.
The Copenhagen smart city one example of how cities have recognized that information communications technology is a necessary part of the “plumbing” of modern life. The common-sense capabilities being deployed in Copenhagen demonstrate how cities see that they must engage in the innards of fiber-optic wires and wireless transceivers if they want to remain good steward of their public rights-of-way.
Indeed, the thinking behind the concept of a “smart city” has grown well businesses like Cisco, IBM or Siemens. There is now a percolating effort to probe the cost-saving, public safety and competitive advantages for cities:
- The Brookings Institution’s “Global Cities Initiative,” a $10 million, five-year project launched in March 2012 with JPMorgan Chase, is aimed at strengthening regional economies and their role in the global marketplace.
- The Atlantic Magazine’s CityLab.com (rebranded in May from its original title of The Atlantic Cities), is a new an editorial hub squarely focused on urban solutions to the issues and ideas facing the world’s metro areas and neighborhoods.
- Susan Crawford’s and Stephen Goldsmith’s September book, “The Responsive City: Engaging Communities Through Data-Smart Governance.” They write: “A confluence of technology advancements now promises broad and constructive change in local government, altering everything from the way workers perform basic functions to the way citizens engage with government.”
- The Global Cities Team Challenge, an effort championed by US Ignite in partnership with the National Institute of Standards and Technology, plus the Departments of Transportation, Energy, Health and Human Services and the National Science Foundation. After its September kickoff, the challenge has been called “Shark Tank meets smart cities” — its an effort to pair up the high-bandwidth applications cultivated by US Ignite with funding from NIST to achieve civic ends. About $10 million in funding will be available for 6-10 projects, and applications are due January 21, 2015.
New Models for Municipal Broadband
The aborning effort to stimulate Gigabit Global cities isn’t just about faster internet. Indeed, that’s precisely the point. High-bandwidth broadband is not a good to be sought on its own. It is fundamental infrastructure upon which next-generation city managers — and next-generation business and social entrepreneurs — are coming to rely.
The most direct crystallization of our municipal broadband moment is the new non-profit coalition dubbed Next Century Cities. Launched less than two months ago in Santa Monica, it now boasts membership from 50 cities, representing 25 states. From Los Angeles to communities along the Pacific Northwest, from Lafayette in Cajun country to Chattanooga, and from patrician Boston to a city that got its start as a cow town, Kansas City, each of these 50 cities have different motivations and approaches to Gigabit Networks. But they agree on these six core principles:
- High-speed internet is necessary infrastructure.
- The internet is non-partisan.
- Communities must enjoy self-determination in selecting public, nonprofit, corporate or public-private solutions.
- High-speed internet is a community-wide endeavor.
- Meaningful competition drives progress.
- Cities can learn from the experiences of others as they build Gigabit Networks.
I was present at the Santa Monica launch of Next Century Cities. I’m excited that, increasingly, city managers aren’t afraid to take responsibility for what is traveling over their rights-of-way. I also recently listened to the three-and-a-half hour webcast of its November 18 field hearing, “Envisioning a Gigabit Future,” in Chattanooga. (It was time well spent!)
What’s important about Next Century Cities is that it represents a “big tent” approach to community broadband. For cities that want to bring Gigabit Networks to their communities, there are effectively four major routes, all of which are represented within the coalition:
- The corporate model. Google Fiber’s launch in Kansas City has shaken up the tight telecom word of AT&T, Comcast and Verizon Communications. When a city has confidence in a private provider’s promises in accessing rights-of-way, the corporate model can be hassle-free.
- Non-profits and cooperatives. In many cases, co-ops and non-profits have been among the first to deploy fiber. Cleveland’s OneCommunity is terrific example of a non-profit community resource spurring on next-generation networks for its anchor institution and business tenants in Northeast Ohio.
- Public-private partnerships. Although less well-known in the telecom space, public-private partnerships are the default model, world-over, for the construction of highways, tollways, ports and airports. This year has seen great innovation in using public-private partnership to build Gigabit Networks.
- Municipal retail broadband. According to Broadband Communities magazine, more than 143 cities in the U.S. have some form of fiber-optic networks, many of which retail broadband services to city residents.
With the exception of using a corporate providers like Google or AT&T, each of the other three models leave room for open-access opportunities.
As I wrote in another context:
A public-private partnership is a way of leveraging government resources without incurring the expense of going to the capital markets and incurring more debt. Public-private partnerships also give governments a means of ensuring “asset performance,” since payments to the private entity are based on fulfillment and performance. Such normal burdens as labor issues, debt and managing costs fall to the private partner.
Under the public-private partnership model, municipalities have oversight responsibility, but no direct day-to-day role in the build-out and operations of the network. A public-private partner becomes the network operator and wholesaler, overseen by a public entity composed of participating municipalities, to ensure that the contractually agreed performance standards are achieved. The network remains an open access network, with the public-private partner’s role being maximization of competition between providers on the network. The cities retain ownership of the network assets, and the public-private partner takes operational responsibility for the network over a 30-year period, effectively leasing the network from the cities.
Under the public-private partnership/”open access” model, the network operator becomes the provider of the “fiber highway” that an existing or new entrant can use to deliver data, voice, video and other services to customers. This highway is open to any provider that wishes to use it, including the incumbents.
The emergence of new opportunities for entrepreneurs’ open access to Gigabit Networks is one of the most promising developments of the focus on fiber-enhanced Smart Cities.
Applications and Networking (the Human Variety)
An equally important point about municipal Gigabit broadband is the human networking that takes place in the creation of a Gigabit community. Beyond the infrastructure, how are consumers making use of much-expanded broadband capabilities?
This is the essence of Next Century Cities’ point number six: Collaboration benefits all. We have seen extensive public dialogues in Kansas City (because of Google Fiber), in Chattanooga (owing to EPB, the public electric utility turned broadband provider) in Danville, Virginia (through nDanville, the open-access fiber network), and elsewhere. These kinds of public broadband discussions are different from what we used to experience in the provider-centric broadband model of a decade ago.
On a personal level, I’ve seen the benefits of “Better Broadband, Better Lives” first-hand in rural and urban Illinois, where I led the Partnership for a Connected Illinois from 2010 to 2013; and since then in Utah, where I’ve continued to be involved in ensuring the fastest possible internet services for everyone.
In addition to our public mapping activities, Broadband Illinois actively promoted the opportunities that high-speed internet offers for jobs, education, energy efficiency, healthcare, public safety, agriculture and government. As the State Broadband Initiative entity for the land of Lincoln, we collected and published telecom maps and information, collaborated with internet providers and economic development officials for deployment, and educated individuals and organizations on how to effectively use broadband.
Among those educational effort including launching the Illinois Broadband Innovation Fund, which awarded 14 grants to entities using broadband in unique and innovative ways, and working with the Federal Communications Commission on one of the agency’s first broadband lifeline grants to rural Western and Southern Illinois. We also worked closely with Gov. Pat Quinn on his Gigabit Challenge Initiative — one of the first in the nation — and which was announced on February 1, 2012.
When Broadband Illinois held its first conference in Carbondale, in Southern Illinois, in June 2011, the president of Southern Illinois University declared the city to be a “broadband desert.” Yet last week Carbondale officially became a Gigabit city (and recently a member of Next Century Cities), with the launch of a Gigabit Network by Frontier Communication.
I speak of these sorts of educational and entrepreneurial gains in Illinois because of my knowledge and work in the state. These sorts of stories have been replicated throughout the nation over the past five years through the efforts of the State Broadband Initiative program. Yet with the national program coming to end in March of 2015, the question becomes: Who will help convene the public broadband dialogue both on infrastructure and on applications?
US Ignite and Next Century Cities are two important groups stepping in to fill the breach. There will certainly be others, too: Such as the Rural Telecommunications Congress, that works to ensure rural areas aren’t left out of benefits available to “next century cities.”
But the direction toward Gigabit Networks – and the leadership role being played by states and by municipalities – is truly positive. In 2014, for the first time, Gigabit Networks have become an undeniable force that has reached a tipping point.
Drew Clark is the Chairman of the Broadband Breakfast Club, the premier Washington forum advancing the conversation around broadband technology and internet policy. He tracks the development of Gigabit Networks, broadband usage, the universal service fund and wireless policy @BroadbandCensus. You can find him on LinkedIN, Google+ and Twitter. The articles and posts on BroadbandBreakfast.com and affiliated social media are not legal advice or legal services, do not constitute the creation of an attorney-client privilege, and represent the views of their respective authors. Clark brings experts and practitioners together to advance the benefits provided by broadband: job creation, telemedicine, online learning, public safety, energy, transportation and eGovernment.
Broadband Breakfast on October 27, 2021 — When ‘Greenfield’ Fiber Meets ‘Brownfield’ Multiple Dwelling Units
What options do owners of, operators in, and tenants within MDUs have for better-quality broadband?
Our Broadband Breakfast Live Online events take place on Wednesday at 12 Noon ET. You can watch the October 27, 2021, event on this page. You can also PARTICIPATE in the current Broadband Breakfast Live Online event. REGISTER HERE.
Wednesday, October 27, 2021, 12 Noon ET — “When Greenfield Fiber Meets Brownfield Multiple Dwelling Units”
Bringing fiber to the premises is sometimes only half the battle. For example, bringing fiber to an MDU may not mean that every tenant will get better-quality broadband. In the case of multiple dwelling units or multi-tenant housing, it isn’t easy to completely rewire an existing building with fiber-to-the-unit. Further, the Biden Administration and the Federal Communications Commission are pushing real estate owners to eliminate or minimize exclusive MDU broadband contacts. What options do the owners of, operators in, and tenants within MDUs have to enjoy both competitive and better-quality broadband?
- Kevin Donnelly, Vice President, Government Affairs, Technology and Strategic Initiatives, National Multifamily Housing Council
- Jenna Leventoff, Senior Policy Counsel, Public Knowledge
- Pierre Trudeau, President and Chief Technology Officer, Positron Access
- Other Guests have been invited
- Drew Clark (moderator), Editor and Publisher of Broadband Breakfast
Kevin Donnelly is Vice President for Government Affairs, Technology and Strategic Initiatives at the National Multifamily Housing Council (NMHC) and represents the interests of the multifamily industry before the federal government focusing on technology, connectivity, risk management and their intersection with housing policy. Kevin is a part of NMHC’s Innovation and Technology team and leads its Intelligent Buildings and Connectivity Committee. Kevin has spent over 15 years in the public policy arena at leading real estate trade associations and on Capitol Hill. Kevin received his BA from Rutgers University and his Masters in Public Management from Johns Hopkins University.
Jenna Leventoff is a Senior Policy Counsel at Public Knowledge, where she focuses on broadband deployment and adoption. Prior to joining Public Knowledge, Jenna served as a Senior Policy Analyst for the Workforce Data Quality Campaign (WDQC) at the National Skills Coalition, where she led WDQC’s state policy advocacy and technical assistance efforts on state data system development and use. She also served as an Associate at Upturn, where she analyzed the civil rights implications of new technologies, and as Manager and Legal Counsel of the International Intellectual Property Institute, where she led the organization’s efforts to utilize intellectual property for international economic development. Jenna received her J.D, cum laude, and B.A from Case Western Reserve University.
Pierre Trudeau is President and Chief Technology Officer, Positron Access.
Drew Clark, Editor and Publisher of Broadband Breakfast, also serves as Of Counsel to The CommLaw Group. He has helped fiber-based and fixed wireless providers negotiate telecom leases and fiber IRUs, litigate to operate in the public right of way, and argue regulatory classifications before federal and state authorities. He has also worked with cities on structuring Public-Private Partnerships for better broadband access for their communities. Drew brings experts and practitioners together to advance the benefits provided by broadband. He is also the President of the Rural Telecommunications Congress.
As with all Broadband Breakfast Live Online events, the FREE webcasts will take place at 12 Noon ET on Wednesday.
National Non-Profit to Launch Joint Initiative to Close Broadband Affordability and Homework Gap
EducationSuperHighway is signing up partners and will launch November 4.
WASHINGTON, October 18, 2021 – National non-profit Education Super Highway is set to launch a campaign next month that will work with internet service providers to identify students without broadband and expand programs that will help connect the unconnected.
On November 4, the No Home Left Offline initiative will launch to close the digital divide for 18 million American households that “have access to the Internet but can’t afford to connect,” according to a Monday press release.
The campaign will publish a detailed report with “crucial data insights into the broadband affordability gap and the opportunities that exist to close it,” use data to identify unconnected households and students, and launch broadband adoption and free apartment Wi-Fi programs in Washington D.C.
The non-profit and ISPs will share information confidentially to identify students without broadband at home and “enable states and school districts to purchase Internet service for families through sponsored service agreements,” the website said.
The initiative will run on five principles: identify student need, have ISPs create sponsored service offerings for school districts or other entities, set eligibility standards, minimize the amount of information necessary to sign up families, and protect privacy.
The non-profit said 82 percent of Washington D.C.’s total unconnected households – a total of just over 100,000 people – have access to the internet but can’t afford to connect.
“This ‘broadband affordability gap’ keeps 47 million Americans offline, is present in every state, and disproportionately impacts low-income, Black, and Latinx communities,” the release said. “Without high-speed Internet access at home, families in Washington DC can’t send their children to school, work remotely, or access healthcare, job training, the social safety net, or critical government services.”
Over 120 regional and national carriers have signed up for the initiative.
The initiative is another in a national effort to close the “homework gap.” The Federal Communications Commission is connected schools, libraries and students using money from the Emergency Connectivity Fund, which is subsidizing devices and connections. It has received $5 billion in requested funds in just round one.
Steve Lacoff: A New Standard for the ‘Cloudification’ of Communications Services
The cloudification of communications services makes it easy to include voice, data, SMS, and video within any existing service.
The line of demarcation between what has traditionally been considered a telecommunications service was once very clear. It was tangible – there were wires, end points, towers, switches, facilities. Essentially, there was infrastructure required to relay voice or data from point A to point B.
Today that line is fuzzy, if not invisible. The legacy infrastructure remains, but an industry of cloud-based services that don’t require the physical connections has exploded. Voice, data, SMS, and video conferencing can now be conveniently delivered OTT. Enabled by simple API integrations, businesses can embed just one of these services or a complete communications platform-as-a-service (CPaaS) into an app, service, or product.
Cloudification is a game changer
This “cloudification” of communications services makes it easy to include voice, data, SMS, and video within any existing application, product, or service. These are essential components for many business models.
Consider these services we have come to rely on in our daily lives: food or grocery delivery, ride services, and business and personal communications. These require multiple methods of communication with shoppers, drivers, co-workers, watch party groups, and external business partners.
The exciting news is there is no end in sight. Use cases will continue to evolve and growth will continue to skyrocket. The scale cloud delivery accommodates is massive. These untethered, easy to embed communications services are a critical differentiator for both business-to-business and business-to-consumer buyers, and the lifeblood of the businesses providing both the end user subscriptions and the APIs.
In fact, one industry juggernaut saw H1 YoY video application service demand grow nearly 600% in 2020.
Not surprisingly, as business demand for these services increases smaller CPaaS players continue to enter the market to quickly snag market share. According to a recent IDC study, “the global market revenue for CPaaS reached $5.9bn in 2020, up from $4.26bn in 2019, and is expected to reach $17.71bn by 2024.”
Merger and acquisition activity is aligned with this hockey stick growth forecast. Large telcos, SaaS providers, and even other CPaaS providers are all on the hunt. Whether they want to add additional features to punch up their products or eliminate the competition in a very tight, nuanced market, the end game is clear – as the market expands, the players will ultimately contract leaving only the most competitive offerings.
Don’t let communications tax take you by surprise
One of the least understood risks when adding cloud-based voice, data, SMS, or video conferencing to an existing product or service is new eligibility for and exposure to the complex world of communications taxation. Making mistakes can get costly very quickly.
Here are some of the key pitfalls to keep an eye on:
- Expanded nexus: Understanding communications tax nexus is different – and exceptionally more complicated – than sales tax. There are approximately 60,000 federal, state, local, and special taxing jurisdictions, each with uniquely complex rules that tend to change at their own pace. Rules are very different for each service.
- More complex calculations: The more communications services you provide via API, the more complicated communications taxes will be. Each feature can be taxed at different rates in each individual jurisdiction, or the whole bundle can be taxed at one rate. It’s critical to monitor monthly to avoid audit issues.
- Maintaining overall compliance: Just as tax rates and rules need to be maintained, so must tax and regulatory filing forms in each jurisdiction. Some of these are very long and require significant detail. They must be filed in a timely, accurate cadence to avoid additional audit risk.
Bottom line: Don’t assume, be prepared! As these communications services become more pervasive a larger swath of technology providers will find themselves liable for communications tax. The more your business falls behind, the more it can cost you.
It pays to be proactive and prepared. Tax and legal advisory experts can help determine your level of risk, and tax and compliance software providers can help you keep up with changing rules and regulations. Don’t underestimate the ongoing value of networking with peers who are either struggling to answer the same questions or have already overcome the hurdles you’re facing today.
Steve Lacoff is General Manager of Avalara for Communications. With a focus on data, VoIP, and video streaming, Steve has spent 15 years in various product and marketing leadership roles in communications and technology industries, including Disney’s streaming services and Comcast technology solutions. Steve now drives business strategy on today’s changing industry landscape and associated tax impacts. This piece is exclusive to Broadband Breakfast.
Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to email@example.com. The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.
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