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Drew Clark: The Year of Community and Municipal Gigabit Broadband

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.

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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:

  1. High-speed internet is necessary infrastructure.
  2. The internet is non-partisan.
  3. Communities must enjoy self-determination in selecting public, nonprofit, corporate or public-private solutions.
  4. High-speed internet is a community-wide endeavor.
  5. Meaningful competition drives progress.
  6. 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 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. 

Breakfast Media LLC CEO Drew Clark is a nationally respected U.S. telecommunications attorney. An early advocate of better broadband, better lives, he founded the Broadband Census crowdsourcing campaign for better broadband data in 2008. That effort became the Broadband Breakfast media community. As Editor and Publisher, Clark presides over news coverage focused on digital infrastructure investment, broadband’s impact, and Big Tech. Under the American Recovery and Reinvestment Act of 2009, Clark served as head of the Partnership for a Connected Illinois, a state broadband initiative. Now, in light of the 2021 Infrastructure Investment and Jobs Act, attorney Clark helps fiber-based and wireless clients secure funding, identify markets, broker infrastructure and operate in the public right of way. He also helps fixed wireless providers obtain spectrum licenses from the Federal Communications Commission. The articles and posts on Broadband Breakfast and affiliated social media, including the BroadbandCensus Twitter feed, 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.

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Broadband's Impact

House Bill to Make Broadband Grants Non-Taxable Introduced

Sen. Mark Warner said last month he is working to pass a companion bill by year’s end.

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Photo of Rep. Mike Kelly, R-Penn.

WASHINGTON, December 7, 2022 – Reps. Mike Kelly, R-Penn., and Jimmy Panetta, D-Ca., on Wednesday introduced the Broadband Grant Tax Treatment Act, the companion of a Senate bill of the same name, which would make non-taxable broadband funding from the Infrastructure Investment and Jobs Act and the American Rescue Plan Act.

The bill’s supporters say it will increase the impact of Washington’s broadband-funding initiatives, the largest of which is the IIJA’s $42.45 billion Broadband Equity, Access, and Deployment program. The IIJA allocated a total of $65 billion toward broadband-related projects.

Kelly said the proposal “ensures federal grant dollars, especially those made available to local governments through pandemic relief funding, will give constituents the best return on their investment.”

“This legislation allows for existing grant funding to be spent as effectively as possible,” Kelly added.

Sen. Mark Warner, D-Va., sponsored Senate’s version of the bill in September and said last month he is working to push it through by year’s end.

“Representative Panetta’s and Kelly’s bill to eliminate the counter-productive tax on broadband grants is right on the money,” said Jonathan Spalter, president and CEO of trade group US Telecom. “Closing the digital divide in America – especially in our hardest-to-reach rural communities – will require every cent of the $65 billion Congress has dedicated for that critical purpose.”

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Digital Inclusion

Broadband is Affordable for Middle Class, NCTA Claims

According to analysis, the middle class spends on average $69 per month on internet service.

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Photo of Rick Cimerman, vice president of external and state affairs at NCTA

WASHINGTON, November 22, 2022 – Even as policymakers push initiatives to make broadband less expensive, primarily for low-income Americans, broadband is already generally affordable for the middle class, argued Rick Cimerman, vice president of external and state affairs at industry group NCTA, the internet and television association. 

Availability of broadband is not enough, many politicians and experts argue, if other barriers – e.g., price – prevent widespread adoption. Much focus has been directed toward boosting adoption among low-income Americans through subsidies like the Affordable Connectivity Program, but legally, middle-class adoption must also be considered. In its notice of funding opportunity for the $42.5-billion Broadband Equity, Access, and Deployment program, the National Telecommunications and Information Administration required each state to submit a “middle-class affordability plan.”

During a webinar held earlier this month, Cimerman, who works for an organization that represents cable operators, defined the middle class as those who earn $45,300–$76,200, basing these boundaries on U.S. Bureau of Labor statistics for 2020. And based on the text of an Federal Communications Commission action from 2016, he set the threshold of affordability for broadband service at two percent of monthly household income.

According to his analysis, the middle class, thus defined, spends on average $69 per month on internet service. $69 is about 1.8 percent of monthly income for those at the bottom of Cimerman’s middle class and about 1.1 percent of monthly income for those at the top. Both figures fall within the 2-percent standard, and Cimerman stated that lower earners tended to spend slightly less on internet than the $69-per-month average.

Citing US Telecom’s analysis of the FCC’s Urban Rate Survey, Cimerman presented data that show internet prices dropped substantially from 2015 to 2021 – decreasing about 23 percent, 26 percent, and 39 percent for “entry-level,” “most popular” and “highest-speed” residential plans, respectively. And despite recent price hikes on products such as gas, food, and vehicles, Cimerman said, broadband prices had shrunk 0.1 percent year-over-year as of September 2022.

Widespread adoption is important from a financial as well as an equity perspective, experts say. Speaking at the AnchorNets 2022 conference, Matt Kalmus, managing director and partner at Boston Consulting Group, argued that providers rely on high subscription rates to generate badly needed network revenues.

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Broadband's Impact

Federal Communications Commission Mandates Broadband ‘Nutrition’ Labels

The FCC also mandated that internet service provider labels be machine-readable.

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Federal Communications Commission Chairwoman Jessica Rosenworcel

WASHINGTON, November 18, 2022 – The Federal Communications Commission on Thursday afternoon ordered internet providers to display broadband “nutrition” labels at points of sale that include internet plans’ performance metrics, monthly rates, and other information that may inform consumers’ purchasing decisions.

The agency released the requirement less than 24 hours before it released the first draft of its updated broadband map.

The FCC mandated that labels be machine-readable, which is designed to facilitate third-party data-gathering and analysis. The commission also requires that the labels to be made available in customers’ online portals with the provide the and “accessible” to non-English speakers.

In addition to the broadband speeds promised by the providers, the new labels must also display typical latency, time-of-purchase fees, discount information, data limits, and provider-contact information.

“Broadband is an essential service, for everyone, everywhere. Because of this, consumers need to know what they are paying for, and how it compares with other service offerings,”  FCC Chairwoman Jessica Rosenworcel said in a statement. 

“For over 25 years, consumers have enjoyed the convenience of nutrition labels on food products.  We’re now requiring internet service providers to display broadband labels for both wireless and wired services.  Consumers deserve to get accurate information about price, speed, data allowances, and other terms of service up front.”

Industry players robustly debated the proper parameters for broadband labels in a flurry of filings with the FCC. Free Press, an advocacy group, argued for machine-readable labels and accommodations for non-English speakers, measures which were largely opposed by trade groups. Free Press also advocated a requirement that labels to be included on monthly internet bills, without which the FCC “risks merely replicating the status quo wherein consumers must navigate fine print, poorly designed websites, and byzantine hyperlinks,” group wrote.

“The failure to require the label’s display on a customer’s monthly bill is a disappointing concession to monopolist ISPs like AT&T and Comcast and a big loss for consumers,” Joshua Stager, policy director of Free Press, said Friday.

The Wireless Internet Service Providers Association clashed with Free Press in its FCC filing and supported the point-of-sale requirement.

“WISPA welcomes today’s release of the FCC’s new broadband label,” said Vice President of Policy Louis Peraertz. “It will help consumers better understand their internet access purchases, enabling them to quickly see ‘under the hood,’ and allow for an effective apples-to-apples comparison tool when shopping for services in the marketplace.”

Image of the FCC’s sample broadband nutrition label

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