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Neighborly Launches its Broadband Accelerator with 35 Cities, Stoking Momentum for Open Access Fiber

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November 16, 2018 – With the launch of a group of communities in a “broadband accelerator” launched by the municipal finance portal Neighborly, the momentum behind open access broadband networks is continuing to build.

On Thursday, Neighborly announced that it had selected 35 cities, including sizable communities of Cleveland, New Orleans and Richmond, as its first class to participate in this broadband accelerator. These communities will receive instruction from industry experts and service providers, as well as being able to access “Neighborly financing at a competitive, below industry rate cost.”

According to Thursday’s press release from Neighborly, “more than 100 communities, through local broadband advocates and government officials (CIOs, CTOs, CFOs, Mayor’s, City Council members) applied to supercharge their local broadband ambitions; we had such an overwhelming response, we expanded the class size to accept 35 communities in this cohort.”

Communities that participate in the program will be guided through the process of establishing community broadband networks.

Neighborly identifies, as its “key principles for open access community broadband”:

  • Communities own their broadband infrastructure
  • ISPs compete to serve the community
  • Access is universal and affordable
  • Network revenues means no new taxes.

Neighborly’s role in the broadband space

Neighborly, a fintech startup based in San Francisco and supported by Emerson Collective, 8VC and Ashton Kutcher’s Sound Ventures, has recently begun ramping up its efforts in the broadband space.

“We are the first impact broker-dealer, and we focus on future-proofing broadband, solar, and anything that has impacts for smart cities of the future,” said Lindsey Brannon, head of public finance at Neighborly, speaking at an October Broadband Communities conference in Ontario, California.

“We see connectivity as a fundamental right,” added Garrett Brinker, product manager of Neighborly, speaking at a Next Century City conference in Hartford on November 8.

He said that Neighborly was focusing on uniting cities that are seeking to build open access networks with the financing necessary to build such networks.

What is open access?

Open access networks are becoming more real for gigabit connectivity in the United States. One open access network is the so-called “three-tiered” model: One entity owns the fiber infrastructure, a second entity operates the gigabit network, and a third entity sells retail internet access to customers.

Why split up ownership, network operations, and internet services?

Each of these three activities are fundamentally different. They are best served by different skill sets and different business models.

For example, financing fiber infrastructure can be realized more readily when it is understood as a long-term capital or real estate investment.

And network operations are utility-like. They are best served by government entities or by private-sector providers separate from actual internet service providers.

On such open access networks, there are generally multiple service providers offering a variety of packages of broadband services for business and retail customers.

Yet this concept of a three-tiered broadband network is still, panelists said, a bit of a novelty in the United States. Unlike other places around the world, the vertically integrated giant can seem like the norm in the United States. Incumbent communications companies generally own their own fiber, wireless and other assets. They operate their respective core network in their own proprietary fashion. And they try to provide customer service — internet connectivity, or the so-called “triple play,” or services like home security — to end users.

Recent marketplace developments have seen players like AT&T, Comcast, and Verizon Communications seeking to integrate even further. However, it will be from fiber-optic communication, that a multitude of services and application uses will be unleashed. But this flourishing can only happen if innovators fix the business model problems that limit ownership of and access to fiber utilities.

The first class of broadband accelerator communities 

And here’s the list of communities that have been accepted into the program:

• Fresno, CA
• Nevada City, CA
• Oakland, CA
• Palo Alto, CA
• Santa Rosa, CA
• Salinas, CA
• Lyons, CO
• Madison, CT
• Jacksonville, FL
• New Orleans, LA
• Brockton, MA
• Cambridge, MA
• Millinocket, East Millinocket & Medway, ME (on behalf of Katahdin Broadband Utility)
• Windham, ME (on behalf of Lakes Region Broadband Partnership)
• Blue Hill, Brooksville, Deer Isle, Penobscot & Sedgwick, ME (on behalf of Peninsula Utility for Broadband)
• Metuchen, NJ
• Cleveland, OH
• Portland, OR
• Harrisburg, PA
• Block Island, RI
• Sweetwater, TN
• Baird, TX
• Ashland, VA
• Manquin, VA
• Richmond, VA
• Virginia Beach, VA
• Enosburgh, VT
• Sauk County, WI
• Laramie, WY

And these are among the guest lecturers who will be addressing the class of cities participating in the accelerator:

• Blair Levin, Senior Fellow, Metropolitan Policy Program, Brookings Institute
• Deb Socia, Executive Director, Next Century Cities
• Christopher Mitchell, Director of the Community Broadband Networks Initiative, Institute for Local Self Reliance
• Matt Dunne, Founder and Executive Director, Center on Rural Innovation
• Anne Schwieger, Broadband and Digital Equity Advocate, City of Boston

See also https://broadbandbreakfast.com/2017/05/spotlight-on-advantages-of-open-access-networks-at-broadband-communities-summit

(Photo of Blair Levin via www.lohud.com)

Expert Opinion

Paul Atkinson: Why Fiber Trumps Satellite When Bridging the Digital Divide

On the surface, satellite seems like the ideal way to close the rural-urban digital divide.

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The author of this Expert Opinion is Paul Atkinson, CEO of Optical Networks of STL

The Grand Canyon in Arizona is 18 miles across at its widest point. The only thing wider is the digital divide between the state’s rural and urban areas. Roughly 99% of urban Arizonans have access to fixed terrestrial broadband services that deliver at least 25 Megabits per second (Mbps) down and 3 Mbps up, according to the FCC’s 2021 Broadband Deployment Report . Only 66% of its rural residents do.

Arizona isn’t an anomaly, either. Nearly 99% of all urban Americans have access to broadband versus 82.7% of rural residents.

This problem also is a business opportunity, which is why so many vendors and service providers are positioning their technology of choice as the best way to bridge the digital divide. The main contenders are satellite, fiber, Wi-Fi and fixed wireless access that uses 5G cellular. Each has its strengths and weaknesses.

For example, 5G FWA requires building hundreds of thousands of base stations in remote areas that might be home to only a handful of homes and businesses — a buildout that likely would take years and tens of billions of dollars. That’s a difficult investment to recoup and make profitable.

That’s simply not a viable business model, as a US Cellular white paper acknowledged: “ Our economics require approximately 500 subscribers to build a new tower, and we can’t assume that everyone will adopt the service. The cost of building and maintaining a tower in rural America can be nearly twice as expensive as building a tower in an urban area.”

Satellite and fiber have emerged as the top two contenders. On the surface, satellite seems like the ideal way to close the rural-urban digital divide because it doesn’t require hundreds of thousands of base stations. But satellite has its share of technological and business limitations, too — to the point that in August, the FCC rejected SpaceX’s application for Rural Digital Opportunity Fund (RDOF) subsidies.

FCC Chairwoman Rosenworcel questioned whether it was affordable to ‘subsidize ventures that are not delivering the promised speeds or are not likely to meet program requirements, especially when consumer would have to purchase a $600 dish.

Rural America’s high-fiber diet

The FCC’s rejection of SpaceX/Starlink is not a setback in bridging the rural-urban digital divide. It’s actually a milestone toward parity because it ensures that an unproven technology doesn’t divert scarce public subsidies from a proven one.

As Gary Bolton, Fiber Broadband Association president and CEO rightly stated, this is a huge victory for 640,000 families who were relegated to Low Earth Orbit Satellite service. They could have been redlined from being eligible for fiber broadband. There is now clarity and a path forward for fiber to bridge the digital divide.

Fiber has already proven its worth in rural America, where it has 23% of the broadband market and the highest customer satisfaction of all internet-access technologies, according to a 2021 Pivot Group study . By comparison, fixed wireless and satellite have only 10% and 6% penetration, respectively. Cable has the largest share of the rural market, but many customers find it lacking: One third say they want faster speeds.

In fact, broadband speed is a decisive factor when people are deciding where to relocate. According to the 2022 RVA Market Research & Consulting study “A Detailed Review: The Status of U.S. Broadband and The Impact of Fiber Broadband,” 47% of the people who moved to a rural area in the past year chose one where fiber-to-the-home service is available. That preference highlights how rural communities can use fiber to attract retirees, young professionals, families, entrepreneurs and other demographics looking to escape to the beautiful countryside.

Fiber’s 23% share of the rural broadband market also busts the myth that as a wired technology, it takes too much time and money to deploy in sparsely populated areas, including those with challenging terrain such as mountains. Another wired technology — electricity — overcame those challenges 86 years ago with passage of the Rural Electrification Act , which funded utility cooperatives that built out transmission and distribution networks to serve farms, ranches, small towns and other rural places.

Today, more than 250 of those co-ops have built or are planning broadband networks, according to the National Rural Electric Cooperative Association . Many have been in service for the better part of a decade — or longer. For example, in 2006, Blue Ridge Mountain EMC launched FTTH in Georgia. In 2019, it deployed a 7,000-foot line up a mountain, using drones to overcome challenges such as deep gorge and 100-foot-tall pine trees. In 2016, Elevate Fiber, a division of Delta-Montrose Electric Association, launched gigabit FTTH in two Colorado counties by overlaying fiber on its 4,000 miles of distribution lines.

Co-ops are just one example of how fiber isn’t just poised to bridge the rural-urban digital divide. It already is. That’s great news for rural Americans, who don’t have to wait on unproven, pie-in-the-sky technologies such as satellite.

Paul Atkinson is Chief Executive Officer of Optical Networks for STL. This Expert Opinion is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@breakfast.media. The views reflected in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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Fiber

Public–Private Partnership Model ‘Most Effective Way’ to Address Digital Divide: AT&T Rep

The company’s president of broadband access and adoption initiatives lauded AT&T’s public-private partnerships.

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Screenshot of Jeff Luong, president of AT&T’s broadband access and adoption initiatives

September 28, 2022 – Touting its fiber build in an Indiana county, an AT&T representative said Wednesday that public–private partnership models for broadband expansion are the “most effective way” to bridge the digital divide.

Speaking at the Mobile World Congress in Las Vegas, Jeff Luong, president of the telecoms giant’s broadband access and adoption initiatives, said broadband builds should incorporate multiple revenue streams and allow local communities to adapt to their own unique circumstances.  

Luong said his preferred model blends public funds with private funds and the localized expertise of community leaders with the technical expertise of companies like AT&T. He said that AT&T has contracted to build fiber networks using the public–private partnership model in several states, including Indiana, Louisiana, and Texas.

Luong highlighted his company’s partnership with Vanderburgh County, Indiana, where AT&T is building a fiber network. The deal was struck last year and is scheduled to be completed in 2023. AT&T will own and operate the network, investing $29.7 million to the county’s $9.9 million. The county’s contribution comes from the American Rescue Plan Act.

And while he acknowledged the importance of federal investments, Luong emphasized the role of private investments in expanding broadband.

“The bulk of network investment comes from the private sector,” he said. “The upcoming federal [Broadband Equity, Access, and Deployment] program has $42 billion to spend on broadband over four plus years. Let’s not forget the top three mobile carriers have [a] combined capital expenditure of more than $50 billion in just this past year,” he said.

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Open Access

In Video Session, Christopher Mitchell Digs Into Community Ownership and Open Access Networks

The conversation dealt with open access networks, and whether cities are well-suited to play a role in developing them.

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Screenshot of Christopher Mitchell, director of the Community Broadband Networks Initiative at the Institute for Local Self-Reliance.

September 29, 2022 – Community-owned, open access networks protect communities against irresponsible network operators and stimulate innovation, said Christopher Mitchell, director of the Community Broadband Networks Initiative at the Institute for Local Self-Reliance, at a Broadband.Money Ask Me Anything! event Friday.

“AT&T, Frontier, these companies have a history of failing to meet community needs,” said Mitchell. “If I had a choice between open broadband fixed wireless and fiber from AT&T, I’d be really, you know, checking it out.”

“[AT&T] is a company that will sell your data at the first opportunity, it’s a company that will raise your bill every chance it gets,” Mitchell added.

ILSR’s director said that in communities in which local ownership isn’t possible, such as in a town with a deeply corrupt government, there still exist contractual provisions that can maximize local control.

A right of first refusal, for instance, gives communities the option to purchase their local network if the original provider chooses to sell. Mitchell also suggested communities write performance-based contracts that institute penalties for network partners who fail to meet clearly outlined performance benchmarks.

Conversation entered realm of open access discussion

The wide-ranging conversation also dealt with the issues of open access networks, and whether cities are well-suited to play a role in developing them.

 “The cities are the custodians of their rights of way – they need to be, they must be,” said Drew Clark, editor and publisher of Broadband Breakfast. Because of the cities inherent role as custodians of their rights of way, Clark said that open-access networks provide cities with the opportunity to own the infrastructure portion of their broadband networks, while still offering private companies the ability to serve as network operators or application service providers.

Mitchell agreed that open access networks can be critical to broadband innovation. “We need to have millions – ideally tens of million – of Americans in thriving areas that have open access to kind of see what we can do with networks,” he said.

“Maybe a lot of those ideas won’t work out, but I think we don’t want to foreclose that path.”

In addition to overseeing digital infrastructure projects, communities can promote digital equity by utilizing established, trusted community-based institutions – such as food pantries or faith groups – to boost digital literacy and distribute devices, Mitchell said.

Mitchell added that these efforts must be ongoing: “This is more about building connections now.”

Broadband.Money is a sponsor of Broadband Breakfast.

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