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Open Access

COS Systems Brings Swedish Knack for Tech to Open Access Networks, Hopes for Spacious Skies on American Plains

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Photo of Isak Finér, Marketing Manager at COS Systems, by Mikael Hansson used with permission

May 20, 2020 — Sweden has a knack for being the first to the table of tech. Ericsson, a telecommunications company based in Stockholm, introduced the world to the first telephone switch and the first mobile phone. Sweden is home to several game-changing tech companies: Spotify, Skype, Candy Crush, Minecraft and Pirate Bay, to name a few.

“Their valuations were just crazy, insane,” Isak Finér, chief marketing officer of information technology solutions provider COS Systems, said of the Swedish companies’ stock prices at their respective heights.

Part of the Swedish environment and culture is being primed for innovative technology, Finér told Broadband Breakfast in an interview: “Some are scared when something new comes. Sweden is always early.”

This is especially true for technologies that enhance efficiency in their work and in their personal lives. “People like to be self-reliant,” he said. But it also means that “they don’t want to talk to someone if they don’t have to.”

Sweden is also ahead of the curve in implementing open access networks, which is where COS Systems thrives.

Creating a model ecosystem for broadband in the elongated country

An open access network is a business model for providing internet to homes and institutions that is more competitive than the model most prevalent in the United States. In the U.S. model, big communications companies dominate. Not only do companies like AT&T, Comcast and Verizon own their broadband infrastructure, they also operate it. And they offer broadband internet services on top of the infrastructure.

Open-access networks are much more common outside of America. They can be a little complicated to visualize. If you think of a broadband network as a railroad, the train tracks represent the network of underground fiber-optic cable that feeds high-speed internet into homes and businesses throughout the country.

The current dominant model in the U.S. calls for the same people who own the “train tracks” to also supply the “trains,” or in this case the internet services.

An open access model, by contrast, allows train cars run by CarCo, a completely different company, to run on the railroad tracks owned by TrackCo. This gives the consumer more access to wider choices.

A willingness to adapt to the newest technology, along with the Swedish affinity for self-reliance, created a fertile environment for open access networks to take root. In 1994, Sweden’s version of AT&T, Telia, began charging “outrageous prices” for internet service, said Finér.

In response, Swedish municipalities revolted and began building their own networks.

Sweden proves fertile ground for companies that want to help open access networks grow

In addition, several aspects of Swedish demographics allowed for this revolution to flourish and become the norm within the Scandinavian nation: A consensus on the role of municipal governments, urbanization, digital literacy and a high standard of living, to name a few. That, paired with a unique government-sponsored program where employees could borrow computers from their employers for free, allowed the new paradigm of distributing internet to bloom.

COS Systems emerged in 2008 as a company that sold software to help network operators assess the demand for broadband in an area, called “demand aggregation,” and automatically juggle a host of competing service providers on one fiber optic cable.

They initially found success in Sweden, but realized that much of the country’s fiber had already been built out by the early 2010s. In 2013, they set their sights on America.

The COS Systems business model is one of practicality and logic: Invest in the neighborhoods (which became known as “fiberhoods” when Google Fiber got in the picture) that want internet the most, and which will in turn generate the greatest revenue.

This greater long-term access to capital can then be used to build out fiber in less profitable areas, which very often are the more rural or less dense regions.

At that point of the process, Finér said, “it’s up to the neighborhood itself to get the neighbors excited [about broadband access and] get them signed up.”

This strategy has worked in Sweden, where wealthier municipalities initiated the open-access revolution. After 20 years of investment and slow growth, Swedish builders now have the capital to reach the far-flung villages. Though the Swedish digital divide has not been completely annealed, it has nearly been closed.

Will the COS Systems model also play itself out in the United States?

Some critics poke holes in a strategy for deployment that focuses first on the wealthiest neighborhoods with the greatest ability to pay for broadband. Frequently, but not always, wealthier neighborhoods show greater demand for broadband. And some say this could deepen socioeconomic inequalities.

For the broadband developers that make use of COS Systems, they often reply, “We can’t cherry-pick, we have to build to everyone,” Finér said.

How does this translate to the American internet landscape? The rollout of open-access networks in the U.S. has been patchy.

Some states, such as Washington, have been on the forefront of developing open-access models thanks to a law that requires all its utilities — water, electricity, and broadband — to form municipal networks. And it has registered some successes and provided a model for states who wish to do likewise.

Brian Snider, CEO of open access builder Lit Communities, told Broadband Breakfast in an interview that “you don’t get a lot of churn” in an open access business because clients on the whole are more satisfied with the model.

Furthermore, he said he foresaw large volume deployments of open-access infrastructure for all the big carriers, including Google Fiber, a company Lit Communities said it had recently worked with. And, said Snider, the current coronavirus pandemic has increased demand for his networks and launched business “into a whole ‘nother stratosphere.”

Do restrictions on municipal networks also impact open access networks?

However, 19 states currently have laws that prohibit their towns and cities from choosing whether or not to build municipal networks, according to Gigi Sohn, co-founder and former executive director of nonprofit interest group Public Knowledge, on a Broadband Breakfast Live Online event.

Sohn claimed these prohibitive laws “were encouraged and lobbied for by the big incumbent telecoms” such as AT&T and Verizon and called them “shameful.” Most such laws — such as those of Utah, for example — prohibit municipalities from directly offering broadband internet services.

But the Utah prohibition on offering internet services by municipalities has had a paradoxical effect: It spurred the creation of the largest open access network in the U.S., which is run by UTOPIA Fiber.

UTOPIA stands for the Utah Open Infrastructure Agency. In collaboration with its 11 city members, UTOPIA Fiber owns and operates a fiber-optic network. More than 25 private companies offer broadband services (the train cars) on the open access network (the railroad tracks).

Despite the obstacles in the way of adoption, Finér remains hopeful about the future of open access in the U.S. However, every country’s story is different is unique in both time and place, and the U.S. is no exception.

The biggest difference comes in the form of funding sources, he said. While the Swedish government and citizenry agreed early on that broadband was “essential infrastructure” that they were willing to invest in, U.S. companies will require the right kind of coaxing and incentives to build out open access networks.

Above all, the key to open access networks catching fire in the U.S. is a substantial increase in private investment.

Open Access

Financing Mechanisms for Community Broadband, Panel 3 at Digital Infrastructure Investment

Panel 3 video. Join the Broadband Breakfast Club to watch the full-length videos from Digital Infrastructure Investment.

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Video from Panel 3 at Digital Infrastructure Investment: Kim McKinley, Chief Marketing Officer, UTOPIA Fiber, Jeff Christensen, President & CEO, EntryPoint Networks, Jane Coffin, Chief Community Officer, Connect Humanity, Robert Wack, former Westminster Common Council President and leader of the Open Access Citywide Fiber Network Initiative, and moderated by Christopher Mitchell, Director, Community Broadband Networks, Institute for Local Self-Reliance

For a free article summarizing the event, see Communities Need Governance Seat on Broadband Builds, Conference Hears: Communities need to be involved in decision-making when it comes to broadband builds, Broadband Breakfast, November 17, 2022

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Join the Broadband Breakfast Club and get the complete January 2023 exclusive report

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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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Funding

Anticipating Launch, Yellowstone Fiber to Seek Federal Funds for Rural Broadband

With service beginning in late September, non-profit fiber ISP aims to serve rural Gallatin County

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Photo of Greg Metzger in July 2022 from Yellowstone Fiber

BOZEMAN, Montana, July 27, 2022 – Officials at the non-profit internet entity Yellowstone Fiber announced Thursday that they would pursue federal broadband funding to expand network construction in rural areas of its footprint in Montana.

Because every state is poised to receive a minimum of $100 million to expand broadband infrastructure under the bipartisan Infrastructure Investment and Jobs Act, officials at Yellowstone Fiber believe they are well-suited to obtain funding to connect homes, businesses, farms, and ranches to high-speed fiber internet in the sections of the Montana’s Gallatin County north of Bozeman.

Although Yellowstone Fiber is just going live with its first customers in September – and began offering pre-sales in late July – the new fiber entity believes that the availability of funding through the Broadband Equity, Access and Deployment program of IIJA offers a unique opportunity.

As with all states, Montana will receive a minimum of $100 million to expand high-speed broadband infrastructure to the nearly one-third of state residents who currently lack access.

Speaking about the impending launch of services on Yellowstone Fiber, CEO Greg Metzger said, “This is an important milestone for Yellowstone Fiber and we’re enormously excited to announce we’ll have the network live in a matter of weeks.”

“For decades, people in rural Montana have been limited by slow and expensive internet service and empty promises by cable providers. Today’s announcement signals we’re serious about connecting rural Gallatin County to high-speed fiber and the limitless possibilities that it brings,” he said.

Yellowstone Fiber is building an open access network, which means that Yellowstone builds, owns, and operates the fiber infrastructure, then leases space on its high-speed fiber to service providers, including Blackfoot Communications, Skynet Communications, Global Net, TCT and XMission.

In an interview, Metzger touted the role that open access networks play in enabling free market competition, including better prices, service, and reliability.

Metzger, an entrepreneur who previously manufactured plastic deposit bags for banks, sold that business and bought a furniture company in Montana.

Although he said he would rather be playing golf, when he stumbled across a new funding mechanism, he decided to create a non-profit entity designed to serve his community with fiber optic network services.

Yellowstone Fiber was formerly Bozeman Fiber, and was created in 2015 as an economic development initiative to address the lack of true high-speed broadband in Gallatin County, Montana.

A group was formed including the City of Bozeman, Gallatin County, the Bozeman School District and business leaders and funded by eight banks with a Community Reinvestment Act-designated loan.

This $4,000,000 was used to create a fiber ring connecting anchor tenants including the city, county and the school district, and also servicing the Cannery district and downtown Bozeman.

Anchor operations began in the fall of 2016, and commercial operations in February 2017. In 2020, the network formed an operational partnership with Utah-based UTOPIA Fiber to bring fiber-to-the-home services to every address in Gallatin County.

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