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.
UTOPIA Fiber Pushes into Southern Utah
The expansion will bring fiber-to-the-home to residents of two additional Utahn cities.
WASHINGTON, January 6, 2022 – Community-owned fiber optic network UTOPIA Fiber announced in a press release Wednesday that it will implement fiber-to-the-home service in the Utah cities of Cedar Hills and Santa Clara.
The expansion into Washington County’s Santa Clara marks UTOPIA Fiber’s first expansion into southern Utah.
“We’re really excited to continue our momentum in Utah County and to venture into southern Utah where Santa Clara will become the first all-fiber city in Washington County,” said Roger Timmerman, executive director of UTOPIA Fiber.
This move marks UTOPIA’s 18th and 19th city expansions and comes with a $12 million price tag. Just last month, UTOPIA completed its network in Payson City, Utah. The telecom provides business services in 50 cities.
In all its serviced cities, UTOPIA offers residential speeds of up to 10 Gigabits per second and business speeds of up to 100 Gigabits per second – both the fastest respective speeds offered in the U.S. In total, the network provides fiber availability to more than 130,000 businesses and residences across its 50 serviced communities.
In its press release, UTOPIA promoted its expansion by citing research showing that residential and commercial property values increase when they are served by a fiber network. It added that its open access model, which allows infrastructure sharing with other providers, “protects a net-neutral internet without throttling, paid prioritization, or other provider interference.”
UTOPIA Fiber is a Broadband Breakfast Sponsor.
Experts Debate Merits of Open Access Models on Broadband Breakfast Live Event
Keller and Heckman Partner Jim Baller says model could lead to a race to the bottom, but UTOPIA CEO disagrees.
WASHINGTON, December 16, 2021 – Though open access projects are finding success in some parts of the country, some experts remain unconvinced that the model will prove viable for most communities.
During the Broadband Breakfast Live Online event on Wednesday, UTOPIA Fiber Executive Director and CEO Roger Timmerman and Jim Baller, partner at law firm Keller and Heckman LLP partner, debated the merits of the model that allows service providers to use the same infrastructure.
Timmerman, whose UTOPIA Fiber operates an open access model in Utah and southern Idaho, said his company has seen success with open access fiber infrastructure being a sustainable and scalable model to meet whatever demands future technology may place on consumers and businesses.
Sixteen internet service providers use infrastructure built and leased by UTOPIA, a sponsor of Broadband Breakfast, to offer residential areas up to 10 Gigabits per second symmetrical speeds.
But Baller said he is concerned that shared infrastructure will just force providers to engage in a price war that will lead to a race to the bottom. He painted a picture of an open access model whereby wholesalers who lease their infrastructure to internet service providers find themselves in a kind of purgatory where no one is making any money – the wholesaler is unable to compel ISPs to raise their prices, and the ISPs feel they can only compete by undercutting their competition. He described the situation as “open access run amok.
“I would love to see open access work, I just urge caution, because you need to do hard analysis in a particular market,” said Baller. “Open access may not be something that is possible up front, but it can be over time.
“You have to look at the numbers very carefully and assess what the circumstances are and make your decision based on what is in front of you,” he said. “There is no one size shoe that fits all in these circumstances.”
In response to the criticism that open access will drive prices into the ground, Timmerman said that the largest provider in UTOPIA’s network is also the most expensive. “It has not been a race to the bottom, it has actually been the opposite,” he said.
Timmerman added successful providers are ones “that can differentiate themselves on quality, reputation, consumer privacy,” and added that the nature of the model allows them to do so at a low barrier to entry.
Timmerman described how UTOPIA has been able to “raise the bar” on their standards for accepting ISPs to partner with, and how they have had to “beat [companies] off with a stick,” due to increased interest in working with UTOPIA.
“We want well established, successful companies because we have a lot on the hook – I cannot afford to put [these] assets at risk with some fly-by-night company. We work hand in hand with providers on quality and reputation to make sure that we both win and make sure that cities and participants win.”
For his part, Timmerman conceded that there is no “one size fits all model,” but argued that most communities’ needs can be satisfied through the framework of an open access build.
“We have had a lot of conversations with communities; what [communities] have to bring to the table and what their needs are, and how we might fill all those roles and deliver a successful system.
“The more a city wants and dictates into a project, the more skin in the game they may need to have,” Timmerman added.
Our Broadband Breakfast Live Online events take place on Wednesday at 12 Noon ET. You can watch the December 15, 2021, event on this page. You can also PARTICIPATE in the current Broadband Breakfast Live Online event. REGISTER HERE.
Wednesday, December 15, 2021, 12 Noon ET — How Public Private Partnerships Represent an Opportunity for Broadband Deployment
In the past two years, public and private entities have greatly increased their collaboration to expand broadband access for Americans. In the wake of the coronavirus pandemic, the telecom industry has been forced to find innovative solutions to connect households to essential online services. In this Broadband Breakfast Live Online event, we will explore the factors driving public-private partnerships in telecom and look at where such partnerships can take us next. Various economic and business forces underlie these partnerships. We’ll also discuss the urgent need for these partnerships in the fight to connect the country.
Panelists for this Broadband Breakfast Live Online session:
- Jim Baller, Partner, Keller & Heckman
- Roger Timmerman, CEO, UTOPIA Fiber
- Dwight ‘Doc’ Wininger, Director of External Relations, Allo Fiber
- Drew Clark (moderator), Editor and Publisher, Broadband Breakfast
- Broadband Partnerships, by Jim Baller et al. for the Journal of Local Government Law
- Public Infrastructure/Private Service, by Jim Baller et al. for the Benton Institute for Broadband & Society
- The Era of the Broadband Public-Private Partnership, by Joanne Hovis, Ryland Sherman and Marc Schulhof for the Benton Institute for Broadband & Society
- UTOPIA Fiber: A Model Open-Access Network, by Drew Clark, for Broadband Communities
Jim Baller is a partner at Keller & Heckman. He was founder of the US Broadband Coalition, a diverse group that fostered a broad national consensus on the need for a national broadband strategy and recommended the framework that was subsequently reflected in the Federal Communications Commission’s National Broadband Plan. A consultant to Google’s Fiber for Communities project, he is also the co-founder and president of the Coalition for Local Internet Choice, an alliance that works to prevent or remove barriers to the ability of local governments to make the critical broadband infrastructure decisions that affect their communities.
Roger Timmerman has been serving as UTOPIA Fiber’s Executive Director since 2016 and has been a technology management professional in telecommunications and information technology for over 15 years. Roger has been designing and building networks throughout his career in various roles including Vice President of Engineering for Vivint Wireless, CTO for UTOPIA Fiber, Network Engineer for iProvo, and Network Product Manager for Brigham Young University. Roger earned his Bachelor of Science and Master of Science degrees in Information Technology from Brigham Young University.
Dwight ‘Doc’ Wininger (pronounced WINE-ing-grr) has worked on telecommunications policy issues since the 1980s, first as Executive Director of the Nebraska Public Service Commission and then for a variety of private sector providers and consulting firms. He has worked on fiber optic deployments in multiple states and has been a featured speaker at various conferences on rural broadband deployment. In his current position, Wininger is responsible for local, state and federal government relations for ALLO Communications and is also heading up market development for the company’s expansion into the State of Arizona.
Drew Clark is the Editor and Publisher of BroadbandBreakfast.com and a nationally-respected telecommunications attorney. Drew brings experts and practitioners together to advance the benefits provided by broadband. Under the American Recovery and Reinvestment Act of 2009, he served as head of a State Broadband Initiative, the Partnership for a Connected Illinois. 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.
UTOPIA Fiber Completes Payson City Project and Publishes Results of Customer Feedback Survey
UTOPIA customers deep in red states favor net neutrality by a wide margin.
November 29, 2021 – UTOPIA Fiber announced the completion of a fiber-optic internet network in one of its original 11 cities of Payson, Utah, on November 22.
All 20,000 residents and businesses in Payson City, Utah, have access to UTOPIA’s all fiber, open-access model, according to UTOPIA Fiber. Payson is the eighth of the original group of 11 cities to finalize its broadband infrastructure deployments.
“The original cities were visionaries before their time,” said UTOPIA Fiber Chief Marketing Officer Kimberly McKinley. “We need to give a lot of credit to Payson. Back in 2002, 2004, when UTOPIA was getting off the ground, they saw the benefit of our model.”
“They saw the vision and where the future was headed almost 20 years ago.”
Today, UTOPIA Fiber is deploying broadband infrastructure in 17 cities across Utah and southern Idaho. UTOPIA Fiber Executive Director Roger Timmerman said that the three remaining original cities will have their projects completed by the end of 2022.
UTOPIA’s model is entirely funded through subscriber revenue, at no cost to taxpayers. Based on UTOPIA’s recent surveys, the subscribers in question view the service as a worthy investment.
Annual customer feedback survey
Also, on Oct. 27, UTOPIA Fiber released the results of their annual customer feedback survey. Among other statistics, UTOPIA Fiber reported that the number of customers working from home had increased by more than 230 percent since the outset of the COVID-19 pandemic.
Additionally, while legislators around the country squabble over how to define broadband – whether it ought to be 100 Megabits per second (Mbps) download and 20 Mbps upload, or 100 Mbps symmetrical, nearly half of UTOPIA’s customers purchased speeds over 1 Gigabits per second, which is 10 times faster than 100 Mbps.
Customers need faster speeds to address the myriad services that simply did not exist in the past, many believe. For example, 68 percent of customers are subscribed to a streaming service that did not exist three years ago, and the use of home security connected to the internet rose by 71 percent since 2018.
And 83 percent of consumers stated that they were glad they had invested in UTOPIA, 76 percent stated it had improved their quality of life, and 75 percent said their community is better because of UTOPIA.
In addition to high levels of customer satisfaction, UTOPIA also found that consumers were strongly in favor of net neutrality policies, with 92 percent of respondents indicating as much.
“A few years back we saw an influx of customers that came over to the UTOPIA system because that our providers are net neutral,” said McKinley. “I think that that speaks to people who want more privacy and control over their user experience. I think that is what we’re seeing at UTOPIA Fiber.”
Despite being generally favorable toward the practice up through the Obama Administration, net neutrality was struck down in the U.S. in 2017 by the Trump Administration’s FCC led by Ajit Pai. Though conservatives have historically portrayed net neutrality as an example of government overreach, McKinley argues that Utah is an example of why this issue should not be a partisan one.
“[This data] shows that people do not want to be beholden to big telcos who have control of their entire user experience. I think our survey proves more than anything that this is a bipartisan topic, and this is not a blue versus red discussion,” she said. “[Consumers] just want better.”
UTOPIA Fiber is a sponsor of Broadband Breakfast.
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