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Open Access Infrastructure Important, But Difficult to Develop, Say Digital Infrastructure Investment Panelists

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Screenshot of Jase Wilson, founder and vice president of growth at Ready.net, from the webcast

August 11, 2020 — Open access infrastructure is crucial, but it is difficult to raise the capital it requires, said participants in Broadband Breakfast’s Digital Infrastructure Investment conference on Monday.

The panel on infrastructure investment funds featured a discussion about the challenges and benefits of developing next-generation infrastructure.

Ben Bawtree-Jobson, CEO of SiFi Networks, said that funding open access projects can be challenging.

Visit Digital Infrastructure Investment for complete information and summaries of the sessions from the Broadband Breakfast mini-conference, which is being re-broadcast at Broadband Communities Virtual Summit.

“The amount of capital alone is quite daunting, really,” he said. “You can [have a large amount] and you’ll still probably only cover a small percentage of America.”

Chris Perlitz, managing director of the Municipal Capital Markets Group, agreed.

“If you can go to some sources like a pension fund that wants to buy some taxable return… there’s a resource there that can help you get the infrastructure built,” he said. “Really, the key is the long-term horizon, and capital.”

Panel moderator Jase Wilson, founder and vice president of growth at Ready.net, said that America was rapidly falling behind in broadband infrastructure.

“The United States of America just fell out of the top 10 broadband nations in terms of speed, and this is the nation where the internet began,” he said.

Wilson agreed with other panelists that the challenges to the rollout of open access networks can be difficult to overcome.

“If they didn’t have to build their own independent rogue access models, they might yield better outcomes, not only for the investors but also for the ISPs,” he said.

Bawtree-Johnson pointed to the importance of constructing open access infrastructure at a scale large enough to be profitable.

“It really needs scale, open access work — there’s no point in us building a 10,000-home network in a municipality and expecting 12 ISPs to come into that network and be successful,” he said.

Enhanced broadband infrastructure has become a necessity during the coronavirus pandemic. However, Blair Levin, former executive director of the National Broadband Plan, noted in another panel titled “The Future of Funding for Shared Infrastructure” that public policy decisions on the part of the Trump administration could conflict with the mission to provide broadband to all.

“It is difficult to lead the world in a unified effort when your fundamental message is, ‘America first and I don’t care about anyone else,’” he said. “So there’s a fundamental contradiction that most people pick up on.”

The stated goals of the Trump administration regarding China are often confusing and ill-defined, Levin continued.

“The United States has, for some time, said the most important thing is that we beat China and that we lead the world in 5G without ever describing the metrics by which we define leadership,” he said.

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Open Access

UTOPIA’s Projects Proceeding in California and Montana, CEO Says

Both the GSCA and Yellowstone Fiber are using UTOPIA’s techniques to provide open access broadband over fiber.

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Barbara Hayes (left) and Roger Timmerman (right) speaking at Broadband Communities Summit 2022 on May 4

HOUSTON, May 4, 2022 — UTOPIA Fiber’s open access model has found success in California, Montana, and Idaho as it continues to deploy across Utah, the company’s CEO said Wednesday.

“Right now, we are working with [Golden State Connect Authority] to identify various pilot areas for the project and have started preliminary engineering work to determine the initial project area,” Roger Timmerman said at the Broadband Communities Summit 2022.

During the press conference, Timmerman also pointed to UTOPIA’s expansion into Santa Clara, Utah, and its completion of its original 11 Utah cities by the end of 2022.

Timmerman was joined by partners Barbara Hayes of the Golden State Authority and Yellowstone Fiber CEO Greg Metzger as they delivered remarks on their joint ventures. The partnership will create the largest publicly owned fiber network in the US, and as it stands now, would span 38 of California’s 58 counties.

“California may be the world’s fifth-largest economy, but our state’s connectivity is decades behind,” Hayes said. “Investing in open access fiber will be transformative for California.”

Both Metzger and Hayes emphasized that their decision to partner with UTOPIA was largely informed by the company’s track record.

“We needed to have a partner who was successful and had done it before,” Metzger said. “For Montana, this is going to be a breath of fresh air.”

Yellowstone Fiber, formerly known as Bozeman Fiber, is a not-for-profit that will replicate UTOPIA’s open access model to provide broadband to the greater Bozeman region; it will own and operate the fiber but will rely on UTOPIA for assistance on the backend.

UTOPIA’s model of open access has long been a point of interest in the telecom industry. While some claim it will be a solution to the digital divide, other assert that it has merely created a “race to the bottom” where internet service providers are constantly pushed to undercut their completion. Timmerman and others have pushed back against the “race to the bottom” assertion, claiming that providers can find ways other than price to distinguish themselves from their competition, such as superior customer service. Additionally, they point to their recent track record as evidence that critics’ concerns that they can maintain a positive cash flow are unfounded.

Though UTOPIA, a sponsor of Broadband Breakfast, now has positive revenue and has served as a model for open access projects around the country, critics still point toward its more than $300 million in outstanding debt it accrued in its early days, before Timmerman was at the helm.

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Open Access

‘Worst Broadband City’ Brownsville Approves Open Access Fiber Project with Lit Communities

Lit Communities will operate the network, with subsidiary BTX Fiber as the last-mile provider. HMI Utilities is prime contractor.

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Photo of Elizabeth Walker and Andres Carvallo at the city council meeting.

BROWNSVILLE, Texas, April 1, 2022 — During a special city commission meeting on Wednesday, council members voted to approve a fiber project that will bring high-speed broadband to 100% of its citizens.

Elizabeth Walker, Brownsville assistant city manager, and Andres Carvallo, CEO and founder of CMG Consulting LLC, recommended that the council authorize two respondents, HMI Utilities with Lit Communities, for a combined proposal to maximize technical and financial capacity.

Brownsville, Texas, is a city of more than 182,000 people and is one of the cities with some have called the worst broadband city in the country.  The National Digital Inclusion Alliance in 2018 listed Brownsville and a neighboring community as one of the top two worst connected cities in the country with a population of more than 65,000. For Brownsville, 47.1% of households do not have broadband of any type, NDIA found

Lit Communities, a fiber-builder that partners with municipal, county and other government entities, will operate the network, with HMI Utilities as the prime contractor. Lit Communities subsidiary BTX Fiber will be the last-mile provider on the network. However, the project will be an open network with multiple internet service providers.

Standard service on the network will be at least 100 Megabits per second (Mbps) symmetrical.

The research for this project began nearly a year ago in April 2021 when Walker and Carvallo looked at different business models, like public policy only, public services, open access, infrastructure, municipal retail (business only and residential). They looked at these models in similar projects in Texas and across the country, including in places like Knoxville and Santa Cruz County. Eventually, they decided on an open access model.

Specifics of the Brownsville network

All citizens will have access to this broadband. “It is eight middle-mile fiber rings to address the full geography of Brownsville,” said Walker.

The city will own 100% of the middle mile and will be able to license it out in private-public partnerships to create revenue, as well as revenue from the last mile connectivity. To ensure affordability, there will be a cap on what providers can charge.

Affordability “is very important,” said Walker. “The crux of the consideration is just to not deliver access, but to make it affordable.”

This infrastructure will have a life expectancy of 50 to 100 years, said Walker.

Walker said that “evidence suggests that broadband services have a net positive economic and social impact to communities by enhancing key functions such as economic competitiveness, workforce development, training, educational capabilities, municipal operations, and smart city developments.”

This is part of the private-public partnership model of Lit Communities. The company recently partnered with Ohio’s Lorain-Medina Rural Electric Cooperative to install fiber on existing utility poles. In these projects, the municipality in question provides the capital necessary to build a middle mile or backbone network.

“We are not stopping with these initial groups of towns that we are looking at and working into right now,” said Rene Gonzalez, Lit Communities’ chief strategy officer. “It is just the beginning.”

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Open Access

Construction of Yelllowstone Fiber Network in Montana Begins Ahead of Schedule

The project will be Montana’s first open-access fiber-to-the-home network.

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Photo of Bozeman, Mont., from January 2011 by Mike Cline used with permission

WASHINGTON, March 24, 2022 ­– Montana fiber provider Yellowstone Fiber announced Wednesday that construction has begun on a $65-million network based in Bozeman, well ahead of anticipated pace.

The network, operated in partnership with large Utah-based open-access network UTOPIA Fiber (a sponsor of Broadband Breakfast), will be Montana’s first high-speed all-fiber internet network as well as its first open-access fiber-to-the-home network.

The start of construction for the privately-funded network comes only six months after initial announcement of the project.

Not only will the network connect every address in Bozeman, but it will also extend “deep into Gallatin County,” according to the developer.

Businesses are expected to receive speeds of up to 100 Gigabits per second and residential properties will experience up to 10 Gbps to create what the city of Bozeman has called “the first true gigabit city in the state of Montana.” Pricing plans are expected to be announced this spring.

The first six internet service providers to provide services on the network will be Blackfoot, Global Net, Hoplite Industries, Skynet, Tri-County Telephone Associates, and XMission.

Montana is one of the least-connected states in the U.S. About a third of residents in Gallatin County, in which Bozeman is a city, lacks internet access.

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