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Utility-Based Broadband Touted as Solution for Addressing Digital Divide

Broadband infrastructure can be seen as a fourth utility after water, gas and electricity.



Photo Sean Stokes from Keller and Heckman

HOUSTON, May 5, 2023 – A utility-based broadband model is the only solution to bridge the digital divide, panel heard at the Broadband Communities Summit Thursday. 

“If we’re going to solve the digital divide, we need to use the utility model,” stated Josh Leonard from engineering company Burns and McDonalds. 

A utility model, sometimes dubbed municipal broadband, is broadband infrastructure owned by public entities. Service is provided to residents by service providers that lease publicly owned networks in an open-access system.  

Following the COVID-19 pandemic, most state and city officials understand that broadband needs to be the fourth utility – after water, gas and electricity – said Leonard, but they do not treat it as such. 

Utilities understand how to operate large infrastructure projects that connect hundreds and thousands of homes, said Sean Stokes, partner at Keller and Heckman law firm. Utilities already have a core internal communication capability and already have essential infrastructure in place such as utility poles. 

Although utilities rarely want to be an internet service provider, Stokes continued, they are uniquely positioned to effectively run the network and lease it to providers. Open access enables partnerships with entities that want to be investors but don’t want to operate or be a provider, said Ashley Poling of fiber network software company COS Systems. 

Building single-use fiber, as many ISPs do when connecting communities, harms communities by requiring multiple digs in the future. The goal is to build capacity for all current and futures once, said Franciso Arbide of NextEra Infrastructure Solutions 

Does so allows more flexibility to add providers, eliminates issues if providers have poor service, and put pressure on non-performing providers, said Arbide. 

Entities looking to invest in large-scale infrastructure investments are not making realistic assessments of the actual cost of deploying infrastructure, cost and time to access utility poles, increased cost and delay in supply chains, and labor shortages, said Stokes. The best solution is to utilize the assets that utilities already have in their toolbelt, he said. 

Experience is the number-one priority when looking to build a broadband project, agreed Seema Patel of Chapman and Cutler. “Having experience in the industry is really going to be critical,” she said. 

“This infrastructure-based utility model is what succeeds,” said Poling. “The states that understand this will really achieve almost 100 percent digital equity. Others will not.”

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Utah City Approves UTOPIA Fiber Build

UTOPIA continues to expand open access model builds.



Photo of Bountiful City Hall

BOUNTIFUL, May 24, 2023 – The city council in Bountiful, Utah, voted unanimously to approve the building of a city-owned fiber network by Utah-based service provider UTOPIA Fiber Tuesday. 

The open access fiber infrastructure will be owned by the city but operated by UTOPIA Fiber, which will then lease the fiber to internet service providers. 

City council members expressed their resounding support for the program. We believe that the estimates of take rates are conservative and reasonable when compared to like communities, said City Manager Gary Hill, pointing to neighboring town Centerville that has 49 percent take rate on its city-owned network. 

Bountiful will issue $43 million in bonds to fund the program, announced the city. The debt service for the bond will be paid for using system revenues with any excess revenue invested into affordability assistance, city council members said.  

The initial contract term is 10 years with buildout expected to take 2-3 years. The city anticipates that it will make profit on the investment within four to five years of operation. 

In 2022, at the request of residents, the city issued a request for proposals that were released to potential fiber providers to build and operate a city-owned network. In January, Bountiful officials began contract negotiations with UTOPIA. 

“The purpose of the City’s involvement with fiber is to provide a competitive marketplace for internet service providers through an open access network,” read the city’s statement.  

The announcement comes months after West Haven, Utah announced its contract with UTOPIA Fiber for a city-wide network. 

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Open Access

AT&T Closes Open Access Fiber Deal With BlackRock

In a new joint venture, AT&T will expand its fiber network across the nation.



Photo of Christopher Sambar of AT&T

NEW ORLEANS, May 12, 2023 – AT&T is set to invest several million dollars of capital into fiber builds across the country as it announces the closing of its joint venture deal with fund manager BlackRock, the company said.  

In December, AT&T and BlackRock announced the formation of their joint venture, Gigapower LLC, to operate and deploy a fiber network to 1.5 million customers using a commercial open access platform.  

The deal between the companies closed Thursday. According to the press release, the new company’s goal is to “create the United States’ largest commercial wholesale open access fiber network to bring high-speed connectivity to more Americans.” 

“We believe fiber connectivity changes everything. That’s why we’re already one of the biggest investors in fiber in the United States,” said John Stankey, CEO of AT&T in a statement.  

“The demand for high-speed connectivity is unprecedented, and through this innovative partnership with BlackRock, one of the world’s foremost investors in infrastructure, we’re able to connect even more people and businesses, accelerating our efforts to help close the digital divide,” he said. 

Gigapower will enable AT&T to expand its fiber reach beyond its traditional areas and spread across the country, read the press release. BlackRock brings significant expertise and capital to support the buildout. 

The company expects to expand into Las Vegas, Nevada and areas of Arizona as well as Northeastern Pennsylvania and parts of Alabama and Florida that are currently outside of AT&T’s service areas. 

Christopher Sambar, executive vice president of AT&T, said in a Connect (X) event Wednesday that the company has already invested millions of dollars to build the most expansive fiber network in America.  

Between 2018 and 2022, AT&T invested $120 billion into the US economy via capital expenditures, he said, making the company one of the largest capital investors in America. 

Fiber is the backbone of wireless and 5G technology, he said. It is essential that the industry builds the foundation of fiber to support 5G and enable further innovations in the technology. 

According to Sambar, well over 170 million customers are being serviced with high-speed 5G networks and close to 300 million are serviced with speeds close to 5G.  

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Open Access

Network Operators Can Prevent Price Wars in Open Access Model, Panel Hears

Network operators can take steps to prevent the biggest risk to open-access networks: A race to the bottom.



Photo of Roger Timmerman of UTOPIA Fiber and Mitchell Shook of Advanced Stream Broadband

HOUSTON, May 4, 2023 – Network operator intervention can prevent a price war between internet service providers on an open access network, said Roger Timmerman, CEO of UTOPIA Fiber at a Broadband Communities event Wednesday.

In an oopen access network, broadband infrastructure is owned one entity, which can be a network operator or a municipality or other form of cooperative governance. The network operator leases the infrastructure to internet service providers. In essence, an open access model brings competition to monopolizing incumbents to the benefit of the user, said Ben Seo from marketing firm Harrison Edwards.

An open access network empowers communities because it gives consumers the power they need to hold providers responsible, continued Seo. Because the model enables direct competition, consumers can use their dollars to demand certain services from their providers.

Although the model is touted as the “gold standard” by UTOPIA Fiber and other network operators, some commentors are concerned that the model will reduce ISPs to price-war strategies to eliminate competition and retain market share.

Price gouging “is a concern” for UTOPIA, said Timmerman. “The providers are stakeholders for us, if the providers are not successful, we have failed,” he said. The company has taken measures to ensure the long-term scalability of its providers. The ISPs on UTOPIA’s network are limited to one price change a month.

According to Timmerman, the rules have resulted in providers finding other ways beyond price to differentiate themselves and their services to consumers. In fact, the most expensive provider on its network is also the fastest growing because it has positioned itself in the public mind as reliable and trustworthy.

We need all types of providers on the network to meet the needs of all the niches of the market, he said. There are providers that focus on connecting multi-dwelling units, those that target government buildings, those that connect school systems, and others that have specialties to fit the needs of the market.

“The network operator does have the responsibility to get involved in [pricing] to protect the ISPs and assure them that they can sustain their business long-term,” agreed Greg Wilson, founder of South African open access model AEX, Automation Exchange

Open access invites innovation in the customer experience, added Seo. Instead of driving down prices unreasonably, it incentivizes providers to find ways to improve the customer experience, enhance lives, and listen to the needs of the consumer. As a result, an open access model sells the product better, he said.

Furthermore, small, local providers are drawn to open access because it alleviates them of the necessity of investing in high-cost infrastructure. In that way, they can focus on selling reliable service to the consumer, said Timmerman.


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