Could municipal broadband give city economic boost?

Like innovation districts and farm-to-table restaurants, municipal broadband networks are trending.
From Chattanooga, Tenn.’s publicly owned gigabit fiberoptic network to Google Fiber in Provo, Utah, schemes to provide a faster alternative to traditional Internet service providers have proliferated across the country.
For communities like Chattanooga, the motivation is economic development and a way to market the city to entrepreneurs. Elsewhere, civic considerations such as expanding Internet access in low-income neighborhoods or maintaining net neutrality play a larger role.
For others, a perceived failure of near-monopoly incumbent Internet providers to offer service as fast or as cheap as they could is reason enough to introduce government competition.
Now discussions about building a municipal fiber optic network are moving to Providence.
Democratic mayoral candidate Jorge Elorza, a former housing court judge, has proposed building one in the city to help stimulate business, innovation and the local knowledge economy.
“We have already missed the last technology boom that [Cambridge, Mass.,] has benefited from, and we cannot afford to be behind the curve and miss out again,” Elorza said in a phone interview. “A number of other cities have created broadband networks. Right now citywide broadband is bold, but in truth, in 15 to 20 years it will be standard. We have to invest now.” To set his plan in motion, Elorza will need to be elected, and he’ll also need to work out the details of his plan.
Municipal fiber networks come in a variety of shapes and sizes and rely on different business models.
Chattanooga’s network was built by its publicly owned electric utility, which happened to be replacing its transmission lines with new fiber optics and decided to add data to the mix. The resulting gigabit television and Internet service for residential and commercial customers remains run by that publicly owned utility.
In Provo, the city built the network, then sold it to Google Fiber, which runs it along with others in Kansas City, Mo., and Austin, Texas.
Elorza said he is most intrigued by a public-private plan in North Carolina, where six cities and three universities solicited bids from private companies to build and run a fiber network for them. AT&T was chosen and is in the process of building out the network. As Elorza pointed out, Rhode Island has already taken a partial step toward creating a public fiber optic system with the construction of Beacon 2.0, a 450-mile network run by the Oshean Inc. consortium of government and nonprofits.
Constructed at a cost of $32 million, Beacon 2.0 network was completed last fall and connects more than 100 colleges, schools, hospitals and government agencies in Rhode Island and eastern Massachusetts. It used $21.5 million in federal grants.
Oshean President and CEO David Marble said while there haven’t been any substantive discussions to do so yet, the Beacon system was built with the idea that it could potentially serve as a foundation for a larger network.
Even in the short time since the base network was completed, other institutions have paid to connect to the system, such as Johnson & Wales University.
“We don’t support the commercial and residential markets and in order to do that we would have to work with a partner, but that could be done,” Marble said. “We built a pretty extensive fiber optic network with a federal grant, which said it should be open to other partners coming in and using pieces of it. Something like this would fall into that category.”
Theoretically, the Beacon fiber could act as a main line or central artery carrying data through Providence, or a larger area, from which “laterals,” the side streets of the Internet, could be extended.
Although he was hesitant to try to quantify how more work building the laterals would be compared to the main Beacon line, Marble guessed the balance of construction would probably be greater than what has already been done.
“Municipal networks are very intriguing, but it all comes down to whether they can do it for the right price and can find the right partner,” Marble said. “I would love to work with whoever wanted to try it, but the costs are not trivial.” Another question with municipal broadband, like any government investment in technology, is whether unforeseen advances will eventually render it obsolete.
Potentially, wireless technology could replace some of the Internet connectivity now provided by wires, especially for residential and business customers who don’t use the massive amounts of bandwidth made possible through fiber.
Marble said he could see a future in which wireless is eventually used to connect individual homes or businesses to neighborhood hubs, but that ever-increasing bandwidth demands will require substantial wired infrastructure.
In addition to Beacon, Elorza pointed out that commercial Internet providers such as Cox and Verizon also have most of the state wired with fiber, although that would mean partnering with them.
Elsewhere in the country, incumbent opposition to the government imposing itself on the market has frozen some attempts at municipal broadband.
Timothy Culhane, an associate professor of information technology at New England Institute of Technology, said the biggest question about municipal broadband is where it leaves the existing service providers.
“Whether it’s the wave of the future remains to be seen and my biggest question is the ISPs – can they co-exist?” Culhane said. “I think initially they would co-exist, but I don’t know long term.”
The government’s entry into the information technology realm raises the question of whether the Internet is a private service or a public utility.
Regardless of who provides it, Culhane said even though most businesses, let alone residents, wouldn’t use all of the bandwidth a fiber optic network can provide, that capacity could induce innovation the same way transportation infrastructure induced travel demand over the last century.
“It is one of those things where if you build it, they will come,” Culhane said. “They couldn’t have filled five-lane highways when they designed the Interstate system, but now they are jammed. If you build something bigger, it is more likely more people use it. You will see everything become bigger, faster more complex.” •

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