How much is a fiber broadband network worth to a community? Earlier this year, Seattle, Wash., decided not to build a municipal fiber network because the cost of doing so would have been somewhere between $460 and $630 million. That’s a lot of money, so it’s easy to see why the city council was hesitant to proceed. But a new study suggests that even at that price, a fiber network may be a bargain.
In June, Bento Lobo, a finance professor at the University of Tennessee at Chattanooga, wrote a study titled “The Realized Value of Fiber Infrastructure in Hamilton County, Tennessee.” Behind the dry title is an attempt to determine the overall value the fiber-optic network has given to Chattanooga, Tenn. According to the study, since its launch in 2010, the city’s fiber-optic, gigabit municipal network created between $2,832 and $3,762 for every resident of Hamilton County — or a total benefit between $865 million and $1.3 billion. That’s well in excess of the project’s cost of almost $227 million, $112 million of which came from a Department of Energy grant. What’s more, the network created somewhere between 2,800 and 5,200 new jobs.
Join the Club
If accurate, these numbers make a strong argument in favor of other cities following suit. A recent study from Broadband Communities says that 165 cities across 38 states have public or mixed public-private community fiber networks. That’s a 15-percent increase compared to the 143 community fiber networks online in 2014, and as many as 200 new communities are investigating the potential of community fiber networks. Next Century Cities, an organization devoted to making broadband Internet more accessible, has 118 members. Some of these members, including Chattanooga, already have their own network, but who better to share their expertise with than communities interested in becoming the next gig city?
It’s not just Chattanooga and other members of Next Century Cities urging other cities to move forward in the creation of municipal networks. The Federal Communications Commission (FCC) has been a voice in favor of the freedom for communities to do just that; it was the FCC’s pre-emption policy that made the idea possible for many communities. In a September 9 speech at the National Association of Telecom Officers and Advisors Annual Conference, Gigi Sohn, counselor to FCC Chairman Tom Wheeler, said:
“Rather than wait for incumbent ISPs to build the network your cities want and need, you [local governments] can take control of your own broadband futures. Rather than thinking of yourselves as taxers and regulators, which has been the traditional role, you can think of yourselves as facilitators of the kind of services you’ve been begging the incumbents to provide for years.”
Sohn mentioned Sandy, Ore., and Westminster, Md., as examples of communities that created their own gigabit fiber networks. Both are small cities — Sandy’s population is only 10,309, and Westminster’s is 18,724 — but there’s no reason America’s largest cities can’t join them. Los Angeles, for example, has a fiber network, though it’s for business customers only.
Build or Buy, Whatever Works
Not every community wants to build its own network, and that’s okay. In some cases, cities that built their own networks did so because private Internet Service Providers (ISPs) decided it wasn’t worth the trouble; but for other communities, the private sector is the right answer.
Huntsville, Ala., attracted a builder for its upcoming fiber network via a traditional request for proposal, the same way a city might seek bids for a garbage service contractor. Sometimes it’s even easier: when Google began service in Kansas City, it prioritized service based on areas that demonstrated sufficient interest. If a community can demonstrate a potential for profit, the private sector may do all the work.
Adapting Tomorrow’s Technology to Yesterday’s Cities
The challenge of creating a broadband network in a community never designed for one is obvious. But what about connecting communities of tomorrow? The answer is building new communities with broadband access in mind from the beginning, and it’s a topic we’ll examine in part two of this series.
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