& cplSiteName &

Muni Networks: The Public's Not Buying

Light Reading
News Analysis
Light Reading

SALT LAKE CITY -- Broadband Cities Conference -- Elected officials are excited about municipal networks. Incumbent carriers are fretting about them. But the average Joe still hasn't got a clue, according to several sources at the conference sessions held here.

Instead of battle-planning for the RBOCs and sharing best practices, city managers and network equipment vendors here were addressing a more fundamental problem: How do you convince a bunch of folks in the middle of Utah that they need 100 Mbit/s going to their homes?

DynamicCity Inc. chief marketing officer Ben Gould says consumers will understand the beauty of municipal networks once the word of mouth gets going in neighborhoods where the fiber has already been laid. “Nobody thought they needed DSL before it was available; they were used to dialup,” Gould says.

But even here at municipal broadband heaven, most of the 450,000 consumers passed by the Utah Telecommunication Open Infrastructure Agency (UTOPIA) network’s fiber are not yet clamoring to get hooked up. Out of the 5,000 to 8,000 Gould says are currently reached by UTOPIA's network, only around 500 have signed up.

Municipal networks like Utah’s own the fiber-optic network over which a set of private sector companies run their services to consumers and businesses. DynamicCity is the privately held entity charged with building, managing, and contracting services for the publicly owned UTOPIA network. And while incumbent cable and telephone companies can compete on price, they typically cannot offer the high-bandwidth services that the muni’s fiber infrastructure makes possible.

So why the hype around municipal networks? Much of the hoo-ha has to do with city officials trying to make their fair burgs more attractive locations for corporations. “Chattanooga is moving from a manufacturing economy to a service economy, and we don’t believe we can attract new businesses unless we can provide broadband service,” says Electric Power Board VP Kathy Harriman. EPB is Chattanooga’s public power utility.

Harriman says two large insurance companies headquartered in Chattanooga have been pushing for the city to build a network so that more of its employees can work from home. She says in Chattanooga, (NYSE: BLS) and (Nasdaq: CMCSA, CMCSK) make DSL available almost everywhere, but, she points out, DSL is not broadband.

Residential consumers will eventually understand the appeal of fiber-based access, too, Harriman says. “Even if you’re into entertainment, some of the new applications like high-definition TV and VOD and gaming, people are going to need the bandwidth for those kind of applications.”

Of course, buying into an idea and being able to sell it to the public are two different things. That's why this particular conference -- rather than focusing on pricing, regulatory issues, and network management -- is chockablock with Scandinavian and Asian vendors demonstrating high-bandwidth, collaborative applications, such as telemedicine. This show is virtually a promotional vehicle for broadband access, as if the idea needed a boost.

So, while municipal broadband networks are still trying to get established, the incumbents on the ground here -- Qwest Communications International Inc. (NYSE: Q) and Comcast -- are doing what they can to slow uptake of municipal services by dropping Internet access prices dramatically in specific locations. Why buy 100 Mbit/s when 2 Mbit/s is good enough?

As for the vendors, there's some hope that the buzz around municipal broadband networks will turn into real deployments and then real equipment sales. “Many equipment vendors feel that they can sell to the five or six monopolies and that’s it,” DynamicCity’s Gould says (see Riverstone Provides Sales Update).

— Mark Sullivan, Reporter, Light Reading

(5)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
User Rank: Light Beer
12/5/2012 | 3:00:56 AM
re: Muni Networks: The Public's Not Buying
Is marketing the big problem here? Having a network and services is all very well, but as all telcos know that's only part of the story. Maybe these muni guys need some help with their 'outreach'...
User Rank: Light Beer
12/5/2012 | 3:00:55 AM
re: Muni Networks: The Public's Not Buying
[i]Out of the 5,000 to 8,000 Gould says are currently reached by UTOPIA's network, only around 500 have signed up.[/i]

A 10% take rate in a place that doesn't have a lot of tech weenies or a University in town isn't all that out of line with the data for broadband over Cable. $40/month is substantial when you have 12 children to feed and tithe 20% of your income to the church.
User Rank: Light Beer
12/5/2012 | 3:00:53 AM
re: Muni Networks: The Public's Not Buying
In UT, its all about the Church. Locals do not read much. However, if Gordon Hinkley says they can avoid the traffic to Salt Lake and watch Conference at home, they will buy up in droves. He just hits on that chip implanted in their heads. Think of it, the Tabernacle Choir every Sunday! Broadband must therefore be defined to include a decent video stream.

P.S. if UTOPIA includes Provo, you do have BYU.
User Rank: Light Beer
12/5/2012 | 3:00:46 AM
re: Muni Networks: The Public's Not Buying
Most of the networks I know of have developed out of city government or local power companies' IT departments. They have enough competence to build decent networks, but they know nada about selling telecom services. Convincing customers to buy electricity is a whole lot simpler than convincing them into buying 100 Mbit broadband. The skills needed are very different. It's hilarious to see how techie-oriented these providers are - average Joe doesn't care about fiber vs copper.
User Rank: Light Beer
12/5/2012 | 3:00:34 AM
re: Muni Networks: The Public's Not Buying
People don't care about getting 100Mb/s to their
house, they care about applications. Verizon's FiOS
is offering 20 HD channels day 1. That's something
you can advertise. I think secure remote backups of
your home PC would be a service that would sell.
You've got to market the services, not the
Educational Resources
sponsor supplied content
Educational Resources Archive
From The Founder
Cisco's Conrad Clemson, recently promoted to head up the company's Service Provider Apps & Platforms developments, talks to Light Reading's Founder and CEO Steve Saunders about how he's bringing cloud video, mobile and virtualization together to empower network operators.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Custom TV
CommScope – Meeting the Demands of Tomorrow's Networks

3|24|17   |     |   (0) comments

Phil Sorksy, Vice President International at CommScope, discusses addressing the challenges faced by service providers today, and as future trends emerge.
LRTV Huawei Video Resource Center
AMS-IX & Huawei's OSN 902

3|24|17   |     |   (0) comments

Huawei shows how its OSN 902 platform helps the Amsterdam Internet exchange to connect the world using multiplexing.
LRTV Huawei Video Resource Center
Huawei's Smart Energy Innovation Center

3|24|17   |     |   (0) comments

In Nuremberg, Huawei showcases its latest capabilities in the digitalization of Internet resources, network infrastructure and intelligence at its Smart Energy Innovation Center.
Valley Wonk
OFC & Hyperscale: A Good Mix?

3|24|17   |   01:50   |   (0) comments

Cloud and telecom players want different types of equipment for their networks, as the chatter at OFC reveals.
LRTV Custom TV
Etisalat on NFV Journey

3|24|17   |   10:37   |   (0) comments

Etisalat is a service provider that prides itself on bringing innovative technologies to the markets it serves. It was one of the first operators to implement 3G and leads the pack in fiber penetration. Now, Esmaeel Al Hammadi, Etisalat's SVP of Network Development, explains the operator's journey to virtualization, beginning with the network core, as well as the ...
LRTV Huawei Video Resource Center
Huawei at CeBIT 2017: Day 3

3|22|17   |     |   (0) comments

Light Reading reports from CeBIT 2017 in Germany, where Huawei is exhibiting on the application of technologies and key business verticals such as transportation, smart city, manufacturing, media and finance.
LRTV Documentaries
No Regrets: Cox's Finkelstein on Fiber & More

3|22|17   |     |   (0) comments

At the Cable Next-Gen Technologies & Strategies event in Denver, Cox's Jeff Finkelstein examines the cable capex conundrum.
LRTV Documentaries
Cable Next-Gen: The 'Mile High' View From Denver

3|22|17   |   11:56   |   (0) comments

Alan Breznick kicks off the Cable Next-Gen Technologies & Strategies event in Denver, casting his thousand-yard stare over cable's current competitive landscape.
LRTV Huawei Video Resource Center
Huawei at CeBIT 2017: Day 2

3|21|17   |   2:27   |   (0) comments

Light Reading reports from CeBIT 2017 in Germany, where Huawei is exhibiting digital transformation solutions around IoT, smart data centers, OpenCloud ecosystem and its newly announced storage-as-a-service solution.
LRTV Custom TV
Driving Better Mobile Customer Experience While Transforming the Mobile Network

3|21|17   |   7:47   |   (0) comments

The Citrix NetScaler mobile gateway is an intelligent traffic management solution which can markedly improve the customer experience provided by mobile operators, even when traffic is encrypted. Critical network services can be consolidated and virtualized using NetScaler. Because of the unique architecture, NetScaler can be deployed on any hypervisor, on a ...
LRTV Custom TV
Mastercard: What's Next for Mobile Payments?

3|21|17   |   7:49   |   (0) comments

2017 marks the fifth consecutive year for Mastercard at Mobile World Congress and it was a great time to reflect on the amazing advances the payments industry has made as well as discuss "What's Next' in the digital commerce future. We spoke to James Anderson, executive vice president of digital payments at MasterCard, about digital wallets to tokenization to ...
LRTV Custom TV
Mastercard: 2 Billion Adults 'Trapped' in Cash Economy

3|21|17   |   03:51   |   (1) comment

Despite advances made in the last several years, two billion adults around the world are trapped in a cash economy and lack what we take for granted -- a safe way to receive, save and use money. Shamina Singh, executive vice president of sustainability and president of the Mastercard Center for Inclusive Growth, chats about how Mastercard is developing new ways to ...
Upcoming Live Events
May 15-17, 2017, Austin Convention Center, Austin, TX
May 15, 2017, Austin Convention Center - Austin, TX
June 6, 2017, The Joule Hotel, Dallas, TX
All Upcoming Live Events
With the mobile ecosystem becoming increasingly vulnerable to security threats, AdaptiveMobile has laid out some of the key considerations for the wireless community.
Hot Topics
High-Band 5G: Let's Address the Range Question, Shall We?
Dan Jones, Mobile Editor, 3/21/2017
Eurobites: A1, Nokia Turn It Up to 11
Paul Rainford, Assistant Editor, Europe, 3/22/2017
FTTH No Slam Dunk for Cable
Carol Wilson, Editor-at-large, 3/23/2017
Welcome to the Wild West of Privacy
Carol Wilson, Editor-at-large, 3/24/2017
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
TEOCO Founder and CEO Atul Jain talks to Light Reading Founder and CEO Steve Saunders about the challenges around cost control and service monetization in the mobile and IoT sectors.
At MWC 2017, Qualcomm's CTO Matt Grob talks to Light Reading's CEO and Founder Steve Saunders about the progress being made in the development of the technologies and standards that will underpin 5G.
Animals with Phones
Neither Do We Click Here
Is that a prerequisite?
Live Digital Audio

Playing it safe can only get you so far. Sometimes the biggest bets have the biggest payouts, and that is true in your career as well. For this radio show, Caroline Chan, general manager of the 5G Infrastructure Division of the Network Platform Group at Intel, will share her own personal story of how she successfully took big bets to build a successful career, as well as offer advice on how you can do the same. We’ll cover everything from how to overcome fear and manage risk, how to be prepared for where technology is going in the future and how to structure your career in a way to ensure you keep progressing. Chan, a seasoned telecom veteran and effective risk taker herself, will also leave plenty of time to answer all your questions live on the air.