& cplSiteName &

Muni Networks: The Public's Not Buying

Light Reading
News Analysis
Light Reading
9/21/2005
50%
50%

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
digits
50%
50%
digits,
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'...
alchemy
50%
50%
alchemy,
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.
materialgirl
50%
50%
materialgirl,
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.
jepovic
50%
50%
jepovic,
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.
ehouse
50%
50%
ehouse,
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
transport.
Featured Video
From The Founder
Light Reading is spending much of this year digging into the details of how automation technology will impact the comms market, but let's take a moment to also look at how automation is set to overturn the current world order by the middle of the century.
Flash Poll
Upcoming Live Events
November 30, 2017, The Westin Times Square
December 5-7, 2017, The Intercontinental Prague
March 20-22, 2018, Denver Marriott Tech Center
May 14-17, 2018, Austin Convention Center
All Upcoming Live Events
Infographics
SmartNICs aren't just about achieving scale. They also have a major impact in reducing CAPEX and OPEX requirements.
Hot Topics
Juniper's New Contrail VP Hails From Google
Craig Matsumoto, Editor-in-Chief, Light Reading, 11/15/2017
Eurobites: Telefónica Reckons Plastic Is Fantastic for FTTH
Paul Rainford, Assistant Editor, Europe, 11/15/2017
AT&T's Lurie Leaps to Synchronoss as New CEO
Dan Jones, Mobile Editor, 11/17/2017
Animals with Phones
Live Digital Audio

Understanding the full experience of women in technology requires starting at the collegiate level (or sooner) and studying the technologies women are involved with, company cultures they're part of and personal experiences of individuals.

During this WiC radio show, we will talk with Nicole Engelbert, the director of Research & Analysis for Ovum Technology and a 23-year telecom industry veteran, about her experiences and perspectives on women in tech. Engelbert covers infrastructure, applications and industries for Ovum, but she is also involved in the research firm's higher education team and has helped colleges and universities globally leverage technology as a strategy for improving recruitment, retention and graduation performance.

She will share her unique insight into the collegiate level, where women pursuing engineering and STEM-related degrees is dwindling. Engelbert will also reveal new, original Ovum research on the topics of artificial intelligence, the Internet of Things, security and augmented reality, as well as discuss what each of those technologies might mean for women in our field. As always, we'll also leave plenty of time to answer all your questions live on the air and chat board.

Like Us on Facebook
Twitter Feed
Partner Perspectives - content from our sponsors
The Mobile Broadband Road Ahead
By Kevin Taylor, for Huawei
All Partner Perspectives