& cplSiteName &

Colorado Gigabit Network Shuns Video, Embraces OTT

Jason Meyers
6/27/2014
50%
50%

In a nod to the increasing dominance of over-the-top (OTT) services, the first municipal gigabit fiber-to-the-home (FTTH) network under way in Colorado will not include its own brand of video services.

"We're only going to do a double play," says Tom Roiniotis, general manager of Longmont Power & Communications (LPC), the municipally owned utility that is deploying the network. "We see cable as a declining business -- customers can get all the content they want over the top. That's where a lot of the world is heading."

LPC's tack could become the norm for utilities and municipalities eyeing the gigabit opportunity, thanks to both OTT providers and the cost and complexity of providing video.

"Cable TV is a monster to run, but for years cities would moan and complain about the expense, but still do it," says Craig Settles, an independent industry analyst and host of the online radio program Gigabit Nation. "Cities are starting to question the rationale behind that and decide they're going to make the broadband business successful without it -- that video is going to be someone else's headache."

Savvy networkers
LPC announced this week that it will deploy access infrastructure from Calix Networks Inc. (NYSE: CALX), Cisco Systems Inc. (Nasdaq: CSCO)'s routing gear, and transport equipment from Cyan Inc. David Russell, solutions marketing director for Calix, notes that in addition to the lack of video services, LPC is unique for the scale of its deployment and for the technical prowess of its staff, many of whom came from the CLEC industry.

"The past six or seven years in the municipal space have been characterized by more deployments of much smaller sizes -- it's been seven years since one of this size has been built," Russell says. "And there are a lot of good networking skills in that part of the country. We go to many areas that don't have technical talent in abundance."

Indeed, LPC has more experience than many municipal utilities when it comes to building and operating networks. The utility deployed a citywide fiber ring in the late 1990s to both provide connectivity to city buildings and tie its substations together: In an industry in which many utilities are slowly crawling toward modernizing their internal communications networks, LPC has been there for more than a decade.

"We had a smart grid before that term was used," Roiniotis says. "That ring will form the backbone for the citywide FTTH network."

The city retained a systems integrator to start building a hybrid fiber coax network in Longmont in the early 2000s, Roiniotis says, but the company went bankrupt and the project stalled. In 2005, Colorado Senate Bill 152 blocked municipalities' ability to offer broadband services, but provided exceptions to allow it by local election. Longmont citizens voted to re-establish the right for the municipality to provide services in 2011, and in a 2013 election two bond issues passed that granted the utility $40.3 million for the buildout.

The network ultimately will pass 39,000 homes and businesses (the population of Longmont is about 90,000) after six phases of construction, which are slated to begin this August and conclude in the first quarter 2017.

"We hope to have every home and business served with a gigabit passive optical network within three years," Roiniotis says.

The Longmont Timeline

Good for the economy?
LPC will unveil its marketing strategy and branding campaign within a few months, Roiniotis says, and plans to offer Longmont residents 25Mbit/s symmetrical connections for $39.95 per month and 1Gbit/s symmetrical connections for $99.95 per month. While the network is under construction, however, the utility will offer charter member rates of $49.95 per month for the 1Gbit/s service -- a plan that will be transferable should homeowners sell.

"We're asking people to invest in future-proofing their homes," he says.

LPC's motives in building out the network aren't the same as incumbent service providers, Roiniotis insists.

"We're doing it for a different reason than Comcast and CenturyLink would do it," he says. "Cities like Longmont think having a gigabit network is good for our local economy and will help make businesses more competitive. We can use it to market the city and help attract economic investment. We're not going to judge the success of broadband based solely on the balance sheet."

Even if LPC's efforts to stimulate the economy work, however, it could be several years before results are tangible.

"Everyone feels like this is the magic bullet for economic development," says Teresa Mastrangelo, principal analyst for Broadbandtrends LLC . "If you look at successful cities like Chattanooga, it's taken four or five years to see the investment pay off in terms of economic development. It is a catalyst that starts to stir up some alternate ways of how to do business, but I don't know that it alone drives economic development."

— Jason Meyers, Utility Communications Editor, Light Reading

(14)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
Page 1 / 2   >   >>
jabailo
50%
50%
jabailo,
User Rank: Light Sabre
6/29/2014 | 5:27:21 PM
PUDs
Here in Washington State I've been looking at rural properties.  One of my requirements is Internet connectivity (and satellite unfortunately has too low bandwidth caps).

I've been surprised by the number of remote residences that are served by cable and optical fiber.   What I would do is look up the properties on the National Broadband Map (http://www.broadbandmap.gov/).   I started to see crazy high speeds in some of the most far flung places...1Gbps, Google Speed...and the ISP was listed as something like "PUD District #3".

So, it turns out that due to an act of Congress for rural broadband, the local electrical utilities stepped in where no cable or telco would go and hooked up farmhouses and ranches to the optical fibers on their power lines.   And since there was no economic reason to "throttle" they let them get the full optical fiber speeds!!

I think this is hilarious, because there are still areas of hi-tech Seattle that can't get broadband or anything above a couple of Mpbs!!

 
Carol Wilson
50%
50%
Carol Wilson,
User Rank: Blogger
6/27/2014 | 10:44:32 PM
Re: The smart play
Actually, the nails in this coffin started going in about three or four years ago when rural telcos started shutting down their IPTV or cable services in favor of making it easier for their customers to buy higher tier broadband offerings and some kind of OTT video. This included bundling Roku boxes or other OTT devices and, in at least one case, offering to help customers install digital antennas to pull in off-the-air digital TV signals. 

Video has been a loss leader for many IPTV providers for almost 10 years now and some of them -- a growing number - are deciding it's just not worth the headache. 

The capex investment can be high and the cost of content just keeps going up and up. And that's a cost you pay per user on a monthly basis. The big guys may be able to negotiate somewhat but as we've seen recently in the high-profile battles between cable and satellite providers and various content giants, even Time-Warner Cable and DirecTV take a hit when they take on big content. 
smkinoshita
50%
50%
smkinoshita,
User Rank: Light Sabre
6/27/2014 | 9:58:18 PM
Re: The smart play
@Carol Wilson:  I agree, but my thoughts went to the question of if "Is this is going to be a new trend?"  I'm sure I'm not the first person to question the future of video service and I'm just wondering if this is the first nail in the coffin.
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
6/27/2014 | 5:23:23 PM
Re: Smart move
Ryan Welch - True, but there are other ways to get the word out: Text messages,robodialers, even cars going down the street with loudspeakers. 
Ryan Welch
50%
50%
Ryan Welch,
User Rank: Lightning
6/27/2014 | 4:28:28 PM
Re: Smart move
Mitch, I only mostly agree with you on that second point. Yes, cable TV has become an entertainment service more than anything, however, there is still the matter of local public saftey broadcasting. Admittedly, that's not a very big slice of the pie, but as I see it, that obnoxious BEEP BEEP BEEP and pop-up alert ticker is still a sure-fire way to disseminate information about local emergencies (ie severe weather, amber alerts, evacuation orders, etc). Argueably, all of that information is also available online, but only if you're looking for it; whereas with TV, the information is put right in front of you.

Still, I do see that cable TV is slowly being edged out by OTT video. The network operator could strike an agreement between the local authorities and the OTT services to integrate those same public alerts into their content at the local level.
Mitch Wagner
50%
50%
Mitch Wagner,
User Rank: Lightning
6/27/2014 | 2:10:11 PM
Smart move
This is a smart move. Broadband is necessary to attract business, even if the service itself is unprofitable or even loses money. 

Cable TV is entertainment, not something government should be spending taxpayer resources on. Let the people get TRUE BLOOD on their own nickle. 
RBR
50%
50%
RBR,
User Rank: Light Beer
6/27/2014 | 1:39:56 PM
Data first is where all local access roads lead
Excellent article(s) Jason, you've brought good insight on several fronts.  I've held the single play data first option is best for small operators and where non-national footprint operators will eventually arrive.  Not enough margin in Video or Voice to warrant organic investment; best to partner with 3rd parties.  Current client is getting $70 ARPU and +40% penetration with a FTTH broadband only play and now approaching neighboring RLECs (and AT&T) for them to provide IPTV and POTS across our network.  Not the ARPU we had as triple play providers, but lower OPEX and Churn yielding stronger ROI.  Truism, first one in with fiber is the lasting.
jasonmeyers
50%
50%
jasonmeyers,
User Rank: Blogger
6/27/2014 | 1:13:24 PM
Re: Economic Development via Gigabit Networks
I agree on all counts - and in Longmont, municipal buildings and some schools are already connected via the existing fiber network, so many residents are already used to it.

When I told Tom from LPC that I wish I could get a gigabit connection for $50/month, his response was "That's what we like to hear -- move to Longmont."
TimDowns
50%
50%
TimDowns,
User Rank: Light Beer
6/27/2014 | 12:30:16 PM
Economic Development via Gigabit Networks
Jason

Interesting article about Longmont, which as you point out is unique with its business model. Why would they take on the headache of an in-house video service when there are plenty of signs of OTT video surging in the hearts of consumers? There's Aero, but also Hulu, Roku and more. 

Secondly, a gigabit network to homes and businesses is required nfrastructure for visual communications, not video. Think high definition telemedicine, business collaboration, distance learning -- if you live in Longmont five years from now, you'll want these types of services more than you'll want to ESPN 2.

Finally, on the subject of economic development. I would think that the key driver for a city such as Longmont may not be new economic development, though that is always good. The question is, if the city doesn't make this investment, and the carriers don't make this investment, citizens will have a choice to live somewhere else. Like Chattanooga.

 

TD
mendyk
50%
50%
mendyk,
User Rank: Light Sabre
6/27/2014 | 10:51:18 AM
the anti-Aereo
Wow -- Longmont is blazing a trail that will become well worn over the next decade. It's all about OTT service delivery, not making sure customers are being forced to pay for 15 ESPN talking-head channels.
Page 1 / 2   >   >>
From The Founder
The independent evaluation of Nokia's key virtual network functions (VNFs) was a defining moment for the Finnish giant.
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
Cisco's Innovations in Cable

5|26|16   |   03:18   |   (0) comments


Marc Aldrich from Cisco discusses the latest in security, the evolution and momentum for CCAP and what the industry will be seeing next from Cisco.
LRTV Documentaries
Leading Lights 2016 Highlights

5|25|16   |   02:26   |   (1) comment


Some of the high points from this year's Leading Lights awards dinner at the Hotel Ella in Austin, Texas.
LRTV Documentaries
Light Reading Hall of Fame 2016

5|23|16   |   05:43   |   (0) comments


Find out who has been welcomed into Light Reading's Hall of Fame this year.
LRTV Custom TV
ZTE TM Forum Highlights

5|23|16   |     |   (0) comments


ZTE showcased its new ICT solutions at TM Forum in Nice.
LRTV Interviews
Gamma's MD on the Emergence of UC2

5|20|16   |     |   (0) comments


Gamma Communications Managing Director David Macfarlane believes the unified communications (UC) market has reached a tipping point.
LRTV Custom TV
The Ultimate 5-Minute Guide to Digital Customer Engagement

5|20|16   |     |   (0) comments


In this short video, you will hear all about how Digital Customer Engagement is the key to meeting customer expectations, keeping them happy, and maximizing revenue. VP Product & Marketing at Pontis, Ofer Razon, breaks down for us the five essential capabilities for successful Digital Customer Engagement. Don’t miss!
LRTV Custom TV
NFV in 2016: Part 1 – NFV Use Cases Get Real

5|19|16   |   05:57   |   (0) comments


Consensus is building around the key use cases for NFV, including managed IP services at the network edge and on customer premises, which can generate new revenues from enterprises/SMBs and consumers; Evolved Packet Core to support LTE migration; and adjacent technologies, such as TAS and IMS, to support VoLTE and next-generation charging and policy control ...
LRTV Custom TV
Nokia's Steve Vogelsang on NFV – Part 3

5|19|16   |     |   (0) comments


Steve Vogelsang discusses the challenges of operational transformation and how Nokia helps its customers. Join Steve at the Big Communications Event in Austin the morning of May 24, on his keynote and optical networking panel.
LRTV Interviews
Level 3: Why UC Is In Demand

5|17|16   |   04:12   |   (1) comment


Andrew Edison, Level 3's senior VP of sales, EMEA region, talks about the drivers of growth in the unified communications services market.
LRTV Custom TV
ARM's OPNFV Action

5|17|16   |     |   (0) comments


At the ARM booth at MWC 2016, Joe Kidder and Bob Monkman speak to Light Reading about OPNFV and their upcoming action.
LRTV Custom TV
Nokia's Steve Vogelsang on NFV – Part 2

5|16|16   |     |   (0) comments


Steve Vogelsang gives advice to service providers on how to move to NFV. Join Steve at the Big Communications Event in Austin the morning of May 24, on his keynote and optical networking panel.
LRTV Interviews
Interoute CTO on NFV's Maturity

5|13|16   |   06:46   |   (1) comment


Matt Finnie, CTO at international operator Interoute, explains how NFV has made life easier in terms of logistics and how Interoute can now enable a 'software-defined moment' for its customers.
Upcoming Live Events
September 13-14, 2016, The Curtis Hotel, Denver, CO
December 6-8, 2016,
June 16-18, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
A new survey conducted by Heavy Reading and TM Forum shows that CSPs around the world see the move to digital operations as a necessary part of their overall virtualization strategies.
Hot Topics
DT: Telcos Must Escape Vendor Prison
Iain Morris, News Editor, 5/24/2016
AT&T to Start 5G 'Friendly' Trial by 2016 End
Dan Jones, Mobile Editor, 5/24/2016
Cable Is Eyeing Its Retail Options
Mari Silbey, Senior Editor, Cable/Video, 5/25/2016
AT&T's Margaret Chiosi Retires
Ray Le Maistre, Editor-in-chief, 5/25/2016
Verizon Backpedals on Go90
Mari Silbey, Senior Editor, Cable/Video, 5/24/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
In this latest installment of the CEO Chat series, Craig Labovitz, co-founder and CEO of Deepfield, sits down with Light Reading's Steve Saunders in Light Reading's New York City office to discuss how Deepfield fits in with the big data trend and more.
Grant van Rooyen, president and CEO of Cologix, sits down with Steve Saunders, founder and CEO of Light Reading, in the vendor's New Jersey facility to offer an inside look at the company's success story and discuss the importance of security in the telecom industry.
Animals with Phones
Live Digital Audio

Our world has evolved through innovation from the Industrial Revolution of the 1740s to the information age, and it is now entering the Fourth Industrial Revolution, driven by technology. Technology is driving a paradigm shift in the way digital solutions deliver a connected world, changing the way we live, communicate and provide solutions. It can have a powerful impact on how we tackle some of the world’s most pressing problems. In this radio show, Caroline Dowling, President of Communications Infrastructure & Enterprise Computing at Flex, will join Women in Comms Director Sarah Thomas to discuss the impact technology has on society and how it can be a game-changer across the globe; improving lives and creating a smarter world. Dowling, a Cork, Ireland, native and graduate of Harvard Business School's Advanced Management Program, will also discuss her experience managing an international team focused on innovation in an age of high-speed change.