Dutch, Swedes Rule Muni BB
As municipally owned broadband networks are considered by cities around the world, many are looking to the Dutch and the Scandinavians for success stories and best practices. (See Muni Networks: The Public's Not Buying.)
"You probably think of the Netherlands as wooden shoes and windmills, but we are also very proud of what we’ve done in broadband," said Peter van Eijk, director of the Netherlands' Almere Knowledge City Foundation, when speaking at the Broadband Cities 2005 conference in Utah last week.
The foundation is a public/private broadband partnership run by the municipality of Almere.
Van Eijk said 19 out of every 100 homes in the Netherlands, or 3.45 million households, now have broadband connections. That puts the country second only to Korea, where 25 homes per 100 are connected. Van Eijk said 600,000 Dutch businesses use broadband connections, too.
"We think we have the chance to be the leader in broadband in the next couple of years, so we are acting now," Van Eijk said.
Many of the Netherlands' community broadband projects were made possible by grant money from the Ministry of Economic Affairs.
And Sweden isn't far behind the Netherlands. "There are 289 municipalities in Sweden, and over 200 now have their own networks," said Lars Hedberg, secretary general of the Swedish Urban Network Association (SSNF). Hedberg says 29 of those networks have been linked together so far, and the rest will be interconnected within 5 years.
SSNF is a non-profit trade organization in which 300 companies and municipalities cooperate on municipal broadband deployments.
Founders of Utah's Utah Telecommunication Open Infrastructure Agency (UTOPIA) network credit Sweden with inventing the business model now being adopted by most planned and operating municipal networks. (See Utah's Broadband War.) It is a "wholesale" model where the municipality owns the network, but private sector companies provide the actual broadband services running over the network.
Several members of the Swedish and Dutch delegations say government ownership of broadband infrastructure is perceived very differently than in the U.S.
"There is some kind of cowboy mentality [in the U.S.] that you don’t need a government," said Jonas Bigersson, founder and CEO of the large Scandinavian broadband services company, Bredbandsbolaget AB (B2). (See Telenor on Billion-Dollar Spree.)
B2 was the second-largest Scandinavian broadband services provider with 335,000 subscribers before being sold to (Nasdaq: TELN) in May. (See Telenor Buys B2, CyberCity.)
Bigersson believes some kinds of infrastructure, like broadband networks, are better left to the ownership of government entities: "What I think the Americans will learn is that there is such a thing as natural monopolies -- government systems where they can pay for an airport and write it off and pay for it over 100 years. What private business can do that?"
Bigersson stressed that the emergence of new networks is the only way to spark competition and hold broadband prices down. "When B2 launched service in Sweden, the Swedish incumbent provider lowered its broadband price by 99 percent within 24 hours." (See B2 Picks Ericsson for VDSL2.)
Bigersson believes the dominance of cable MSO and telco broadband providers in the U.S. has stifled innovation. "America is now where a lot of [broadband services] companies want to be, but traditionally America has been: 'You can put innovation in, but nothing comes out.'
"Skype would have been an American company if it weren’t for the black hole of innovation here." [Ed. note: Well, it's an American company now.]
— Mark Sullivan, Reporter, Light Reading