In Philly, Comcast Trumps Muni Broadband
Many cities are exploring hybrid network infrastructure options that include some combination of owning and operating their own municipal networks and working with service providers to distribute the cost and risk. Philadelphia is taking a different route.
As the home to broadband giant Comcast Corp. (Nasdaq: CMCSA, CMCSK), Philadelphia is now partnering with the cable company to develop an Institutional Network (iNet) bundled with commercial broadband services. The agreement puts the onus of investment on Comcast, while also committing the city to a 15-year deal of buying connectivity services from its hometown provider. (See Philadelphia & Comcast Business Strike Institutional Network Pact.)
On the investment side, a Comcast spokesperson says the company will "connect more than 225 facilities, including police and fire stations, health and human services offices, recreation centers and more to the network, which will enjoy increased capacity." Importantly, the city won't be on the hook for the initial construction costs, and Comcast says it will be able to "double the aggregate bandwidth on the network connecting City facilities with no increase in cost."
On the commercial side of the deal, Philadelphia will buy network services from Comcast Business during a time period that coincides with the company's recently renewed cable franchise agreement with the city. As a way to sweeten the pot, Comcast has also promised to provide free Internet accounts to all local recreation centers that don't currently have connectivity. The city will be able to offer WiFi to citizens at these sites and at Philadelphia's famous Love Park as a result.
Comcast has also said it will offer "special consideration for bandwidth" during special events in Philadelphia, such as visits by dignitaries or the NFL draft.
The new deal with Comcast is a contrast to Philadelphia's attempt at a municipal WiFi deployment back in 2007. At the time, a non-profit known as Wireless Philadelphia was formed to build the WiFi network, but the city ultimately turned over ownership and operation to EarthLink. As analysts have argued, that put the city in the uncomfortable position of having to promote the new WiFi services, while also trying to hold EarthLink accountable for its performance. The EarthLink effort failed, and Philadelphia then had to buy back the network for $2 million.
Fast forward several years, and WiFi is more or less a bonus feature in Philadelphia's new agreement with Comcast.
Not every city can count on a patron provider like Comcast the way that Philadelphia can. The cable company, which is headquartered in the center of the city, is heavily invested in Philadelphia both financially and emotionally. However, there are tradeoffs in relying on Comcast for network infrastructure. As other cities are learning, when the local government owns at least a part of its network infrastructure, it also wins the opportunity to generate revenue by leasing out capacity on an ongoing basis.
As for the network itself, Comcast says it is in the process of designing the Philadelphia build, and that the network will be dedicated to Philadelphia's institutions only, and not used for additional commercial services. The increased network capacity throughout the city will be particularly helpful for high-bandwidth applications including video, which is being used with more frequency by the Police Department among others, and transfers of large files including X-rays by the Health Department.
— Mari Silbey, Senior Editor, Cable/Video, Light Reading