Thursday, January 29, 2015

UTOPIA cities get a little closer to fiber for every resident

I've been following FreeUTOPIA on Google Plus, Facebook and Twitter. When it comes to news about fiber infrastructure for internet access in the UTOPIA cities like West Valley City, FreeUTOPIA is one of my favorite spots to go. The other one is Community Broadband Networks.

So I am glad to see that Milestone 2 is out, an examination and exploration of how a public-private partnership would work with Macquarie Capital to build a fiber network for internet access to every business and home in the UTOPIA cities. For me, that's West Valley City. There are a few things that stand out about this deal for me:
  • The final cost per address is estimated at $22.60 per month. Macquarie estimates that re-working the deal to account for five cities bowing out trimmed the cost by $8.57 per month.
  • The revenue split is much more generous than previously expected, allowing the cities to keep 75% of wholesale revenue after the first $2M per year. It’s expected to completely cover the debt service by 2021 with just a 24% take rate for premium services.
  • The basic level service has also been improved. Instead of 3M/3M service being included at no extra cost, it’s been bumped to 5M/5M. This matches Google Fiber speeds on the free tier. The data cap stays put at 20GB per month.
I am glad to see that they've worked out the problem of costs associated with the cities that decided not to go forward with this deal. The cities that opt out will have to deal with their own debts. But the cities that opt-in could see their debts paid off in 7 short years from start to finish. And that is with a very low take rate for anything above the basic service of 5mbs up and down. I will be signing up for that gigabit service when it comes. Why? We won't know what we can do with it until we have it. But I do know for sure it will be better than anything I can get from Centurylink or Comcast.

I have wanted this for a long time for obvious reasons. I want to oust recalcitrant, reluctant incumbents who want to cherry pick customers for their own benefit while ignoring the rest. Case in point. Centurylink, my current internet service provider, is advertising gigabit service, but only offers it in a small two-block area of St. Paul, Minnesota.

In my neighborhood, Centurylink is the only wired offering as they seem to be coordinating with Comcast to make sure there is very little actual competition between them. Besides, it looks like Centurylink wants out of the landline business, so they may not be around much longer to offer internet service. Seems they're transforming into an IT services company. They're probably feeling the pinch from cell phone carriers as people cuttng the cord for phone service and I'm one of them. There is no wired phone service here and I have no plans to start one. There is simply no need for it.

If Centurylink goes away, then all the more we will need UTOPIA to provide internet access when their chief competitor, Comcast, will not. This transition will take years for Centurylink to accomplish, but they are not alone in abandoning wired phone service. Verizon and ATT are both planning an exit from wired phone service in favor of internet and cellular services. They could probably do that with more grace, but who needs grace when you're a monopoly-sized corporation?

There will be a public vote on the Maquarie deal when all the planning and investigating is done. I expect that there will be intense advertising and lobbying campaigns and probably even a new set of lawsuits to quell this uprising. Comcast and Centurylink have both been ardent opponents of UTOPIA and both have filed lawsuits in the past and it wouldn't surprise me if they both proposed an ALEC approved piece of legislation designed just for this kind of situation.

But the more that incumbent carriers fight the community broadband movement, the more companies like Comcast and Centurylink shine a light on their motives. They have both clearly shown how the profit motive can overcome the public good and betray the public trust in them. UTOPIA, a community broadband network, will help to pay off the debts incurred by the cities who want to move forward, provide up to gigabit internet access speeds for anyone who wants it, and a base connection of 5mbs up and down for everyone who is connected, for about $22 a month.

Just as in other cities like Chattanooga and Cedar Falls, Iowa, we may finally enjoy the prosperity a fiber network brings to everyone that is connected, in just a few years time.
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