5 Comments

Summary:

Community-owned broadband gets a significant boost with the Google fiber announcement, even though Kansas City doesn’t own the network. The trick is understanding which Google tactics can be replicated by community projects and how to use gigabit envy to get municipal networks built.

google_fiber_truck

Google’s launch of its fiber to the home project last month has the potential to disrupt and drive better municipal broadband networks. First and foremost, $70 per month gigabit Internet access and $120 per month gigabit access plus IPTV knocks a pillar from under AT&T, Time Warner Cable and other giant incumbents, while giving community broadband advocates renewed energy for the fight.

Incumbents can’t continue deflecting demands to deliver better broadband with weak excuses (though they don’t give up trying). Now communities newly motivated by all the publicity can say, “we want a gig like Kansas City. If you won’t do it, we’ll get it done ourselves.”

Some communities may partner with local providers such as Sonic.net in California and CityLink Telecommunications in New Mexico that have built networks and offer sub-$100 per month gig service. Others may find alternative sources of funding and build their own networks. Bottom line: Google provides inspiration and validation while communities move to replicate the magic.

Google’s free service is better than current low-income offerings

The second big bang is how Google tackles the digital divide with a free service. Communities likely will lean towards efforts similar to Google over those such as Comcast’s $10/month Internet Essentials service,  Google offers a 5/1 Mbps service package that beats Essentials’ 3 Mbps download and 756K upload speeds, and without the myriad of painful eligibility requirements that seem more exclusionary than inclusive. Low-income households just pay the $300 installation fee (there’s a $25/month payment plan option) and can get this package free for seven years.

The speeds offered are more than just a lifeline, but are actually viable for supporting home-based businesses, enabling better access to adult and youth education resources, and giving people a better chance at keeping pace with digital developments. In a year or so communities should see models for inclusion programs coming from Kansas City that they can replicate.

Do not underestimate the power of gigabit envy to drive community projects. Chattanooga, Tenn. is a marketing powerhouse, frequently in the news with stories of innovations and too-cool-for-school application development. Expect Kansas City to create a similar national buzz as the hip gig city. The pressure on local officials to get a gig, from the big cities down to the Mayberry RFDs, will be difficult to ignore.

Smart homes and gigabit speeds generate gigabit envy

Building TV boxes with Wi-Fi capabilities should accelerate the “smart home” concept, and bring gigabit envy to doorsteps across America. Fiber to Kansas City homes facilitates all types of powerful apps to monitor and manage energy usage, appliances, medical device, etc. Wi-Fi gives these apps legs by making the technology personal and pervasive. Desire to keep up with the digital Jones’ can contribute to network financial sustainability as people sign onto the network.

Putting tablet PCs into subscribers hands disguised as the TV remote gives broadband stakeholders a powerful branding tool. In many households the remote is the center of the universe. If local Kansas City retail stores, eating establishments, credit unions, doctors’ offices, etc. strengthen their brand with residents using Web content, social networking and specialized apps delivered via these tablets, then this become an economic development template for other communities.

Research from cloud content management company Alfresco shows tablets increasingly are becoming the computing platform of choice for people who want to do work tasks at home. Whether or not Google intentionally tapped into this trend, tablet-as-remote should make these must-carry devices for many, something communities can leverage to turn subscribers into walking, talking billboards for the network.

Getting people involved in selling strengthens local bonds

Google could easily establish in Kansas City the blueprint for broadband adoption that other communities emulate. They have set up demo sites in Kansas City so people can experience gigabit connectivity, and is doing six weeks of community rallies, creating Web order pages to preregister subscribers and turning residents into active marketers for the network.

This I-am-my-neighbor’s-keeper “fiberhood” program Google launched to identify people with a need for speed is producing early results and appears to be a formula for success. National Broadband Plan architect Blair Levin believes “Google is doing a very good job in this regard.” Whether they create co-ops, structure public private partnerships or have local governments run the network, communities must effectively target demand (a.k.a. demand aggregation).

It is financially prudent to pursue people with a need they are willing to pay someone to meet rather than build a network and hope you generate enough sales. Google established set percentages of residents in various neighborhoods who must pony up a $10 pre-registration fee before starting to build in those neighborhoods. “Not only will they better aggregate demand,” continues Levin, “they will reduce deployment costs by sending trucks to build out entire neighborhoods rather than sending a truck for each residential install.

The Co-Chairs of the Mayor’s Bi-State Innovations Team, Michael Burke and Ray Daniels, in an interview last week revealed a few behind the scenes details that provide additional lessons community broadband stakeholders can incorporate into their plans. A key takeaway is that communities should use Google’s efforts as a catalyst for planing. “Before Google had laid one foot of fiber,” Burke stated, “we started important planning and discussions that communities everywhere need to do.” Without this, the two Kansas Cities wouldn’t be in a good position to capitalize on its relationship with Google.

Craig Settles is a consultant who helps organizations develop broadband strategies, host of radio talk show Gigabit Nation and a broadband industry analyst. Follow him on Twitter (@cjsettles) or via his blog.

  1. What Craig said.

    also, on:

    Now communities newly motivated by all the publicity can say, “we want a gig like Kansas City. If you won’t do it, we’ll get it done ourselves.”

    The problem with that is that municipalities are broke or over-extended. and can’t afford to finance initiatives like this. However, corporations have accumulated record hoards of cash, which are earning nothing as they sit under virtual mattresses. We need a mechanism that will direct some of that cash to financing municipal fiber networks – it will be a great investment, as the availability of cheap high speed internet access will spur economic activity in local areas.

    Maybe the mechanism could be a tax preference on profits from financing community fiber networks. I’m sure the telcos and cable companies would object, but if they don’t like it, they can deploy the fiber and the government won’t have to get involved.

    Share
    1. Kenica,

      you’re on to something here. If you take your idea and mix in the ideas in the document that’s linked to this sentence in the third paragraph, “Others may find alternative sources of funding and build their own networks,” you have the ingredients for generating a solid plan of attack.

      Because local governments are broke, the document I wrote advocates for business, individuals and institutions in the community 1) creating a nonprofit or a co-op that the community owns, and then pursuing money, donations, corporate investment, etc. When you read the report, you’ll see examples of various communities that have made this strategy work.

      Share
  2. Thank you Google!

    Share
  3. mikepellegrini Thursday, August 2, 2012

    What Google is doing is great! I hope their effort takes off in a big way.

    Community broadband can be a double edged sword though.

    Here in Tacoma, WA, we have Click! Network – providing broadband wholesale to residents since the late 90′s. On it’s face, this sounds great; in practice, Click managers are a bunch of idiots.

    While Comcast upgraded the Seattle area to DOCSIS 3 over 3 years ago, Click just finished their upgrades last month. So for three long years, Click customers paid (for example) $60 for what Comcast customers paid $30.

    That’s a shining example of Click’s marketing acumen. There have been many other, equally brilliant blunders over the years.

    So now, they finally get DOCSIS 3 and all they do is mirror Comcast’s prices – for example, $189/month for 100 mb/s – which is priced high enough to almost certainly guarantee no one will ever order it.

    And strangely, Click doesn’t even offer a low-cost tier to compete with dial-up; nor do they offer any discount for elderly or low income people.

    Basically, the people who run Click are a bunch of morons who have no clue what it is they’re marketing.

    They just don’t know their product, or the environment they exist in. They’d be very comfortable with old-line AOL management; they myopicly see internet service as static, unchanging. And look what that did for AOL!

    So having muni broadband isn’t an answer unto itself; to benefit residents, you must also have someone with a clue to run the effort.

    I still have dreams Click will someday get its shit together, but there haven’t been any signs of that, at least yet.

    Mike Pellegrini
    Tacoma, WA

    Share
  4. Rodney Crohns Saturday, August 4, 2012

    Can’t wait for the change this will bring to Kansas City. I look a quick walkthough of the Google Fiber Space, tested the equipment, and it’s great. http://bit.ly/google-fiber-space

    Share

Comments have been disabled for this post