Communities Determine What Broadband Success Is, Not Incumbents!

Over 500 public-owned networks operate in the United States, according to the Institute of Local Self-Reliance, including 89 fiber and 74 cable community-wide networks, and over 180 partial-reach fiber networks covering business districts, industrial parks and medical and university campuses. Evaluating these networks’ impact on job creation, education and stirring innovation, as well as their financial sustainability, uncovers hundreds of success stories that can be replicated.

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A sizeable number of networks have been operating successfully since at least 2003, and some have been operating since the late 1990s. Check out out in our directory (to the left). These communities defined success as meeting the goals that communities used to justify the investments in their networks.

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What happens, for example, if a town spends $1 million to build a network, and broadband is one of the main reason three companies moved to town and generate $500,000 in tax revenue? If the citizens are happy and feel tax revenues attributed to the network justify the expense, then that is a successful network. If a rural county’s citizens believe the quality-of-life benefits of highspeed Internet justifies the network costing $100,000 a year, they voted for that, and people are happier because of network-gereated services, then the network is a success.

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Stop letting the incumbents dictate the terms of a community’s success. I’m compiling a directory of community network to help broadband teams understand how others measure success. The directory is an or-going project, but some trends are starting to take shape.

  • About half of networks were initially built with the goal of facilitating government or utility operations.
  • Over half had a second goal of improving economic development, mainly by retaining current businesses or attracting new ones.
  • Most of those interviewed had one or both of these goals initially and added more goals along the way that further justified the investments in the networks. About two-thirds report reaching or exceeding one or all of their initial goals.
  • About half report their networks increased local government efficiency, boosted economic development, transformed healthcare delivery and improved education.
  • Initial investments range from as little as $160,000 to $750,000 and to as much as $12 to $15 million. Investment amounts vary depending on a range of factors, including the size of the community, number of public resources to wire and whether residential subscribers were connected. Larger cities such as Chattanooga and Lafayette made considerably higher investments in the initial years.
  • Some networks have never operated at a deficit because 1) the initial infrastructure for government or utility use paid for itself in cost reductions, and 2) they incurred costs for expanding the network for the public that were directly in proportion to subscriber revenue growth.

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There are cities such as Santa Monica and Burbank, California cover all costs for personnel, network operations and network expansion by adding just three to four business customers per month. They’re also able to build free public Wi-Fi capability throughout the city, thanks to the fiber infrastructure connecting government and utility facilities.

A number of cities carry their initial debt for build-out anywhere from 10 to 25 years, and most (except some networks built within the past two years) currently generate enough revenue to retire the debt on schedule, if it hasn’t been retired already. This, by the way, is what cities do—they carry debt for many years for infrastructure projects. Critics try to paint this as another negative that justifies anti-muni network laws—“we’re protecting” taxpayers from debt.

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  • Who’s Craig Settles?

    Industry analyst, expert broadband business strategist, runs on-site workshops to help clients create effective broadband plans.

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