User-financed FTTP fails in a competitive market

Palo Alto user financed FTTP study

A user-financed, municipal fiber-to-the-premises broadband system would be a financial nightmare if launched into a market with mainstream competition, even if it’s subsidized and supported by a profitable city-owned utility.

That’s the finding of a study presented to the City of Palo Alto’s Utility Advisory Commission last night by Tellus Venture Associates. The report assessed the financial potential of user-financed municipal FTTP options, including upfront payments ranging from $1,000 to $5,000, substantial capital contributions by the City and ongoing subsidies of up to $2,000,000 per year.… More

San Leandro joins elite group of dark fiber cities


Source: Lit San Leandro

Lit San Leandro is putting fiber in the ground. A launch party attracted about a hundred out-of-town development prospects and local business people who heard about the project’s big picture benefits and the specific real estate opportunities it creates. The Hayward Daily Review and San Leandro Patch have good articles on the event. Patrick Kennedy’s Lit San Leandro blog also has good updates and pictures.
Speakers at the event included Sean Tario, the CEO of Open Spectrum Inc.
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Update on California regional broadband grants

9 October 2011 by Steve Blum
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It’s looking like late October or early November for a preliminary decision by the California Public Utilities Commission on the first round of regional broadband consortia grant applications. On that timetable, formal approval by the Commission could come in early or mid-December.

Applications for the initial funding round closed on 22 August 2011, with 15 consortia submitting proposals. Most were for non-overlapping geographic regions. Given that the regional consortia funding kitty can theoretically pay for them all, it’s a good bet that most, perhaps all, will move ahead in the process.… More

Mesh WiFi coverage depends on what you mean by coverage

7 July 2011 by Steve Blum
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WiFi is great as the last link between the network and the user. It’s high enough bandwidth that it’s not a bottleneck, people know to look for it and the available hardware and clients are well advanced. Consumers will pay for casual access, but in that case they expect performance. They love free WiFi and will put up with a surprising amount of hassle to access it. Companies like Meraki have made it very cheap and easy to get a “drinking fountain”, amenity grade WiFi service up and running, on a paid or free basis.… More

Just released: fiber market research report for City of Palo Alto

1 June 2011 by Steve Blum
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Tellus Venture Associates has just completed a market study looking at the City of Palo Alto’s high speed fiber backbone service and can be downloaded here. The report will be presented tonight to the City’s Utilities Advisory Commission. The presentation will be also be available for download afterwards, and a more complete case study will be posted soon.

Policies, partnerships and common goals attract broadband investment to communities

Capital expense, operating expense and revenue are the basic parameters of a business plan. With broadband-specific incentives that improve those metrics – even marginally – local governments and economic development agencies can attract private broadband investment into underserved areas.

Public policies can be tailored to significantly reduce construction costs. Uniform, broadband-friendly right of way and permit procedures eliminate a huge source of uncertainty for business planners. The more certain they are of their estimates, the more likely they are to invest.… More

Getting back to business with broadband investment

The federal stimulus program overshadowed private sector funding for new broadband infrastructure for more than a year. The National Telecommunications and Information Administration and, to a somewhat lesser extent, the Rural Utilities Service (RUS) threatened to wash out broadband venture opportunities with billions of dollars of grants and loans. Some projects will absorb federal money instead of private risk capital. Most won’t and the surviving opportunities will become evident over the next few months.

demand study
Price points, service benchmarks and likelihood
to buy are key data for revenue projections
Local agencies and economic development organizations still have the job of attracting that investment.… More

Redefining municipal wireless

Municipal wireless was declared dead at the Wireless Communications Association’s recent symposium in San Jose, but the picture that emerged from three days of discussion, debate and presentations at the European Wireless and Digital Cities Congress in Barcelona this week was more comprehensive and nuanced. And optimistic.

The difference lies how you define municipal wireless. Older, more familiar models are certainly dead. No one expects a private company to invest in building a city-wide WiFi network to provide public Internet access, whether free or for a price.… More

The future of wireless internet service

Forget trying to build a wireless Internet business with any idea of serving people in their homes or businesses. In general, wireless technologies don’t work as well as the hard-wired options. Wireless Internet service will succeed where wireless technology holds an advantage.

Wireless broadband technology has three advantages over landlines:

  1. It is ubiquitous.
  2. It can be rapidly deployed for a far lower initial capital outlay.
  3. It excels at delivering the same bit stream to many people at the same time.
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A brief postmortem on the wireless Internet utility

Nearly all of the city-scale, mainly WiFi-based wireless ISPs of the past three years are dead. Some, like Philadelphia, lumber on as zombie ventures. A few small town systems will continue to operate as long as the social and political consensus supports the subsidy required. And there are a couple of big city projects that haven’t burned through their initial operating capital yet.

But the rest are dead. The disease that killed them was cash flow hemorrhage, brought on by virulent churn.… More