February 1, 2013
The Gig. U coalition of universities that is helping college towns across the U.S. get wired with super-fast broadband took a major step forward in its effort to bring gigabit speed broadband networks to more communities.
Through the RFP Gig. U and the N.C. Next Generation Network are hoping to entice both existing and new broadband providers to bid on building and running a network that will offer broadband download speeds of at least 1 Gbps. The deadline for the proposals is April 2. And if all goes well, the plan is to start offering service within 18 months.
Gig. U, which was started two years ago to bring together local communities, universities and broadband providers to build ultra-fast broadband networks, has already helped raise more than $200 million in private investment for these new networks. So far, Gig. U has helped jump-start two major projects with the help of an initiative called Gigabit Squared. In Seattle and Chicago, Gigabit Squared is spearheading projects with the University of Washington and University of Chicago, respectively, to bring super high-speed broadband to parts of these cities.
The effort in North Carolina will be the largest network project facilitated through Gig. U to date. It will cover at least four cities in the Triangle Park area of North Carolina including Raleigh, Durham, Chapel Hill, Carrboro, and Winston Salem.
What's not to love about gigabit broadband?
There is no question that communities throughout the country want cutting-edge broadband service to give their cities and towns an edge both domestically as well as internationally. Policy makers in state houses as well as in Washington, D.C., agree that building next-generation broadband networks will help boost economic development. The Obama administration has talked up the importance of improving broadband infrastructure as has former President Bill Clinton in his recent public appearances to tech audiences.. And recently, the Federal Communications Commission's Chairman Julius Genachowski stated a goal of getting gigabit-speed broadband services in all 50 states by 2015.
"As a number of high-profile thought leaders have recently noted, the United States needs to step up our efforts in the global bandwidth race," Gig.U's executive director Blair Levin said in a statement."FCC Chairman Genachowski has challenged communities across the country to take steps to catalyze an upgrade to world-leading networks, a challenge we welcome. As we've seen with Gig.U and elsewhere, communities are willing partners in these endeavors, working to create favorable environments for potential investments."
Google has gotten a lot of press for its efforts to bring gigabit broadband to Kansas City. And the company is looking for other potential cities to build similar networks.
But so far only 42 communities across 14 states have ultra-high-speed broadband, according to a report cited by the FCC. Google's much publicized Kansas City project is one. Other efforts have been led by local municipalities that have pushed for gigabit broadband services. Cities such as Lafayette, La., and Chattanooga, Tenn., have been at the forefront of the municipal fiber movement.
The FCC says that the fiber network deployed to 170,000 homes in Chattanooga helped lure big companies like Volkswagen and Amazon to the community, which has created more than 3,700 new jobs over the past three years in Chattanooga.
Gigabit broadband doesn't come cheap.
So why aren't more of these networks popping up? The answer is cost. Building new infrastructure is expensive. Governments don't have the cash. And in many states where local municipalities have expressed interest in funding their own networks, politicians backed by incumbent broadband providers have passed laws prohibiting such government-backed investments. Competition between cable operators and telecom providers in broadband has helped improve networks in some areas of the country. But this competition is only strong in small pockets of the U.S. There are still many communities in the U.S. where demand for more advanced services is high, but little competition exists to force incumbent providers to invest in network upgrades.
Gig.U's Levin, who served as former FCC chairman Reed Hundt's chief staff in the 1990s and led the current FCC's effort to develop the National Broadband Plan in 2010, says this has to change.
"The economics for building a new fiber infrastructure are hard," he said. "But we're trying to help communities figure out ways to change the math."
Unlike other major capital-intensive projects that cities often invest in, such as new football stadiums, Levin said that local governments do not have to shell out their own money to build these networks. They also don't need to offer huge tax incentives. What they can do to make it more attractive for broadband service providers is help make building such networks less expensive.
For example, cities can reduce the cost of building new infrastructure by easing regulatory requirements and streamline inspections for construction. This can reduce construction time and save companies money. Cities can also help facilitate rights of way in areas where fiber and other infrastructure needs to be built. Communities can also allow service providers to gauge demand and build infrastructure in areas only where they know they will have customers.
Levin said that Google has employed many of these tactics in its Google Fiber project in Kansas City. For instance, Google is only building fiber in neighborhoods in Kansas City where a certain threshold of demand has been met. Residents who want the service must go on a Web site to sign up for service in advance. And Google only builds the network in neighborhoods where this threshold has been met.
This is very different from the traditional process of expanding and upgrading networks. For example, when Verizon Communications was building its Fios service it spent considerable money and time negotiating contracts with cities that required it to build its network to a certain percentage of the population without knowing ahead of time whether there would be demand for the service.
"If you don't have to build your network unless you know you will have a take-rate of 25 percent, you've greatly reduced your risk," Levin said. "Knowing ahead of time that you will have customers for a service that you are spending a lot of money to build is incredibly beneficial."
Levin believes that when communities can look for ways to reduce the cost of building infrastructure it makes it much more attractive to investors. But he concedes that it is still very early days for Gig. U and for the projects it is helping to bring to life.
"It's an experiment," he said. "What have we got to lose? The cost of bringing these universities and communities together to organize a plan for encouraging broadband deployments is very small. But the upside in terms of the innovation and economic development for these communities is huge."
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