I interviewed Joanne Hovis, founder of CTC, on where municipal wireless broadband is headed, what cities should be considering, changes in the way cities are sharing risk with providers and the role of fiber in muni projects. Joanne is the founder of an engineering and consulting company that produced an excellent Wi-Fi feasibility study for Tucson, Arizona and a fiber-to-the-premises study for San Francisco.I interviewed Joanne Hovis, founder of CTC, on where municipal wireless broadband is headed, what cities should be considering, changes in the way cities are sharing risk with providers and the role of fiber in muni projects. Joanne is the founder of an engineering and consulting company that produced an excellent Wi-Fi feasibility study for Tucson, Arizona and a fiber-to-the-premises study for San Francisco.
The only thing that is dead is EarthLink’s wireless business. Simply put, EarthLink misjudged the market, the technology, and its own staying power and is now withdrawing from its commitments–that is not an unusual story in the history of any industry and I’m sure we’ll hear it again in the history of community broadband. The significant point here is that it is EarthLink that failed, not Wi-Fi, and not local government.
Muni wireless remains a force because local communities around the country have recognized their local needs for more, better, affordable broadband. In the face of market failure or adjustment (which is what EarthLink’s departure represents), the role of government is more important, not less.
Hundreds of communities around the country identified and quantified their needs for broadband over the past few years, and many of them are following up with projects tailored to meet that need. Numerous projects are underway that do not rely on the private sector to supply all the capital or all the operational capabilities. Countless projects are underway that start small — for example, a few, targeted hot-spots are planned to evolve to “super hotspots,” with capacity for incremental migration to greater coverage as the needs, technologies, and financing allow. These are the kinds of projects that got relatively little attention in the “here comes EarthLink” days.
The mainstream press has not recognized the multiplicity of muni broadband approaches because it is enamored of the simple storyline: during the hype phase, the story was of Google building a “free” network in San Francisco; now, the story is that there is no business case for muni Wi-Fi. Neither of these was or is true. But they are equally dangerous‚Äö?Ñ?Æas a nation, we are not well served by an unfounded perception that community broadband has failed ‚Äö?Ñ?¨ nor were we well served by the earlier perception that it would be easy and free.
EarthLink’s failure has one benefit‚Äö?Ñ?Æit hopefully erases the idea that local government can address its broadband concerns for free. I’ve never believed that most cities, towns, and counties could just put out RFPs and expect the private sector to build these networks. A few cities hold a certain glamour and market power, and they were and still are very well-placed to attract providers that are willing to take all the risk. Even in the best of times, however, this model worked for only a few fortunate cities.
Now, as in the past, a community that is serious about expanding its broadband options needs to do some hard analysis in advance of putting out an RFP. It should evaluate the needs for broadband, the potential market for various services at various prices, and the costs of deployment. This analysis, if realistic, will point to a realistic business model.
Almost certainly, most communities who undertake muni broadband projects will have to invest in their networks in some form or another. (This was true even during the hype days‚Äö?Ñ?Æyou can probably count on one hand the number of cities who negotiated deals with the private sector that entailed no muni financial obligation at all). In one important, evolving business model, local government owns the network itself and perhaps contracts out operations and marketing (in one variation, potentially sharing some of the risk with the operator). In other models, local government partially finances the network, even though it is not an owner, in the form of subsidy, grant, or “anchor tenancy.”
Frankly, many communities outside the big name cities always recognized that Google would not do for them what it would do for Mountain View and San Francisco. All over the country, there are communities exploring multiple options, including but not limited to sharing risk with the private sector.
Every community hopefully assesses its own needs and makes its own determination as to what is necessary. I have seen growing recognition of the complementary natures of wireless and fiber and that wireless, though essential for mobility, is insufficient to meet our broadband needs. Even apart from those cities that are considering fiber-to-the-premises, a number of the communities I work with are exploring wireless deployments with fiber construction in the backbone for backhaul ‚Äö?Ñ?¨ and designing the system for maximum flexibility to scale up, potentially serving more locations over fiber in the long run.
One of the less-discussed lessons of EarthLink’s failure is that WiFi can be both harder to make work and more expensive than EarthLink’s and others’ early business plans recognized.
Similarly, I think some business plans failed to recognize the amount of customer service and support that would be necessary to hook up some users‚Äö?Ñ?ÆWiFi, like all technologies, does not make itself work; it takes time and money to set up. It also has a limited life-span, and some business plans failed to account for refreshment and replacement costs within just a few years.
As communities recognize these complexities, they see that WiFi is not as cheap as it can appear. This recognition suggests that other technologies be considered as well.
Just a few simple things to get started:
First, take heart that the hype bubble has burst, and you are working in a more realistic environment.
Second, recognize that this is not going to be easy or free‚Äö?Ñ?Æyou are going to have to invest energy, time, and likely funds in the project ‚Äö?Ñ?¨ as you would in any other municipal project.
Third, let your needs drive the project, rather than the technological flavor-of-the-month. In other words, don’t start by selecting the technology–start by broadly assessing your communications needs, both of your government and your public. This will tell you not only what the market is for your project, but also the size of the need (and, indeed, whether there is a need). This analysis should point you to particular technologies, strategies, and business models.
Taking a very big step back, despite the best efforts of localities, our national broadband needs cannot be met by local governments alone; the needs are simply too great. Our competitor cities and nations in Europe are developing partnerships not only with the private sector ‚Äö?Ñ?¨ but also partnerships among national and local governments to facilitate true broadband deployment. We in the US also need federal leadership and significant federal financial commitment to build the next generation of broadband that will keep us competitive with other nations.
My last word, then, is to urge that one of the most important things those of us in the local government community can do is to demand federal involvement, while insisting on (and demonstrating) the importance of localism and that local government is an essential part of our national broadband future.
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Excellent review of the market and the media hype.
The only comment I would make relates to the following excerpt: “…don’t start by selecting the technology–start by broadly assessing your communications needs, both of your government and your public.”
She is right-on with, first determining needs, but missed what happened in this market when Cities picked a Provider instead of the best technology to address these specific needs.
Jim
Joanne is the modern equivalent of the Oracle at Delphi when it comes to trends in municipal broadband. This is a very timely and insightful interview.
Joanne is right on the money with her comments. Based on our experience working on a number of these projects I would amplify a few of her points.
I note that Joanne frequently substitutes the term “community” for municipal. This is a subtle, but important distinction when working on broadband projects. We have found that each community is quite different, with unique social, demographic, and political forces that drive overall requirements, and ultimately the selection of cost-effective technologies and the most appropriate business model. Successful projects usually require broad community support beyond local government support and leadership from a few key champions.
Understanding the community and assessing its overall requirements, in the broadest sense, is the most important first step. It establishes a foundation of cooperation and support from across the entire community. The data collection process itself can be used to educate people, local institutions, and businesses about what is realistically possible and to build consensus around what network services the community actually needs, as well as identifying local providers that can participate. Ideally, the entire community becomes stakeholders, vested in the idea, supporting the community broadband project as if it were the “home town team”, and making a broad public-private partnership possible. This is usually the key to marketing a successful community broadband network.
Successful networks and network business models are also based upon applications and services that solve real problems and deliver real applications for people and organizations in the community. Sometimes these networks are appropriately focused tightly on specific applications, such as public safety or municipal services. For broader, community-wide projects, the assessment described above usually identifies many applications, and the potential to enable cross-sector collaboration that builds the application infrastructure that is so often needed for the community broadband network to deliver its full potential. This potential is fulfilled when community traffic is maximized and aggregated on the community network to insure significant revenue and cash flow. Local service providers are usually quite interested in such situations, enabling the “public” part of the partnership to focus its efforts and investments in incrementally expanding network infrastructure and services to specific portions of the community with special needs. Public support can come in the form of anchor tenancy for services used, low-cost capital, or subsidies to promote digital inclusion.
There are lots of community broadband business models that are working, and will work in the future when they fit the communities need. I don’t it’s about “moving away” from the models that have been already tried, but expanding upon them, mixing and matching the best attributes from several to get the right one.
I’ll close with just one more point. Sometimes, people get hung up on a particular technology – WiFi – for instance. If the requirements assessment is done properly, most communities will probably require a mix of technologies to satisfy their needs. So, in addition to talking about “muni-WiFi”, let’s also start talking about “community broadband”.