Free Newsletter
Broadband stimulus: An enabler, not a panacea
Free newsletter via e-mail
Tools
As the National Telecommunications and Information Administration (NTIA) gets set to pore over a new set of broadband stimulus funding applications, the focus in the second round will be on middle mile networks that will carry last mile traffic to Internet hubs and provide connectivity to schools, hospitals, etc. At the same time, both the NTIA and RUS (which will focus the second round of funding on last mile projects) also have the daunting task of sending out rejection letters to those entities that won't be getting funding.
Like everything else I have seen in the telecom industry over the past almost 12 years (this July), the middle mile idea, while only coined fairly recently, has really existed as a concept for decades. First, there are the telephone cooperatives that banded their resources together in particular regions to build sometimes statewide networks to support everything from basic LD voice, legacy data (Frame Relay/ATM), video and increasingly optical and next-gen IP connectivity. Iowa Network Services (INS), South Dakota Network (SDN), and more recently Independent Optical Networks (ION), which just won a $39.7 million broadband grant, come to mind in this category.
Similarly, Research and Education providers MCNC, Merit Networks and Internet2 have separately focused their attention on providing network connectivity to colleges and even local high schools and elementary schools. Internet2 now wants to break out of its R&E shell by extending its network expertise to community anchor institutions by creating what it calls a "Unified Community Anchor Network."
Lastly, there's the traditional network wholesalers (Level 3 and 360 Networks) who interestingly built long-haul networks that passed through rural towns, they never could sell to the smaller carriers that resided along these paths because the expense to connect to them just could not be justified. But with broadband stimulus monies in hand, these service providers would simply extend connections from their existing regeneration huts to connect to smaller carriers with more affordable connectivity.
Likewise, providing connectivity to schools, hospitals and libraries is no less important. Still, despite the progress made in North Carolina (MCNC) and New York's Westchester County telecom network, connectivity for schools in other states such as New Hampshire continues to be, well, woeful.
I found out this reality first hand when I headed up north to Nashua to visit managed service provider Destek. A major focus for Destek is to provide managed services to schools in New Hampshire. The connectivity issue is not technological, but rather financial. And while it would be great if Nashua and the other towns that the company serves had the benefit of a fiber-based middle mile network built by FairPoint or a group of smaller towns, what will continue to hold back these areas is just the sheer cost of building a network to serve what are very remote areas.
"The ideal solution would be to bring fiber to every school, but it costs $10,000 a mile to install fiber," said Brian Susnock, President of Destek. "Some of these schools in these rural areas of New Hampshire are sometimes set back two miles into the woods and it's awfully difficult for them to raise that kind of money."
To overcome these shortcomings, Destek has found creative ways to allocate greater bandwidth over existing copper facilities via bonding T1s it rents from FairPoint Communications and wrapping that connection with good old customer service and 24x7 tech support.
Even as middle mile networks go up, I do agree there's no promise that we'll see a torrent of last mile network investments. What's worse, a middle mile network won't do much if students don't have the broadband connections at home to connect to the schools or other interactive applications.
While the Obama administration had the right intentions, these issues illustrate the reality that broadband stimulus will be an enabler for those entities that win funding, but not a panacea. --Sean
More stories about Telecommunications Industry Association NTIA Iowa Network Services Internet2 360 Networks
Comments
Posted by Sarah Parkes | February 4, 2010 - 7:10am
Interesting article, Sean.
For a long time the telecoms industry has talked about its ability to deliver cost-effective trans-sectoral services – healthcare, education, transport and energy management, etc - but for the most part has been unable to move much beyond literally hundreds of pilots and trials. A key reason is that the immediate benefits are not showing up on the balance sheets of the telcos – the social and economic benefits will be on a national level.
That’s why the debate needs to move from the ICT sector to the top of the decision-making process – and why it is the President Obamas of this world who are starting to set the scene.
The International Telecommunication Union’s Build on Broadband initiative, just launched, recognizes that the time has come for governments worldwide to play a leading role in driving network build-out, just as they did for the first phone networks 100 years ago.
Leadership is needed to lift this off the telecoms agenda and place it on the national agenda. Government leaders need to drive development by formulating National Broadband Rollout Plans that link e-health, smart grids, smart cities and smart infrastructure directly to ubiquitous fibre infrastructure.
Countries that have prioritized broadband, such as Korea and Singapore, are already reaping substantial rewards in terms of their business competitiveness and savings on the delivery of a whole range of public services. A recent report by the OECD shows that savings of less than 3% in just one key sector – heath, education, energy, transport – could amortize fibre roll-out costs in just 8-10 years.
Indeed, analysts say that, based on an FttH investment of say $1,200 per home, the cost over 20 years would only be $60 per annum. The cost of painting a house over that same period would amount to more than this.
Infrastructure companies are very used to such investment models. Yes, a national fibre-based broadband network will cost a lot of money, but it all depends on how the investment is designed and where the costs are allocated. Governments need to show leadership to make it happen, but once that is done, and working in partnership with the ICT industry, the plan can fall into place without massive financial government investment.
Comments (1) | Post a comment