Broadband goes local in Montana and New Mexico

The digital divide is being sliced in two Western states where a rural telecommunications provider, Nemont Telephone Cooperative of Scobey, Mont., and the city of Santa Fe, N.M., have taken it upon themselves to fill the gap between narrowband and broadband.

Nemont, in an announcement on its website, said it is launching Montana's "first gigabit community in Scobey, Mont.," for residential and commercial customers. In Santa Fe, the city's Economic Development Division is entering a crowded field of providers that include CenturyLink (NYSE: CTL), Comcast (NASDAQ: CMCSA), Cyber Mesa, NM Surf and other smaller companies in an effort to raise broadband speeds and lower broadband prices.

Of the two, Nemont is the more conventional and least threatening to incumbent service providers--and the one with by far the higher broadband speeds. The rural telecom has been deploying fiber in its 14,000-mile service territory since 2007 and now it's going to use Calix technology to meet its "ultra-fast gigabit needs," CEO Mike Kilgore said.

Santa Fe's actions are a bit more contentious and the speeds being promised a lot slower. City officials are touting a municipal infrastructure that will hike average speeds from 5 Mbps to 10 Mbps. CenturyLink, for one, said it provides 40 Mbps of residential speeds and doesn't think it's necessary for the city to invest $1 million in its own broadband infrastructure. The city said its speed claims are a median average derived from speedtest.net.

"CenturyLink shares the government's interest in bringing broadband to more New Mexican(s) and we spend millions of dollars every year to do so," said a company statement submitted to the Albuquerque Journal. "However, experience has demonstrated that municipal ownership is not a good solution. In virtually every situation where a municipality builds its own broadband facilities, it's entering a competitive marketplace, thus overbuilding existing networks and wasting limited tax dollars."

Kate Noble, acting director of Santa Fe's Economic Development Division, said that by building its own network--which, under a four-year deal will actually be run by Cyber Mesa Telecom--"there will be more opportunities for economic development because of the access it will provide."

There is one other point, added Sean Moody, who will administer the project for the Economic Development Division: "The wholesale price offered per megabit in Santa Fe is 30 times higher than what they pay in Albuquerque and Los Angeles. The idea here is to disrupt the market on the wholesale side with the expectation that people on the retail side will provide lower prices."

For more:
- see the Nemont Telephone Cooperative announcement
- see this Albuquerque Journal story

Related articles:
CenturyLink helps UETN deliver 1 terabit of combined bandwidth to more than 1,400 Utah schools and colleges
CenturyLink plans to equip 505 Utah housing developments with FTTH
Seattle sues defunct Gigabit Squared for over $50K in unpaid bills

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