Is municipal broadband worth the cost?

Samantha Bookman, FierceTelecom

This week, FierceTelecom takes a look at five contenders in the municipal broadband space. It wasn't easy to pick just five--a growing number of communities are taking on the broadband challenge, building out or planning fiber networks to serve residents and attract more businesses. But the cost of this buildout can be crippling for cities, some critics say. Is it worth the cost?

Municipal broadband advocates think so. The problem, until recently, was a relative lack of data on the actual benefit to communities.  

But that data is beginning to roll in. Craig Settles, an analyst and municipal broadband advocate, partnered with Broadband Communities Magazine to survey a number of municipal broadband buildouts about the minimum amount of speed necessary to achieve successful results.

"About one-third say about 100 Megs is what people are seeing as baseline (in rural areas). There were a decent number of respondents for 1 Gig," he said.

Craig Settles broadband speed minimums

Survey: "In your opinion, what's the minimum symmetrical (both download and upload) broadband speed your area needs by the end of 2015 to directly impact these outcomes?" (Courtesy of Craig Settles)

Funding is another issue for municipal broadband, but in his survey Settles found cities pursuing a range of options.

"Among these variations, conventional banks and institutional financing was the one where the most number of folks said they could see their community doing that," Settles said. "In second (place) was bond measures. That's interesting because both options have been discounted (in the past). Many still think communities have to raise taxes or create public-private partnerships."

Settles, who will present his survey results at the upcoming Broadband Communities Summit, also found that Google's move into Kansas City is generating additional interest in public-private partnerships.

"This survey had 49 percent of those surveyed saying 'we can get a group to invest money.' The upcoming announcement that Google is going into Austin (is driving) people in a lot of smaller communities to say, 'these guys aren't Google but they're here,' Settles said. "They see some significant advantage to having these networks in place."

Craig Settles broadband impact survey

Survey: "How has fiber broadband impacted (or how would you expect it to impact) these economic outcomes in your community?" (Courtesy of Craig Settles)

In our second installment of The Contenders, I take a closer look at five municipal broadband providers: pioneer provider Bristol Virginia Utilities, the city of San Leandro's private-public hybrid project, EPB Fiber in Chattanooga, the city of Wilson, N.C., and Lafayette, La.'s LUS Fiber. Although detailed data is still rolling in, it's already clear that municipal buildouts are having an impact on incumbent telcos and cable operators in these areas.--Sam

Check out The Contenders: Municipal fiber providers meeting or beating the incumbent competition.