Yomura says it can help struggling municipal fiber broadband providers

two utility workers setting up a fiber cabinet on a sidewalk
Yomura says it has a revenue sharing model that can help out struggling municipal broadband providers turn a profit. (btphotosbduk / CC BY 2.0)

Yomura, a U.K.-based wholesale fiber services provider for Europe and North America service providers, sees an opportunity to help struggling U.S. municipal broadband providers.

Owen Stephens, marketing director for Yomura, a company that has enabled municipal networks in other countries like Sweden in a cooperative partnership model, told FierceTelecom that it can help these providers.

“In some cases, there are municipalities that have built a network and they are hemorrhaging,” Stephens said. “These are the sort of networks we want to talk to and we believe we can turn a profit for them.”

The question is how Yomura can help U.S.-based municipal providers get around legal and financial challenges.

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Municipal broadband continues to be a controversial issue with communities trying to take their own service destiny into their own hands while powerful ISPs argue that public funds should not be used to fund competitors.

At the same time, municipal communities like Vermont and others struggle financially or are being hampered by incumbent telco-backed laws in several states that either prohibit or inhibit the reach of a municipal network. In Tennessee, state laws have prevented gigabit pioneers like EPB from extending services outside of Chattanooga, even though the incumbent telco AT&T and cable operator Comcast refuse to provide faster broadband speeds.

There was a glimmer of hope in 2015 when the FCC voted to preempt state laws in North Carolina and Tennessee governing municipally-run broadband companies.

The FCC’s order permitted communities choose whether or not to build their own networks based on their own missions and the ability to expand services to nearby communities. Municipal broadband has been a major focus of FCC Chairman Tom Wheeler. In May, Wheeler started to explore how the commission could preempt over 19 state laws that prevent or discourage municipalities from building their own broadband networks.

However, the municipal broadband movement was struck a major blow in August 2016 when the FCC’s effort to preempt state laws in North Carolina and Tennessee that restrict municipal broadband network reach was overturned by a Sixth Circuit panel.

While the company has not yet announced any specific plans in the United States, the concept is relatively simple: Yomura would operate the network and enter a revenue sharing agreement and then expand service into neighboring communities. Such a model is very similar to the way municipal electric or water providers share services across various communities.

“The municipal game is a bit different because a lot of them are constrained by the city limits,” Stephens said. “We pick up the city network on a royalty basis and roll out from their network to other villages cities or cities around your city.”Stephens added that this agreement is “a win for them because they’re making more money and their neighbors as well.”