Broadband Market in the Twin Cities getting Interesting

The Minneapolis Star Tribune has an interesting article on the state of broadband access in the Twin Cities. There’s a quick rundown on the current status of access…

Workers drilled holes for US Internet’s fiber optic lines in Lowry Hill. White boxes showed up in Minneapolis’ Como neighborhood. CenturyLink’s fiber plans sent city inspectors in Minneapolis and St. Paul running around issuing permits for its new 1-gigabit service.

The average home in the Twin Cities area accesses the Internet at 27 megabits per second. Comcast, the cable TV giant, dominates the market, followed by CenturyLink, which descended from the phone system legacy of names like Northwestern Bell and U.S. West.

And an introduction to a potential game changer – US Internet…

Over the last few years, Minnetonka-based US Internet, a provider of business and wireless services, moved into residential Internet by laying fiber along a few streets in south Minneapolis. The company in a portion of Minneapolis offers Internet access at less than half its competitors’ prices — anywhere from 25 megabits per second to 10 gigabits (see chart).

Now, it’s planning an expansion that will test whether a local, private business can succeed in competition with the giants of the telecom industry. Its effort could drive down the prices that people in the Twin Cities pay for data while renewing a debate between market-driven and regulated access to it.

Some interesting commentary from Chris Mitchell on why USI is such a game changer…

Into this changing media landscape, US Internet is the local wild card, said Chris Mitchell, director of the Community Broadband Networks Initiative, a national organization based in Minneapolis. The firm charges $48 per month for 100-megabits per second service, compared to Comcast’s $115 per month or CenturyLink’s $92 per month.

“There are good reasons Comcast should be more afraid of USI,” Mitchell said. “Comcast competes with CenturyLink around the country. The cable companies have a history of duopoly — of a soft competition rather than hard competition because they recognize that a rough and tumble competition between the two would hurt each more than each is likely to gain.”

It will be interesting to watch. One complaint from the incumbents is that USI is not required to serve the entire community. So of course they can choose the areas that best suit them, which makes for a better business case. I guess that leads to the discussion of broadband – is it a commodity or is it a utility?

I have heard Travis Carter speak – most notably at MN Broadband Task Force meeting last June (2014). He reminds me of the ISP owners I worked with in 1995. Kind of a cowboy, focusing on answers and getting things done and ignoring all barriers. Not all of the ISPs I worked with in 1995 are still around – some were more successful than others, but I have to say I think they served to push Internet expansion forward.

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About Ann Treacy

Librarian who follows rural broadband in MN and good uses of new technology (blandinonbroadband.org), hosts a radio show on MN music (mostlyminnesota.com), supports people experiencing homelessness in Minnesota (elimstrongtowershelters.org) and helps with social justice issues through Women’s March MN.

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