PacketFront is a very strong and vocal advocate for the open access model in municipal broadband. Open access is the only community network model that offers true freedom of choice and competition for consumers. In the right setting, open access networks bring down retail prices and increase service innovation, thus stirring economic growth and enhancing quality of life.
That being said, open access isn’t a viable option for every community network. In fact, we don’t believe open access is really feasible for networks of less than 3,000 homes. Further, to be really successful, open access networks need to start with 30,000 homes and businesses and go from there.
But how then can small and rural communities hope to reap the benefits of an open access network? To answer this question, it is probably useful to define the options available for service provider access to networks.
Closed: Networks that have one exclusive service provider. This single service provider may provide a variety of services on the network (voice, video, different levels of data service, etc.). This scenario is often seen in networks that are actually owned by the service provider as well (good examples of this are the Verizon FiOS networks, cable company networks, etc.). Closed networks are also found in smaller communities that, due to the low number of potential subscribers, cannot offer enough incentive for more than one service provider. Sometimes, a municipality that builds and owns its network will also choose to offer retail services on that network as the only service provider.
Limited Access: Networks that limit access to a capped number of service providers—more than one but fewer than five. This is a newer model which may suit some rural networks, especially in their earlier phases. Typically, the suite of service providers in this scenario would include at least one major triple-play provider, as well as one or two additional voice/data providers, and perhaps one or two niche providers.
Limited access networks allow smaller networks (less than 30,000 addresses) some of the same benefits of a completely open network while still allowing a solid revenue proposition for the service providers. In other words, by limiting the number of providers on the network, there is more revenue to share.
Open Access: Networks that are open for any qualified service provider to use. Sometimes these are owned by municipalities that offer the use of the network to service providers for a wholesale rate. The service providers then sign up subscribers and charge a retail rate; their profit comes from the difference between the retail rate they charge their subscribers, and the combination of their operating costs and the wholesale rate (or revenue share) they pay to the network owner. In a completely open network with a large enough subscriber base (typically more than 30,000), many service providers will join the network, offering major voice/video/data products, along with niche products that fulfill specific needs (i.e, distance education, telemedicine, security, gaming, visual communications, etc.).
No matter what option works best for a network at its outset, bear in mind that it is much easier to accommodate future growth on a network if it is initially built as an open access network. Why? Technologically, it is much easier to move from a limited access network to an open access network than it is to move from a closed network to an open- or limited access network. This is because the decisions made early in the design and build of the network (open, closed, limited) will dictate many of the decisions regarding governance, financing, marketing, electronics, and operating systems.
So if any type of an open network is anticipated or desired in order to achieve the long-term objectives of the network, PacketFront would recommend that the network be initially built to accommodate an open access model, even if it will be operated, at first, as a closed or limited access network. Doing so will enable a far easier and less expensive transition as the network grows and evolves.
The idea here to be able to easily add more service providers to a network as it matures, (even if the network starts with just one provider) in order to provide the freedom of choice and service innovation that is the promise of open access.
A community fiber network will encourage innovations beyond the standard services typically provided on a closed network to include telemedicine, distance education, local community outreach, social services, e-government services, spiritual services, and in-network communications. Competition drives innovation and product development. Traditional phone and cable providers are not on the leading edge of new application development—because they operate in a closed environment and do not invite true innovation.
For example, if a local health care clinic wants to run a consultation service (a live “Ask a Nurse” service that uses remote visual communications) on the network, do you think the local cable company would consider allowing the clinic to host their service on the cable network (even assuming it had sufficient bandwidth)? No, but the clinic could easily offer this service on the community-owned network. Likewise with any other local service provider—a community network creates opportunities within the community to foster innovation, creativity and competition.
This sense of community growth through a community-owned network has been extremely successful in many European communities. Though the concept is still emerging in the United States, it is gaining mindshare and being implemented in communities this year.
Peter Drucker said that there are only two things that really matter in business—Innovation and Marketing, everything else is an expense. The success of a community-owned open access fiber-to-the-home network will happen when these two things come together. Remember—when communities began installing electrical grids, the only thing we really knew to use electricity for was to power light bulbs. Think of all the applications we’ve since discovered and expect from electricity!
I had the opportunity to visit Pete Royer in his spacious office in Hutchinson earlier this week. Pete shares his space with a colleague, multiple computers and monitors and stacks of assorted stuff that tech coordinators rely on to get through the day. Blandin Foundation helped to fund the acquisition of digital recording equipment so that Pete can record multiple video conferences at one time. He was able to show me a sample of a Chinese language class originating from Hopkins with participating students from multiple districts (see picture and note the Chinese instructor). One of the ironic things about making site visits on technology projects is that the use of the technology is so exciting, but the electronics that make it possible are so boring to look at! While a rack of electronics may have multiple purposes, to my untrained eyes the boxes all look alike! Nevertheless, Pete is extremely excited about the opportunities that the new equipment enables, especially combined with some new Adobe streaming video software that they are just installing. Pete recently posted some information elsewhere on the Blandinonbroadband blog about how to view some of the video conferences that they have on their public server. Check them out! Of course, advancement on one side of the network infrastructure places strain elsewhere. Video storage capacity is next on Pete’s agenda.
I had an