Build Strategy Makes a Big Difference

Verizon and at&t are fighting local franchising rules of various sorts that the carriers say are deterrents to building new broadband networks. Without fanfare, other providers such as RCN build Triple Play networks without serving the whole community, and find the going tough even without mandatory communitywide buildout requirements. The problem? The economics of competitive local networks are tough, since no single provider can reasonably expect to get much more than 20 percent of potential customers in a market with four providers, for example.

Another way of putting matters is that 80 percent of the local ports have no customers on them, and no revenue. That's not a prospect likely to make capital providers very comfortable. The fact is that some parts of every community, and some neighborhoods within every community, are more profitable than others, as indicated by Solon Management Consulting. Building in the most-profitable neighborhoods first, to get the revenue flowing, before tackling the more problematic areas is simply a business reality.