Tuesday, May 24, 2016

Huge Shift in Local Government Thinking and Policy Leads to Gigabit Internet Access Investment

A really-major shift in thinking by municipal officials has occurred, where it comes to permitting, licensing or franchising high speed Internet access businesses.

In the past, it would have been impossible for any telco or cable TV company to get permission to build a network unless that network reached all homes in a city or town.

The new thinking--spurred by Google Fiber--is that Internet service providers should be allowed and encouraged to build gigabit networks wherever there is demand within a city, without requiring ubiquitous network builds.

That is the reason Verizon Communications now is building out gigabit connections in Boston, for example, when the original business case--assuming a ubiquitous build--was not deemed attractive.

"The past administration here wanted the sort of buildout we have done in other areas where you build everywhere and you go in and get penetration," Verizon CEO Lowell McAdam said. The new administration, on the other hand, is "more willing to help us get rights of way, help us push fiber into the neighborhoods, and do more pre-subscription a la the Google model."

In other words, by allowing ISPs to build only where there is a reasonable expectation of demand, high-performance networks are being deployed where they would not have been built before.

In part, that change followed the example of the competitive local exchange carrier business, which allows service providers to build facilities only in areas where there is business customer demand for high-bandwidth services.

That, in turn, was not lawful until passage of the Telecommunications Act of 1996. The new attitude by local government officials is leading to more intense deployment of gigabit facilities than would be the case if all builds had to be ubiquitous across a city.

That is a really big deal.

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