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What does U.S. MetroNets’ approach to municipal broadband networks include?
U.S. MetroNets (USM) partners with municipalities to design, fund, build, and operate comprehensive fiber-to-the-home (FTTH) and fiber-to-the-business (FTTB) optical networks. As integrator, USM assumes full responsibility for both the planning and implementation using an affiliate network of best-in-class providers. Who provides services on this network? Under our model, communities avoid the legal, competitive, political and technical complexities of providing content. Services such as television programming, telephone, internet, and other telecommunications services are provided by private companies using the municipality’s network as a delivery vehicle. An Open Service Provider Network (OSPN) is specifically structured to have multiple, competing providers use the network simultaneously.

Should our community provide services over the network as well?
Probably not for a number of reasons. In some states there is legislation that prohibits cities from retail competition with private companies. Also, providing services while owning the delivery mechanism can be looked upon as a conflict of interest. The best way, as we have mentioned, is to promote competition among those that already specialize in providing these kinds of services to homes and businesses. That is the best way to keep your community’s best interests in mind.

How is revenue generated for the community and how long will it take?
The economic viability of our OSPN model is, in part,supported by the long-standing fact that people spend money to be entertained—today more than ever before. Month after month, year after year, nearly every household in America opens a checkbook to pay for television, telephone, internet and other communications services. Your municipality charges providers a wholesale transport fee for network use. Better quality services and more competitive pricing to residents and businesses are facilitated through a fair and competitive landscape—free of monopolies and special interests. These transport fees result in revenues that first cover network operating expenses and the debt service required to build the network. Then, excess revenue may be distributed back to the municipality for other community purposes. Every city’s return-on-investment will depend on a variety of factors including population, penetration rates, service rates, cost per household, etc. Our model provides communities with the necessary capital to cover debt service and operational costs until enough revenue is generated for the network to be self sustaining. In typical, full FTTP implementations, a 30% penetration rate represents a break-even point—usually reached within 2–3 years. To date, most cities which have implemented a municipally-owned FTTP network see penetration rates in excess of 40% within the first 2 years of network operation. A simple feasibility study of your specific community and its needs will readily answer these questions.

What about existing telephone and cable television infrastructure?
Existing copper-based infrastructures used by most incumbent telephone and cable companies have serious limitations with respect to delivering true broadband services to entire communities. Even ADSL and cable modems are legacy networks that are simply incapable of carrying even a small, small fraction of the load fiber can carry. An OSPN model is not in direct competition with incumbent providers. It is a “competitively neutral” environment that provides incumbents the same opportunities to promote their products and services as any other provider. We can now reject the outdated model in which each service provider has to build its own physical infrastructure. The public can provide a high-capacity digital network and allow multiple private companies to compete across that network, just as multiple airlines compete at the same airport. Communities are no longer content to just sit and wait until monopolistic-minded incumbent providers decide that they’re big enough and/or important enough to build networks that will reach and serve them. And since cable and telephone companies refuse to work together, many rural residents will never be offered services because the expense to extend them is doubled. Stodgy, stingy incumbents cling to aging copper wires, claiming that people don’t really need fiber’s bandwidth—a reluctance that bodes badly for a community’s future.

What about other broadband technologies?
There are a number of emerging technologies, such as wireless and broadband power line (BPL), that, to the casual observer, appear to be viable substitutes for a fiber optic based infrastructure. While these technologies have their place, they are extremely limited in their ability to offer secure, substantial quantities of bandwidth (10 Mbs and higher). Only fiber provides the bandwidth needed to aggressively move a city into the information age, while providing the assurance that there will be significant “room to grow” to meet all of its future bandwidth needs. Nonetheless, U.S. MetroNets recognizes that systems that deploy fiber in combination with perhaps BPL or wireless solutions may be right for some cities. Such hybrid systems can leverage existing infrastructure and reduce the initial costs that cities experience as they move towards a full FTTP build out. By combining the right technologies, U.S. MetroNets can help cities develop a phased implementation program that not only lowers initial costs, but delivers revenue faster.