By Trevor Jones, OTT Communications
The Benefits of Regionalization in Broadband
Regional broadband approaches provide many benefits over go-it-alone municipal broadband. As you might expect, the benefits fit broadly into the term “economies of scale,” but they go beyond mere cost savings. A regional network can be both more cost effective and more reliable than a smaller localized network. Here are some examples of how regional broadband approaches can deliver better results:
- Extending the middle-mile. In Maine, the Three Ring Binder is an outstanding middle mile asset, but it doesn’t touch every underserved community. As a result, many towns that aren’t located along the 1100-mile route must consider building across neighboring towns for access. By working together, towns can share costs and build networks that interconnect across town boundaries.
- Route diversity and redundancy in the middle mile. In Massachusetts, MassBroadband 123 connects a more underserved towns than the Three Ring Binder, but many of those connections lack diversity. A regional approach can make the network more reliable by making highly reliable “rings” where MassBroadband123 does not.
- Operating efficiency. Trucks, technicians and call centers to support customers all come with fixed costs, or “overhead.” Those fixed costs either don’t increase, or don’t increase proportionally as the number of customers grows. This is a key cost-saving element of “economies of scale.”
- Buying power. Bigger buyers have bargaining power and pay less than smaller buyers. A consortium of towns buying many gigabits of Internet bandwidth and tens of thousands of email accounts will pay less per megabit and less per email account than a single town that needs only one gigabit of Internet and a few hundred email accounts.
With benefits like these, it’s a wonder more communities aren’t following this path, but we do have a few notable examples in New England that we look to for results as they explore regional broadband.
Three Examples of Regional Broadband Approaches in New England
- EC Fiber: This coalition of 24 towns in East-Central Vermont, provides 10, 25, 100 and 500Mbps service options to residents. EC Fiber’s funding approach is unique, because when the government bond market collapsed in 2008, it funded its growth from the contributions of local investors that wanted to connect their towns. This approach has been so successful that the coop was able to attract $9 million in outside financing last year. Its goal is to connect all residents in its territory and expects to have completed construction to every home in 21 of its 24 towns by 2019.
- Wired West: This cooperative of 26 communities in Western Massachusetts is striving to leverage economies of scale to bring true broadband service to its members. Thwarted at times by changes in broadband policy at the state level, Wired West is now working to pool its members’ resources to create efficiency in the operation of networks that will be constructed and owned by its member communities, but designed to work together.
- Our Katahdin: This volunteer-driven non-profit organization is working to promote community and economic development in the Katahdin region of Maine. It has identified the digital economy as a key industry in which the region has key advantages, including access to the Three Ring Binder, quality of life advantages, cooler weather and unused industrial space suitable for data center development. The group recently received a Broadband Planning Grant from the ConnectME Authority, and is in the early stages of developing a plan to expand broadband access in the region.
Will more towns follow suit with their own regional broadband approaches? It may be too soon to tell. We’ll be watching these attempts at regionalization to see how they balance the competing interests of their members and stakeholders against the benefits of working together.
This post originally appeared in the OTT Communications Blog.