Public-private parterships for telecom infrastructure modernization hamstrung by subscription-based business model of incumbents

Citywide broadband service could cost over $200 million, study says | Local News | host.madison.com: In the report, CTC recommended that the city pursue an approach in which the city would build and own the fiber network. Private businesses would then provide internet service and build lines connecting individual users to the network.

This of course assumes those "private businesses" are willing. This is a major downside of applying an end user subscription-based model employed by legacy incumbent telephone and cable companies that has produced widespread cherry picking, redlining and market failure in the United States. Using the same business model isn't going to result in a rapid project that builds out to serve all Madison, Wisconsin homes, businesses and institutions. The private partners will run the numbers and likely conclude that simply doesn't pencil.

Soglin said covering the cost for the project would be a challenge, but said the move would foster competition among internet service providers and force them to improve their services.

Perhaps among the service providers. But certainly not among infrastructure builders since telecom infrastructure tends toward a natural monopoly due to high costs to play in the market.

"It will be a fight, politically and economically, with the companies that would rather have monopoly kind of control," Orton said.

That would be Barry Orton, chairman of the Citywide Broadband Subcommittee and a professor emeritus at UW-Madison. And he's right. The subscription-based, sell and own the customer business model favored by legacy telcos and cablecos promotes a winner take all mentality that along with the aforementioned microeconomic realities foster a monopoly market.

Barring ambitious federal program, state & local government P3s with legacy providers not a solution for U.S. telecom infrastructure deficits

CenturyLink, Frontier and TDS mull public, private fiber network partnerships - FierceTelecom: CenturyLink (NYSE: CTL), Frontier Communications and TDS are amongst a growing group of service providers that are considering partnering with local communities to build out and upgrade their networks to support higher speed residential and business services. Jennifer M. Fritzsche, senior analyst for Telecommunication Services - Wireless/Wireline at Wells Fargo, said that while CenturyLink, Frontier and TDS are looking at working with local communities, the one remaining barrier is who will oversee and operate these networks.

Actually, the bigger -- and biggest barrier -- is funding. These legacy players lack business models to generate adequate funding to build out fiber to the premise infrastructure serving all premises within their service territories within a reasonable time frame. But so do state and local governments. Especially as they continue to cope with the aftermath of the Great Recession and many competing needs for public funding such as deteriorated roads and highways and other infrastructure and enormous public pension obligations.

Some local governments and particularly those with pre-existing telecom or electric power infrastructure such as those mentioned in this article are the sole viable candidates for these P3 arrangements. That could change if the federal government launched an ambitious program appropriating the many billions needed to ensure every American home, business and institution has a fiber connection.

Broadband and the future of learning | Computerworld

Broadband and the future of learning | Computerworld: Since learning may take place anywhere and anytime, connected learners also need broadband access outside of school. Although 70% of U.S. households now have broadband, millions of households still do not. Private-sector initiatives are helping to expand access. For example, Comcast’s Internet Essentials program offers low-income families broadband service for $9.95 a month, along with the option to purchase an Internet-ready computer for under $150 and free digital literacy training. In its first three years of operation, the program has provided affordable broadband service to more than 350,000 households.

It should be noted that Comcast and other incumbent legacy providers redline many neighborhoods, leaving them without access to modern landline Internet connectivity at any price.

There are also promising public-private partnerships to increase access. In Forsyth County, Georgia, the local school district worked with the Chamber of Commerce to create a directory of free Wi-Fi locations in the community and to provide participating businesses with signs indicating where free Wi-Fi is available. And a middle school in Manchester, Tenn., that has equipped all sixth-graders with iPads had convinced local businesses to open their Wi-Fi hotspots to students to maximize the benefits of their technology tools.

Public-private partnerships need to go far beyond Wi-Fi and help construct fiber to the premise infrastructure to make blended learning possible since it heavily relies on students having adequate access in their homes. A good example is in Utah, where an investment firm, MacQuarie Capital, is partnering with the Utah Telecommunications Open Infrastructure Agency (UTOPIA) to finance and complete the construction of open access fiber to the premise infrastructure.