Incumbents must stop stifling municipal networks

[1]Recently in North Carolina, we were treated to a little fireworks show the likes of which haven't been seen since the 2004 state legislative battles led by incumbents to squash municipal-owned high-speed networks. Though pleased with the outcome of this latest skirmish, I see another incumbent's action as more in line with how incumbents might approach public/private partnerships for pursuing broadband stimulus grants.

Fresh off the heels of its highly popular attempt to institute Internet usage caps, Time Warner pivoted its support to two bills North Carolina State Senate and House allies introduced that would have killed municipal networks in the Tar Heel state. The flashpoint to this activity was Wilson, N.C., which launched its own fiber network last summer that's offering symmetrical speeds of 100 Mbps to residents and up to a gig per second to businesses. Within a 24-hour period last week, the Senate and House sent both bills to committees for study, effectively killing that line of attack for a year.

It's rather ironic that supporters anointed their bill as one to "level the playing field" for Time Warner. Personally, if I ran a multi-billion dollar company and a small town of 48,000 with no prior technology business expertise built a network 10 times faster than my best offering, I'd be embarrassed to claim any part of that legislation. If they want to level the playing field, maybe Time Warner should outsource their engineering operations to Wilson.

Actually, I'm not being unkind, just offering some out-of-the-box thinking. But I'll come back to this in a minute.

In 2006, while cable companies hyperventilated about the evils of muni networks, I blogged and began advocating for these folks to chill and realize that citywide wireless offers them new market opportunities and a pathway to competitive advantage [2]. In 2008, Cablevision decided to take the plunge and offer *gasp* free wireless to its cable subscribers in Long Island. A few weeks ago, news came out that Cablevision has actually increased cable subscribers because of the very thing its industry previously criticized--free WiFi.

What are the lessons here? Let's circle back to North Carolina.

Even though I was a liberal arts major, somewhere in college I discovered that if you're a technology company wanting to attack a competitor's product with a better one, you buy the product and reverse engineer it. Or, as I learned in professional life, lacking the patience for that option, you figure out a better marketing approach.

Small town governments are not noted for having gobs of engineering resources or battalions of technology experts. Yet Wilson used mostly internal staff to design a network that's 100 Mbps down and up. The staff built the network's backbone. They retained a design firm mainly for guidance, and another firm to build out one element of the network. Wilson isn't alone.

While incumbents are making grand proclamations announcing 100 Mbps services, which seem to be more hype than reality when you peel back press releases, Pulaski, Tenn., Lafayette, La., and UTOPIA also have built and launched 100 Mbps services. Forget for a minute the arguments some make about the business viability of muni networks. My blog [3]tackles this issue.

Instead of spending all that money on lobbyists and public campaigns to stifle community efforts, Time Warner, et. al., should be flying their designers into these rural areas to find out how they're pulling this off. The argument that you need to legislate a level playing field is ridiculous. You don't have a 100 Mbps product to compete with and it's not clear when you will. These towns with far fewer resources than private sector companies are delivering the service with satisfied customers now. Don't kill these projects, figure out how to clone them! Or partner with them.

I know, this probably agitates the corporate ego since it appears irrevocably wedded to the concept that government can't do anything right. But give a little thought to adaptation. Though they once ruled the planet, you notice there aren't too many dinosaurs walking around Central Park anymore. If local governments have tax advantages that give them this superlative market advantage (a somewhat lame argument), adapt a new business approach that allows you to benefit as their partner.

Local and state governments (probably) are going to get a lot of money to drive broadband projects. Wilson, Lafayette and other communities like them will be the poster children for these projects. Since government administrators talk and collaborate constantly with peers in other government organizations, lots of towns will want to be the next poster kids. So service providers, get ready to adapt and perform, as my college band director used to say.

Another lesson to be learned is one of creative packaging and marketing. For a couple of years, cable companies rigidly held onto the notion that free WiFi and municipal wireless were the spawn of Satan. They couldn't move their marketing mindset beyond the narrow prison of "we're in the cable business, they're wireless, we must compete." Then a rational thought slipped through the cracks and Cablevision said, "we're in the communications business, and wireless is just another way to communicate. So let's turn this communication service into a marketing tool to sell our other services."

Every day it seems there's a new attack leveled at community broadband. The North Carolina legislative battle is just the most extreme example. But the constant opinions columns, questionable "research" reports and the like only serve to keep the incumbent blinders in place. Free market vs the public interest debates [4] are soooo last century. More to the point, it's a debate that's preventing the type of creative thinking and strategies that help governments, communities and the private sector advance.

I'm not sure yet that Cablevision's free WiFi approach in its current form will adequately address the un-served and underserved communities that are the target of the about-to-be-released stimulus money. Long Island isn't exactly a low-income test bed. But I do like that they corked that awful whine--"we can't compete with local government."

Craig Settles is an industry analyst and workshop leader who helps organizations understand the benefits of broadband and mobile technology. Check out his website at www.successful.com [5].