Last week’s news that the City of Baltimore is exploring ways of improving its broadband service options raises some interesting issues. The city reportedly is considering building its own broadband fiber network, on which it would lease capacity to Internet service providers, but also is closely examining what might be achieved through Comcast, which currently provides cable and broadband in the city through a cable franchise agreement that expires at the end of 2016.
It’s interesting to consider whether other cities also might take a similar approach to improving broadband access.
Baltimore tried and failed to win a fiber network from Google through that company’s Google Fiber ultra-high-speed network program. And the city appears to have learned some lessons from that experience.
As Telecompetitor has previously reported, one of the reasons Google apparently chose Kansas City for its initial fiber network is that the city made it easier and less costly for Google to deploy fiber than that process traditionally would have been. For example, the city minimized some of the fees Google would have to pay to build its infrastructure in exchange for obtaining free services to schools and government buildings.
The Baltimore Sun report quotes Baltimore’s chief information officer espousing a similar view. “We want to make it more profitable for providers to come in here and offer expanded service,” he said.
As Google has attempted to expand its Kansas City strategy into similar markets, however, the service providers that are already in those markets are beginning to demand similar terms. Right after Google announced plans to bring its ultra-high-speed network to Austin, Texas, AT&T said it, too, was “prepared” to build an equivalent network under the same terms and conditions.
The City of Baltimore wisely seems to realize that any deals it is prepared to offer must be offered to all service providers under the same terms and conditions.
What makes the Baltimore example a bit challenging, however, is that, according to the Sun report, the city’s deal with Comcast gives Comcast virtually exclusive rights to offer cable TV service in the city until 2016. If other carriers can’t offer video over any new broadband infrastructure they would deploy that would decrease the attractiveness to those carriers of making the investment in broadband. Perhaps the city is hoping that by applying pressure to Comcast now it can persuade that company to up its broadband investment before the cable franchise runs out.
Ultimately I doubt Baltimore will build its own fiber network. The Sun article includes no discussion of how the costs of network construction might be funded – although it does notes that part of the $157,000 the city plans to pay Magellan Advisors to explore new broadband options will go toward identifying “’key anchor tenants’ that would lease portions of an expanded city-owned fiber optic network.”
Potentially if the city were to gain commitments from those anchor tenants, the prospect of a construction project could be made more palatable. But if any public funding is required, I think it could be a hard sell in today’s environment.
Nevertheless the threat that the city could build its own network could be just what the city needs to get Comcast or other network operators to rethink their broadband investment plans there. And I wouldn’t be surprised to see other cities using a similar strategy.