Executive Summary

One of the significant challenges facing network operators today is the high capital cost of deploying next generation broadband network to individual homes or schools. Fiber to the home only makes economic sense for a relatively small percentage of homes or schools. One solution is a novel new approach under development in several jurisdictions around the world is to bundle the cost of next generation broadband Internet with the deployment of solar panels on the owners roof or through the sale of renewable energy to the homeowner. Rather than charging customers directly for the costs of deployment of the high speed broadband network theses costs instead are amortized over several years as a small discount on the customer’s Feed in Tariff (FIT) or renewable energy bill. There are many companies such as Solar City that will fund the entire capital cost of deploying solar panels on the roofs of homes or schools, who in turn make their money from the long term sale of the power from the panels to the electrical grid. In addition there are no Energy Service Companies (ESCOs) and Green Bond Funds that will underwrite the cost of larger installations.

For further information and detailed business analysis please contact Bill St. Arnaud at bill.st.arnaud@gmail.com.

Tuesday, December 23, 2008

The $15 billion broadband bonus

[Here is a good paper referenced in the Cook Report that demonstrates the impact of broadband on GDP. While most other studies have done a lot of waving about the impact of broadband, this paper is the most analytical I have seen in some time.

As governments talk about economic stimulus, what this paper demonstrates is that the biggest bang for the buck will probably be in broadband deployment. While digging sewers and building bridges is important, the leveraging of such investments in terms of creating new economic opportunities is nowhere close to that of broadband deployment.

But its also important that we make the right investment in broadband. It cannot and should not reinforce existing duopolies. It must enable a competitive environment and a level playing field. That is how we will maximize innovation and economic leverage.

Brough Turner gives several good example of this type of investment through customer owned networks in a recent talk he gave at Emerging Communications Conference
Slides at: http://www.slideshare.net/eComm2008/brough-turners-presentation-at-ecomm-2008
Audio at: : http://itc.conversationsnetwork.org/shows/detail3719.html

Also FreePress, a national, nonpartisan organization working to reform the media, argues for the same solution for the US through a $5 billion investment to “. An innovative idea that has been successful abroad, this proposal is designed to deploy world class fiber-optic networks which are shared by multiple competitors. This program would award higher levels of investment tax credits and accelerated depreciation to entities that deploy more than a single strand of fiber to an end user for the purpose of selling the fiber to a competitive provider. In addition, the program would allow all taxes on sales of the additional fiber to qualifying third parties to be completely deferred for five years. This approach would spur competition in the broadband market, encouraging demand and innovation
http://www.freepress.net/node/46686


The $15 billion broadband bonus
http://www.kellogg.northwestern.edu/faculty/greenstein/images/htm/Columns/broadband%20bonus.pdf
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