Free High Speed Internet to the Home or School: The Importance of Next Generation Networks for job creation

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.

Monday, March 9, 2009

The Importance of Next Generation Networks for job creation

[Here is a good report on all the future applications and job creation that will be enabled by next generation networks. However, this glorious and wonderful future will not come into reality unless we solve the problem of the business case for next generation broadband deployment and a more competitive marketplace. As long ago as August 1993, Scientific America pointed out that it is NOT new applications that drive demand for broadband but competition driving down prices. The Scientific America article demonstrated that it was the price of telecommunications technology in terms of average per capita income that drives demand and its competition that achieves this price reduction. The PC is a good example of a technology has thousands of wonderful applications, and will continue to do so, but the PC only became widespread once its price became affordable as a result of competition from manufacturers around the world. The opposite situation happened with the telephone, where it took 75 years to reach 50% penetration of homes, because historically it has been very expensive technology as a percentage of average annual income due to its monopoly position in the marketplace.

Some countries like Greece, Switzerland, The Netherlands are starting to understand the importance of providing competition by deploying passive fiber infrastructures throughout their countries with multiple home run fiber strands to every home to enable access by multiple competitors and new business models such as homes with tails, Green broadband etc. Even some carriers such as KPN and Swisscom are starting to understand the importance of this architecture and business model and are beginning to endorse it, as it is the only way that we can cost effectively roll out next generation broadband.

There were several good presentations on this new business model from Greece, Netherlands and Switzerland at the recent Fiber to the Home Council meeting in Europe. Unfortunately the FFTx council has decreed that you need a password to access these documents. – BSA]

The European Fiber to Home Council Meeting - Cophenhagen
http://www.conference.ftthcouncil.eu/

KPN joins Amsterdam CityNet in extending its open FttHnetwork
http://www.trouw.nl/digitalekrant/TR/20090204___/1_012/article4.html

New Report Takes Broadband Beyond Stimulus Debate Next-Generation Networks, More Speed, Key to Growth
Cites Potential for 2 Million Jobs
http://www.itif.org/index.php?id=231

A new report says next-generation networks capable of providing much faster Internet access are needed to provide the next level of services and applications to consumers.

Released today by the Information Technology & Innovation Foundation, “The Need for Speed: The Importance of Next-Generation Broadband Networks” identifies the economic and societal benefits of high-speed broadband, as well as policies needed to encourage further expansion.

“Supporting the widespread deployment of next-generation broadband Internet will enable the emergence of a whole host of online applications and services, many of which we can barely imagine today, that will increase quality of life and boost economic growth,” the report finds.
“The true potential of the next generation broadband network lies in the transformative new functionalities it enables and the innovative Web-based applications it supports.”

The study finds that broadband deployment has the potential to create or save two million jobs for American workers over the time period in which that deployment occurred, further emphasizing the importance of national broadband deployment.

“This report shows us that deploying next generation broadband networks will have profoundly positive benefits for consumers, businesses, academic institutions and society in general,” said ITIF President Robert Atkinson. “Deploying next generation broadband to 80 percent of U.S. households that currently lack it can bring the needed economic stimulus by ensuring approximately two million American jobs.”

The report emphasizes that there is a role for proactive public policies to encourage investment in next-generation broadband networks, such as more favorable tax treatment for such investments.