Free High Speed Internet to the Home or School

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, September 2, 2008

Networked ESCOs

An Alternative to Con Ed Revs Up Its Sales Force
http://www.nytimes.com/2008/09/01/nyregion/01ambit.html?pagewanted=1&_r=2&ref=nyregion

The business model — or ground-floor opportunity, as Mr. Montie put it — is not unlike Amway, Nu Skin and other multilevel marketing businesses: Average Joes and Janes sell friends a product or service (who, in turn, sell friends a product or service) with each seller getting a slice of the recruit’s spending in return. Only instead of pushing soapsuds or vitamins, Ambit evangelists sell gas and electricity.

The approach is a novel and perhaps inevitable byproduct of utility deregulation that began a decade ago, with broken-up monopolies now facing competition from alternative energy service companies, known as ESCOs. Hundreds of ESCOs have sprung up — and some have folded up — in recent years, promising to supply gas and electricity cheaper than giants like Con Edison, which still delivers the power. In New York City and Westchester County, ESCOs have nearly 600,000 customers (Ambit officials refused to say how many customers it has locally or nationally).

Direct Energy Services, IDT Energy and many other ESCOs — eager to capitalize on fears over high fuel prices — use mass mailings, Web sites and door-to-door salespeople to recruit customers from Con Ed by promising they will save 7 percent on their supply cost for the first two months, and avoid taxes on the delivery of that supply. Direct Energy reckons that customers in a typical New York City apartment can shave about $6.50 off their monthly electric bill.

Companies offer perks, too. Energy Plus gives customers bonus miles on various airlines for every dollar they spend on electricity.

Ambit, which was founded in Texas in 2006 and came to New York in June 2007, is one of a handful of ESCOs experimenting with the network-marketing model, betting that people are more likely to buy electricity from someone they know than from a stranger at their door (and that sales agents who earn residuals from those they enlist will be more motivated than those who work for a salary or straight commission).

Mr. Chambless declined to discuss Ambit’s finances because it is privately held. But he said he and the company’s chief executive, Jere W. Thompson Jr., had a lot of experience in deregulated markets. Mr. Chambless added that Shell Energy Trading, a subsidiary of Royal Dutch Shell, had also agreed to sell energy to Ambit, a major endorsement of the company’s prospects.

Monday, August 25, 2008

A new model for fiber deployment

http://app-rising.com/2008/08/a_new_model_for_fiber_deployme.html

Last week I had the great fortune to learn about a potentially revolutionary new model for deploying fiber from Bill St. Arnaud, senior director for advanced networks at CANARIE and long-time industry visionary.

How Fiber to Home helps Canada's First Nations retain their culture

[Excellent series of articles in PC world on the benefits of Fiber to the
Home for various broadband applications serving communities around the
world. Thanks to Matt Wenger for this pointer-BSA]

>From the PC world article:

http://www.pcworld.com/article/147907/broadband_innovations_part_2_fiber_opt
ics_reaches_the_tipi.html

Prior to the arrival of European settlers, the indigenous Ktunaxa
people of British Columbia had a
thriving culture going back 10,000 years. Following more than a century of
abuse and mistreatment at the hands of the Canadian government, however, the
Ktunaxa's language and culture have been all but eradicated.

Now, innovative uses of cutting-edge broadband and digital recordings of
tribal elders are enabling younger members to hear the sounds of the
language, giving Ktunaxa leaders hope for its future.

"With no prospect of the infrastructure in our traditional territory
improving, we took it upon ourselves to develop our own
broadband network in order to
make use of these important language-training resources," says Maki.

In March of 2007, the mission was accomplished. The Ktunaxa Nation now has
North America's only native-owned open-fiber-to-the-home network, providing
speeds of 100 megabits per second to each home.

"We're now wired like no other community in North America. Everything we do
is based on connectivity. Not many people get a chance to change the course
of predicted history, but with hard work and fiber, we will," Maki says.

Matt Wenger writes:

Interesting four part series of articles in PC World highlighting

"groundbreaking broadband uses, and the people who employ the technology to

preserve the past, reshape the future, and fulfill their dreams." To quote

them.

Of particular interest to many of you will be part 2, the feature on the

Ktunaxa nation fiber network in Canada.

http://www.pcworld.com/article/147907-15/broadband_innovations_part_2_fiber_
optics_reaches_the_tipi.html

In terms of the other three articles:

The first article on gaming as Olympic sport this year can be found:

http://www.pcworld.com/article/147903/broadband_innovations_part_1_the_21st_

century_athlete.html

Part 3: "The Film Editor's Dream" A well-known Swedish film editor fulfills

his dream of working remotely while living in a rural area, thanks to a

superfast fiber-optic broadband connection.

http://www.pcworld.com/article/147904/broadband_innovations_part_3_the_film_

editors_dream.html

Part 4: "The Doctor Isn't In But Can See You" In the final installment,

focuses on how NorthWest Telehealth is delivering quality healthcare

remotely. http://www.pcworld.com/article/147905/article.html

What I like, is the emphasis on what is ACTUALLY being done rather than what

could maybe one day happen. There may be good contacts here for many of you

to follow up with to learn more about what they did and how they did it.

Monday, August 18, 2008

Importance of Home Run Fiber vesrsus PON

Here is a good article in Lightreading about the FTTH networks they are deploying in Vermont. They are using the same architecture as in Amsterdam CityNet - ie. Home run fiber.

Home run fiber provides a lot more flexibility and opportunity to deploy new business models than PON. PON is a technology that insures the carrier stays in charge of the network and has limited scalability.

http://lw.pennnet.com/display_article/332028/13/ARTCL/none/none/1/Vermont-gets-serious-about-FTTH/?dcmp=LWDENL_ARCH

The Business Challenge of Fiber to the Home

http://www.heraldextra.com/content/view/263223/18/

A good summary of the business case challenges of FTTH regardless of whether you are a municipality or a telco

....

In 2003, when an 18-city consortium began organizing UTOPIA's build-out, the $400 million network was glowingly seen as serving nearly 249,000 residences and 34,580 businesses. Eventually, the projections were cut roughly in half. Eleven cities in Utah, including Orem, Lindon and Payson, committed to the bonds, pledging $202 million in sales tax revenues over 20 years to pay them back.

Now, unexpectedly low subscriber counts and revenue shortfalls are threatening UTOPIA's ability to continue to make its bond payments. Tax revenues haven't been tapped yet, but if UTOPIA fails, the 11 cities could be on the hook for up to the full $202 million, the Utah Taxpayers Association warns.

To avoid that, UTOPIA wants to refinance. It is asking the cities this week to increase their sales tax pledges and extend their guarantees to 33 years.

The question facing city councils this week is whether UTOPIA's track record gives them enough confidence of future success to commit taxpayers for three decades.

UTOPIA had projected it would bring fiber connections to as many as 70,000 households and businesses in its six member cities, and achieve a subscription rate of around 40 percent by 2008. To date, it has passed fiber connections to about 42,000 households and businesses, with only about 7,200 paying customers. On top of weak customer response, the network's construction costs are above what it had projected.

In iProvo's case, Provo officials had projected that 75 percent of customers would sign up for its top-end "triple-play" -- meaning TV, telephone and Internet services in a single package. They also expected the network, which was built on $39.5 million in sales-tax revenue bonds, to break even when it reached 10,000 subscribers.

Instead, the iProvo triple-play take rate was closer to 17 percent, not 75. And while the network passed the 10,000 subscriber mark late last year, city officials now say they may need as many as 15,000 subscribers to break even because of revenue shortfalls.

Now the city's fiber-optic network is $10 million in the hole, and critics are calling for the struggling venture to be sold.

.....