Municipal broadband networks – how are they doing?

Over half of the world lives in urbanized areas, according to the UN, and its increasing as more and more people flock to cities for economic gain. By 2050 more than two-thirds of people will live in cities – equating to an influx of 2.5 billion people over the next 30 years or so.

With that huge growth in mind, cities will be increasingly turning to technological solutions to power vital urban services like lighting, heating, transport and road traffic management. So what’s the current situation with delivering the large-scale broadband networks these cities will need?

Early public networks still thriving

One of the early success stories of the broadband industry was community-based networks. Projects such as Sweden’s Stokab, which began life in 1994, still thrive today, providing a fiber optic system for use by many different organizations and individuals in the capital Stockholm. Over 800 customers operate on Stokab, from mobile providers using the fiber to connect up their base stations to banks using the network to link up their offices. The shared nature of the infrastructure gives everyone access and excludes no one.

One of the key drivers behind Stokab was that all broadband providers have to compete to be on it, so it remains publicly owned and, thanks to the inherent competition, affordable, and with a core objective – to deliver “a sustainable information society for all”. But is this commercial approach right for smart city initiatives? Can it deliver the sustainable start of the art connectivity required as demand for data continues to rise?

Boosting local economies

Another of the key drivers behind municipal broadband networks is that they are designed to attract businesses and encourage economic development. Throughout the US for example, community and municipal broadband network projects from Oregon to Florida have had positive impacts on their regions, saving jobs and creating new ones and also offering levels of control not available on a larger scale.

A further big selling point of community and civic broadband networks is that they are intrinsically net neutral, something that encourages competition among service providers and is generally popular with end-users. Being open to private providers and subject to market forces can help keep connectivity price competitive for local governments.

Smart cities developing in emerging markets too

Various emerging markets around the world are also recognising the need for and potential of smart city projects. One of the world’s most ambitious schemes was announced recently in India, with Prime Minister Modi setting out a vision for 100 smart cities throughout the country by 2022. The number of people living in Indian cities will exceed 800 million by 2050, highlighting the need for India to find smart ways to reduce civic expenses and increase efficiency while improving the quality of life for all citizens. With that in mind India is looking into shared public and private network ownership models to deliver on connectivity needs.

Smart cities, smart utilities

One of the core duties of smart city projects is to deliver enhanced, more efficient heating and lighting services. Chattanooga in in Tennessee was one city that achieved this, ploughing over $300 million into a Fiber to the Home (FTTH) network driven by the desire to upgrade the city’s electricity grid and also offer broadband and telephone services to citizens. Here too the model was a shared public and private network, with $111 million of the project’s total cost being made up of federal grants. The municipal network in Chattanooga has now carved itself a 40 percent market share, even though its general rates are higher than those offered by private providers.

US projects have benefited from the US Federal Communications Commission (FCC) decision recently to back President Obama’s call for rules that support and assist community broadband projects and empower them to compete against private companies and providers.

Funding methods continuing to evolve

So smart cities will need to evaluate which funding and provision method is best for their needs as they take smart city projects forward. Do you go commercial, publicly-funded or does a mix of the two make more sense? Today there are even locations crowdfunding local broadband networks, taking the municipal model into the generation Y and mobile era and blending ‘traditional’ crowdfunding with civic interest. Interesting times for smart city initiatives and how they will deliver essential public services and connectivity in the future.