This week Governor Cuomo of New York introduced a plan to provide $500 of matching money to ISPs that will spend money on high speed access in underserved and undeserved areas. In many ways, this is reminicent of the Broadband Stimulus Fund.
The challenge with these funds is that they tend not to work in the areas served by the larger Telephone Companies. In New York, that would be Verizon. Verizon is well known for having rolled out their FiOS product. As you may be aware, AFC won the first part of that business for BPON so I am very familiar with that roll-out. Inside of New York, little has been done in the Upstate areas. Verizon has announced that it is not expanding FiOS beyond where it has been rolled out. The question is: Will this announcement from New York State push Verizon to roll out FiOS more broadly.
Up to this point, these incentives have not worked with the large companies. They generally have some number of strings on them that require the company to report on. The large company does not want to do so. There are both good and bad reasons for that. One of the good reasons is the definitions around unserved and underserved. Most definitions use voting districts or zip codes to define them. The problem is that these systems are not the same as the way the phone or cable networks are constructed. So, a build at a specific Central Office (Telephone Switching Center) might contain part of those political definitions. It might take 3 or 4 builds to cover 100% of a Zip Code even though 75% of the Zip Code is served by a single Central Office. If the rules require 100% build out of a Zip Code, you can see where the costs skyrocket.
The bad reasons are obvious. The large ISPs do not want to release detailed information about their networks to governments. On top of that, there are often requirements to meet construction deadlines with penalties. Large companies don’t like to work that way.
In some cases, other companies might come in and use these Grants to build in areas that they don’t serve today. This has happened but it is certainly not something that any given community can depend upon. There has also been pressure on municipal networks as the large ISPs have worked hard to keep cities from building their own networks.
So, what is the solution? There is one obvious solution which is to have Broadband Access become a Universal Servie like a phone line. Today, if you put in a house they MUST put a phone line out to your house. You don’t have to use it, but they have to make it available. The Large ISPs will fight that tooth and nail. So, we need to see if there is another way. I will propose a few thoughts next week.
Until then, have a great weekend!
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