Broadband grows at the grass-root level: Small towns are tackling the slow rollout of high-speed services by taking the initiative to install networks themselves - New Analysis: Mobile Commerce; Municipal Broadband

CommunicationsWeek International, April 1, 2002 by Michelle Donegan

The failure of operators to roll out broadband is driving municipalities to develop their own broadband networks and services--without the help of their local telephone or cable companies.

The villagers of Vindeln, in remote northern Sweden, are digging up their own roads to lay fiber so that every resident can have broadband access. About half of the villages in the municipality are already connected to a national fiber network, but the villagers want fiber to their homes, so they are volunteering their labor to lay the fiber themselves.

And these Swedish villagers are not alone in their quest for broadband. Municipal initiatives are cropping up more frequently in Europe and the United States, as businesses and residents become increasingly frustrated by the lack of broadband infrastructure and services.

"Communities are fed up with phone companies not delivering what they want," said Bernard Daines, chief executive and chief technology officer of Veradale, Washington-based World Wide Packets, an Ethernet company whose products support several municipal networks in the U.S.

These new community-owned municipal networks are rendering telecoms and cable companies irrelevant as they manage to connect citizens and local businesses to broadband at speeds of 10 Megabits per second or higher using fiber, which is typically higher than what copper or hybrid fiber/coax (HFC) can deliver.

Utilities will play a role

"The telcos don't want to do [broadband]. It will be the municipalities, power companies and other interested third parties," said Dames. World Wide Packets claims it is working with at least 13 local communities in the Netherlands, nine in Sweden, five in France and four in the United Kingdom.

In Grant County, Washington, the public utility district uses World Wide Packets's Gigabit Ethernet equipment to bring fiber to every home, business and farm" in the county. The public utility determines its buildout plan by getting petitions from the community. It will build out a fiber network when 35% of a neighborhood expresses interest in taking services. Residents can choose to take service from 10 Internet service providers, including one video provider and one local telephone provider.

In the Stockholm suburb of Sollentuna, a municipal power utility, Sollentuna Energi, has built a fiber network connecting half of the community's 24,000 individual homes. The original intent for building out fiber to homes was to do remote meter readings. But now, residents are able to have high-speed Internet access. There is an upfront cost of around 61,200 to 61,500 ($1,052-1,315) and then an ongoing 622 monthly fee for a 100-Mbps connection.

And in Italy, similar moves are under way. "It was clear that broadband wasn't going to be delivered by Telecom Italia," said Ian Limbach, technical program officer for Acantho, a consortium of publicly-owned utility companies, based in Bologna, Italy. "There is a strong sense of independence in this part of Italy. The local governments felt that if we're going to have broadband, we need to do it ourselves and not wait for someone else to do it."

Acantho is rolling out 10-Mbps and 100-Mbps connections to businesses and homes with Cisco's Ethernet technology over fiber. The company will be offering Internet Protocol telephony, Internet access, video and commercial television over fiber. So far, they have about 400 business customers connected.

"An element of what we do is geared to improving the life of our citizens [with broadband]," said Acantho's Limbach, explining that they set up free multimedia public kiosks that have local content and information.

"Citizens, business people and consumers are saying [broadband] is what we want," said Mark de Simone, vice president, EMFA, for technology solutions and corporate marketing at Cisco Systems Inc.

In Finland, Oulu Telecom is using Cisco's long-reach Ethernet-over-copper technology to deliver 15 Mbps connections to residents and hotels. The service provider is delivering Internet access, voice and video services, including digital TV broadcasting that can be accessed on a TV.

But will these isolated-but-interesting mega-broadband projects have a wider effect on the growth of the telecoms equipment market? Analysts say no, at least for the time being.

"They're like isolated pimples on the landscape of DSL for the foreseeable future," said Justin Neville-Rolfe, an analyst at the Yankee Group, based in London.

RELATED ARTICLE: Is Ethernet the future for the last mile?

Cisco, Riverstone, World Wide Packets and Ericsson and others are championing Ethernet technology for delivering high-speed local access. A new alliance was launched in January to promote the 802.3ah standard for local access Ethernet called the Ethernet in the first Mile Alliance. The group hopes a standard will be issued in the third quarter of next year, which will encompass Ethernet over fiber, digital subscriber lines, and passive optical networks, as well as operation, administration and maintenance.