The Fundamentals of Metropolitan Broadband

Metropolitan Broadband Explained: A Complex but Unique Opportunity

Times Have Changed

Both telecom infrastructure deployment and Internet access are poised for dramatic change based on recent advances in technology. Over decades, large telecom and cable companies built networks that provide service to individual homes and businesses, with a service business model that relies on narrow market competition and dense populations. They now offer a Triple Play of broadband Internet access, video, and voice telephony, often bundled as one service, in competition with each other.

Faced with a time-consuming and expensive roll out of new generation wired and wireless infrastructures and a pitched battle for customers with high marketing costs, these network giants are upgrading their networks by their own designs and on their own schedules. But among the large players, only Verizon with its FIOS offer is aggressively spending on fiber to the premises (FTTP). In the new field of metropolitan broadband (also called "municipal broadband"), a few pioneer municipalities leverage new technologies to deploy city-wide networks, generally with new smaller wireless Internet Service Providers or "WISPs."

Ironically, markets that are less attractive to the incumbents (outlying neighborhoods, new developments, cities and regions with lower income areas or smaller/less dense populations) present the best business opportunity of all for innovation and change. In these regions, governments, businesses, and increasingly, property owners and developers who take advantage of new wireless technologies and new business approaches gain independence from the giant telecom and cable companies. Starting with broadband access, they can move on to voice over IP (VOIP) and digital video, creating new services and revenue opportunities that both stimulate economies and raise the bar on competition.

Wireless Broadband Explained

What makes wireless broadband in under-served lower-tier markets such a special opportunity? First, standardization has brought equipment prices down to the point that Wi Fi chips are embedded in a variety of devices, and more and more network infrastructure equipment using Wi Fi (and soon, WiMAX) is coming on line. Second, the use of unlicensed spectrum for radio transmission removes the need for the large amounts of capital needed to win FCC spectrum auctions. Finally, over the past two years marquee projects in cities like Philadelphia and Houston have gained considerable press attention (both positive and negative), generating both interest and skepticism among municipalities and businesses.

Figure 1. This graphic from wireless network equipment pioneer Tropos Networks shows that Wi Fi Mesh (and WiMAX) not only make the Last Mile affordable, but also create brand new connectivity options.

The Internet is a disruptive network, but the high cost of wiring out to each home and business - what telecom companies call "the Last Mile" and consumer advocates now call "the First Mile" - as well as the limited number of network owners, has in turn hindered the extension of the networks, keeping market penetration lower and prices higher than they would otherwise be with more competitive alternatives. The result is stagnation and a reinforcing negative cycle: the market's too small, so the network's too sparse, which keeps the market too small.

Wi Fi, the same technology that lights up Hot Spots and provides wireless connectivity inside homes and businesses, has been reconfigured into multi-node mesh networks that enable citywide coverage, and a cost-effective Last Mile solution, as in the diagram above. Shoe box-size Wi Fi mesh units on street light poles (or rooftops) pass data signals to and fro, providing communication between end users and the Internet at ever faster speeds. Fiber links and/or point-to-multipoint wireless (soon, WiMAX) provide the "Middle Mile," connecting "gateway" wireless nodes to the Internet.

Unlike traditional wired networks, these new modular and scalable networks enable small targeted cost-effective projects to be deployed that open up the market to a new perspective: small downtown networks confer "digital" status for cities and chambers of commerce, while neighborhoods can band together to share a broadband connection to get the same benefits of scale that enterprises do. Mesh networks are "self-healing," routing around obstacles. Because they're "IP" networks, they're open to any digital application that works on the Internet. Governments gain cost reductions, new service capabilities and increased flexibility with these new networks. Smaller, more targeted network businesses can experiment with new business models to gain market share over traditional competitors. Local businesses can attract knowledge workers and customers to the downtown areas of smaller towns.

Benefits and Uses of Metropolitan & Community Networks

To date, the benefits of this new technology have been viewed through the prism of traditional telecommunications. Viewed from this conventional perspective as a substitute for cable or DSL broadband, or for T1 lines for businesses, the benefits of wireless broadband are confined to lower priced Internet access, generally the theme of mainstream media coverage. Of course, wireless broadband brings mobility to the table, and its bandwidth and price compare favorably to newer cellular technology such as "3G" data options. And because of its economy, wireless broadband can provide affordable service in "hard-to-serve" markets, where DSL and cable do not go. Moving beyond broadband access, to video and voice, the other legs of the Triple Play, wireless holds its own, with adequate bandwidth and Quality of Service (QOS) to provide voice over WLAN, and short video options, with video downloads and streaming media on the horizon.

Figure 2. A general purpose communications network enables connection to a variety of digital appliances & applications

But a host of other benefits await the metropolitan area or community that installs a wireless broadband network (see table above). To start, having broadband connectivity out in the air like an FM radio signal puts many solutions in reach that cannot be imagined without such a network. For instance, video surveillance options are much more affordable when hard-wiring is not required. Small cameras hooked to cheap digital storage transform the potential of video-based property security. Wireless sensor network options abound once a network is in place (e.g., radio frequency identification or "RFID"-tagged assets can be tracked using a Wi Fi mesh network). Consumer telephones, music and gaming devices now have Wi Fi capabilities. Mobile video and location-based services (LBS) are now possible using Wi Fi.

Perhaps the most significant benefit of these networks is regional economic development: not only do markets with competitive options for broadband enjoy lower prices for Internet access and greater network coverage, but just installing a wireless broadband network makes a statement to the local community and the rest of the world. By taking the first step with a downtown demonstration network, government, business, and community leaders send a signal about their vision for their metropolitan area or community to be on the cutting edge. When comparing regions, businesses and individuals increasingly place an emphasis on broadband connectivity options and long-term vision.

Prudent Steps into an Uncertain Future: How to Get Started

Whether you're in the public or private sector, one of the biggest challenges in making an investment is timing: when is it right to jump into a fast-moving stream (if ever)? In general, a conservative financial analysis shows a positive return on investment (ROI) in a reasonable amount of time, making the investment prudent. But in this case, it's difficult to know all the details impacting an ROI analysis. In light of these unknowns, government and business leaders tend to defer investments and seek more information.

Alternate low-risk paths involve regional collaboration and relatively small investments: an initial project planning and community mobilization consulting engagement can raise awareness and generate momentum; a "pilot" network can test a specific application; a "demonstration" network can be used to raise the level of awareness in a metropolitan region or community.

MetroNetIQ recommends getting started immediately with an initial assessment and awareness program or pilot and demonstration networks. Knowledge and awareness of these new networks is not widespread among the general public, so after getting oriented, leaders need to engage their communities in dialogue and share in their own learning process. Activity is newsworthy and will generate press coverage, promoting the economic development message at a fraction of the cost of a full deployment. Even a small network delivers initial economic development benefits to a specific area. Finally, small networks can be rapidly deployed (a month or less), for quick results and lessons.

MetroNetIQ recommends enhanced awareness and lowered risk with this process: 1) Initial consulting engagement to assess the environment, provide leadership briefings, and design a project plan; 2) Deployment of a small neighborhood network to showcase potential and enable experiential learning; and 3) Addition of applications of interest to the local community.

The benefits of such a deliberate, phased, prudent approach to metropolitan broadband networks are manifest: with success, small networks become the first phases of a larger network deployment; when problems are encountered, the networks serve as educational tools providing valuable real-world lessons.

What does this risk-management and education process look like? The chart below provides general information on networks, estimated expenses, and coverage.

Figure 3. Getting started with pilot or demonstration networks showcases potential, accelerates learning, and lowers risk

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