A Dozen Roses, Kid Gloves or a Baseball Bat?

This morning, after writing this two-part post about Sascha Meinrath's recent essay on Municipal Wireless and Best Practices (here and here), I went back to his web site and left the following comment:

I second Sascha's comments in this essay and underscore the need to begin to follow some industry best practice, as he outlined in his five steps. In practice though, I'd temper some of the idealism in this essay with the very real problem of negative impacts on incumbent service providers - this is a big issue for sitting mayors and city council persons and a very real political risk.

My more detailed comments can be found on my website MetroNetIQ at www.metronetiq.com - keep up the good work, Sascha!

I felt compelled to elaborate on this comment because, you see, policy perspectives and best practices are all well and good - in a vacuum - but get out into a local political environment and try to pursue an objective in opposition to the local cable and/or telecom incumbent - and come back and tell me how that worked out for you.

I'm betting that you'll find that their senior management staff are registered lobbyists in Washington and the state capital, that their management staff sit on local boards and commissions, that they run the Chamber of Commerce, that they pay significant municipal franchise fees into the city coffers, that they routinely donate to local charities and sponsor local softball teams and kids' Little League. Let's face it folks, the incumbent ISPs are no dummies, and this is what they do for a living - they ARE the Status Quo, and the status quo is quite good now from where they sit, thank you very much.

They make a pretty profit on broadband, and they have no conceivable idea why that should change. In fact, they make so much money from broadband now, just over the last decade, that they've grown to like it and it's become such an important part of their portfolio, that it's even perceived as a threat to them if anything about the current situation were to change. When you're on top of the pile, "change" is not a popular word. "Change" means going down, "stasis" means staying on top.

So, they're here, they're an integral part of the community, and you ignore or offend them at your peril. Just ask the FCC...it's the same, from the federal level, to the state level, to the local level - really, when you think about it, managing political outcomes has perhaps become over time their key core competence ... forget managing networks. Though they are good at that, you have to admit.

And so I come back to a new way to look at incumbent ISPs. They're important citizens of the community. They deserve respect for what they've accomplished, and for the vital services they offer day-in and day-out. But they also need to be prodded to move ahead, because they are comfortable where they are, and their comfort can become an impediment for the greater good of the community. They look at change with a jaundiced eye - they don't trust it.

So I opt for the middle path: forget the Roses, don't even try, begging earns you no respect when approaching a powerful player - they will dismiss you and crush you...and forget the Baseball Bat - if you haven't noticed, they're richer than you, they're better connected than you, they have local market knowledge better than almost any, they have staff who can vote in a block to keep a politician in line ... and they're sitting on a pile of cash, so they can outspend you. So, forget the baseball bat folks.

So, what about the Kid Gloves option. I've become a recent advocate of Kid Gloves. Because this is a path of respect, and not just for the incumbent ISP, but also for the metropolitan broadband project promoter. Moving down this path should also help in establishing a valuable link between the powers of the present- the power of the status quo - and the power of the future - the power of change and innovation. Whether they realize it or not, those who hold the status quo need the power of change, because they often face strong internal resistance to change and innovation. And the world they operate in is changing, whether they admit it or not. The smarter ones know that already and will be receptive to a Kid Glove treatment that offers them a way to profit from change, a way to turn lemons into lemonade, a way to get ahead of the competition.

So, without further ado, here is something to make you and the incumbent ISP think twice about a metropolitan broadband project that may be coming to their area whether they like it or not.

Reasons an Incumbent ISP Should Support a Community Broadband Project

1. Wireless broadband is a new mobile broadband service that incumbents can purchase from the city or provider on a pay-as-you-go wholesale basis (in account bundles) and then resell to current and new subscribers for a profit, but without having to invest capital in the infrastructure needed to provide that service. They may choose a "take-your-broadband-with-you-when-you-leave-the-house" add-on service that incumbents can add to their service bundle. If they were able to buy the service wholesale for app. $5/mo and resell it for $8 - $10/mo, they'd have a clean path to good margins.
2. Wireless broadband is an opportunity to service traveling professionals through adhoc revenues.
3. Wireless broadband offers a fixed broadband service over a different network. Incumbents can resell such service to pursue potential subscribers who do not currently have broadband accounts (dial-up or no broadband at all or who are out of their service territory). As with the mobile broadband service offer, this is attractive because incumbents can avoid the capital investment of building a network that would be required to go after this new business. They will have an expanded service area.
4. Wireless broadband creates a test site for future mesh projects elsewhere in their coverage area. They can learn from it and perhaps gain new insights into their current operations.
5. Wireless broadband offers the incumbent lower operation costs: a local area network will provide new and cheaper broadband connectivity options for field service workers of the incumbent ISPs. Just like the city employees who need to access data while in the field, often requiring large bandwidth (e.g., GIS files), ISP field employees can use this service to be more effective and lower operation costs for the incumbents.
6. Wireless broadband offers the incumbent a site for piloting mobile products and services such as gaming, in home health, e learning, security, etc.
7. Wireless broadband creates an expanded market for selling wholesale bandwidth. As a city project focuses on broadband and new uses, the total bandwidth consumed in the community can be expected to increase considerably, which increases the market size for the incumbents. The wireless partnership will need to supply the wireless network with bandwidth "injection" and will need to either purchase that bandwidth from the incumbents or may be willing to bargain with the incumbents to trade wholesale "seats" for bandwidth.
8. Wireless broadband represents a marketing opportunity to every WiFi device used in in the coverage area.
9. Reinforcement of Brand. Each incumbent that chooses to offer service over the wireless broadband network could enjoy a branded SSID so that the consumer would see the service on their device screen as coming from the incumbent ISP.
10. Experience with a new business model and new skill sets for incumbent ISP workers. Incumbent ISPs will be able to train their staffs in new skills of working with wireless broadband and gain experience in a new market environment, which may translate into a competitive advantage in other markets in which the incumbents operate.

Let's face it, there could be more benefits to the smart incumbent than risks when a wireless broadband network comes to town. By seeing the glass as half full, by envisioning the opportunity to grow a larger pie, rather than losing slices to a competitor, an incumbent can turn a project in its territory into a major plus, if they so choose. This is, I hope, a glimpse into the future. I'm reminded of Green Eggs and Ham ... in fact, if they try it, incumbent ISPs may just find that there's lots to like about a community broadband project in "their" backyard.