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Municipalities Need to Own Broadband Infrastructure as a Utility: Banker

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Summary

Chris Perlitz from Municipal Capital Markets Group argued at a Fiber Broadband Association event that eventually, internet service will become a utility, and municipalities should invest in networks now in preparation for this shift. AT&T and BlackRock have formed a joint venture, Gigapower LLC, to operate and deploy a fiber network to 1.5 million customers using a commercial open access platform. Bountiful, Utah and West Haven, Utah have taken steps to create city-owned fiber networks. The digital divide has been a focus for many companies and municipalities in order to provide high-speed connectivity to more Americans.

Q&As

What does Chris Perlitz of Municipal Capital Markets Group predict regarding the evolution of internet service into a utility?
Chris Perlitz of Municipal Capital Markets Group predicts that internet service will eventually evolve into a form of utility.

How can municipalities invest in networks in preparation for the “long game”?
Municipalities can invest in networks now in order to prepare for the “long game” by taking advantage of the cost of capital in building infrastructure, which is cheaper for municipalities than for private, for-profit service providers.

What are the benefits of the open access model for providing high-speed connectivity?
The benefits of the open access model for providing high-speed connectivity include cost effectiveness, environmental friendliness, and providing customers with the best experience.

What does AT&T’s joint venture with BlackRock involve?
AT&T’s joint venture with BlackRock involves investing several million dollars of capital into fiber builds across the country to create the United States’ largest commercial wholesale open access fiber network to bring high-speed connectivity to more Americans.

How could potentially capping the number of ISPs on open access networks solve price war problems?
Capping the number of ISPs on open access networks could solve price war problems by enabling the network operator to get the market share and investment an ISP needs to provide a good experience to the customer.

AI Comments

👍 The article provides an interesting perspective on the need for municipalities to own broadband infrastructure in the long run and how it can benefit the digital divide.

👎 The article fails to provide any details on the potential challenges municipalities may face while transitioning to a full utility.

AI Discussion

Me: It's about the need for municipalities to own broadband infrastructure because it's eventually going to become a utility. The article predicts that the transition may take decades, but municipalities should invest now in preparation for the "long game." It also talks about the lower cost of capital for municipalities compared to private, for-profit service providers, and how the government should motivate municipalities to enter the internet market.

Friend: That sounds really interesting. It makes sense that municipalities would need to invest now in order to be prepared for the future. But I'm wondering how municipalities are going to be able to afford it?

Me: The article mentions that capital costs are lower for municipalities than for private, for-profit service providers, and that municipalities don't need high margins to pay off investors. Non-profit organizations are also good recipients of grants, which could help to fund the infrastructure build-out.

Action items

Research open access models and their potential to limit the number of providers on a network.
Investigate the benefits of a utility-based broadband model for bridging the digital divide.
Reach out to local municipalities to explore the possibility of investing in broadband infrastructure in preparation for the “long game.”

Technical terms

Municipalities: A municipality is a local government unit, typically a city, town, or village.
Utility: A utility is a service, such as electricity, gas, or water, provided to the public by a company or organization.
Open Access Model: An open access model is a type of network architecture that allows multiple service providers to access the same infrastructure.
Digital Divide: The digital divide is the gap between those who have access to digital technology and those who do not.
Cost of Capital: The cost of capital is the cost of obtaining funds to finance a business or project.
Non-Profits: Non-profits are organizations that are not operated for the purpose of making a profit.
Grants: Grants are funds given by a government or other organization to support a specific project or activity.