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Municipalities Need to Own Broadband Infrastructure as a Utility: Banker

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Summary

Chris Perlitz of Municipal Capital Markets Group stated at a Fiber Broadband Association event that eventually, internet service will evolve into 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. AT&T has already invested millions of dollars to build the most expansive fiber network in America. Bountiful, Utah has also approved a contract with UTOPIA Fiber to build a city-owned fiber network, and West Haven, Utah has also announced its contract with UTOPIA Fiber for a city-wide network. The digital divide has been a focus for many companies and municipalities in order to provide high-speed connectivity for 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 how municipalities can invest in broadband infrastructure as a utility in the long run.

👎 The article fails to provide any details on the challenges that municipalities could 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: Wow, that's really interesting. It sounds like a great idea, but I wonder how municipalities are going to be able to afford it?

Me: Well, 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. Also, non-profits are 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.
Broadband Infrastructure: Broadband infrastructure is the physical network of cables, wires, and other components that are used to provide high-speed internet access.
Internet Service Providers (ISPs): An Internet Service Provider (ISP) is a company that provides access to the Internet.
Artificial Intelligence (AI): Artificial Intelligence (AI) is the simulation of human intelligence processes by machines, especially computer systems.
Machine Learning: Machine learning is a type of artificial intelligence that enables computers to learn from data without being explicitly programmed.
Utility: A utility is a service, such as electricity, gas, or water, provided to the public by a company or organization.
Capital: Capital is money or other assets owned or used in business.
Nonprofits: A nonprofit is an organization that is organized and operated for a charitable, educational, religious, or other purpose that does not involve the generation of a profit.
Grants: A grant is a sum of money given by a government or other organization to fund a specific project or activity.
Open Access: Open access is a type of network architecture in which the infrastructure is owned by one entity, which can be a network operator or a municipality or other form of cooperative governance, and leased to internet service providers.
Take Rate: The take rate is the percentage of customers who take up a service or product offered by a company.
Price War: A price war is a situation in which two or more companies compete aggressively on price in order to gain market share.
Vetting Process: A vetting process is a series of steps taken to evaluate the qualifications of a person or organization.
Gold Standard: The gold standard is a system in which a country's currency is backed by gold.
Price Gouging: Price gouging is the practice of charging an unreasonably high price for a product or service.
Affordability Assistance: Affordability assistance is financial aid or other forms of assistance that are provided to help people pay for goods or services.
Request for Proposals (RFP): A request for proposals (RFP) is a document that an organization issues to solicit bids from potential vendors for a desired product or service.
Joint Venture: A joint venture is a business arrangement in which two or more parties agree to pool their resources for the