Technology – Municipal Fiber

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This is another installment of my Technology posts, geared towards those of us who are technology professionals and support users or clients.

We’ve been seeing and hearing a lot about municipal fiber, but what does it all mean ?

In order to understand municipal fiber, we need to understand the telecommunications industry. I can only speak towards the industry in Canada, but as I understand it, it is very similar in the USA. In Canada, telecommunications providers are essentially legalized monopolies. In the past, one provider in each area or jurisdiction was allowed the monopoly on telephone / telecommunications services. As such, these providers were able to build infrastructure, mostly with publically funded capital projects. Everything from the copper wires going to your home to the microwave links connecting the provider to other providers, was paid for largely with public tax dollars. In addition, providers are also guaranteed a rate of return, regardless of the cost of investment on their own part. In exchange, these providers were required to adhere to a certain standards level, ensuring their networks were reliable and safe. As time went on, new services emerged, like the internet. Internet is widely unregulated, although it is still delivered over the same medium as the regulated services that we, the taxpayers, largely paid for.
Fast forward a few years and now we’re in the 21st century. Unfortunately, many telecoms providers have not kept pace with the times, and their networks are outdated. Despite some withdrawing from governments in terms of not allowing competition, the fact is, these giant telecoms providers still own the majority of the infrastructure. So even if a competitor wanted to compete in, say, the ISP space, they will most likely at some point need to utilize the telecom provider’s infrastructure. As you can guess, this model isn’t exactly ideal for competition. So, how do we address it ?

Some jurisdictions are turning to municipal fiber projects. As our cities grew, and as the need for IT grew, municipalities began realizing that they could actually save costs by laying down their own fiber optic connections between all their buildings and infrastructure. Instead of paying the telecom for these connections on a recurring basis, they could pay for one massive capital rollout and then own the infrastructure as an asset. As deliberation on these plans went forward, it was realized that municipalities could expand these fiber optic links and actually lay fiber all around their cities. With that in place, they would be in a position to sell excess capacity to others, like new ISPs who wanted to move in and provide things like local internet service. Utilizing the municipalities’ fiber optic network, they would be able to bypass the telecom, at least on a local level.

What we’re seeing here is a fundamental shift in how we, the people, want to do business in the telecommunications space. We’re less accepting of legal telecom monopolies today than we were 30 years ago. As the landscape of the telecoms industry changes, we’re getting to a point where we expect choice, where we expect competition and where we expect quality service. Municipally owned fiber optic networks are just one part of how this landscape is changing, and I would venture to guess that we’ll be seeing a lot more changes in the not so distant future.

Author

Martin Lehner

Martin Lehner is an technology professional working for an IT services firm in Whitehorse, Yukon (Canada). He has been working in the technology field for over a decade. With a degree in Business Admin and numerous industry certifications, Martin leads a team of IT professionals that provide third party support for clients. Originally starting a company to offer web development services, Martin quickly realized that clients wanted the entire spectrum of technology services. When Martin is not at work (which is not often, since his company offers 24/7 support), he is busy at home spending time with his family.

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