This discusses the rising cost of telecom services in households. The article demonstrates that there is plenty of money for broadband out there, but it is hidden because it is not aggregated in a way that benefits residents and businesses. Lack of competition is one of the main issues that keeps costs high.
A single shared network that is designed to allow service providers to inexpensively deliver a wide variety of services offers more choice and lowers the cost of services.

GovPro quotes me in a short article about the challenges faced by communities who want to take control of their economic future.

I was in Danville, Virginia last week, and was reminded of the changes that fiber is bringing to that community, which has experienced some of the highest unemployment in the state over the last decade. The White Mill building had been considered a white elephant for years--once a showpiece textile manufacturing plant--but closed for years and a visible sign of Danville's proud past and uncertain future. The White Mill building is being converted into a massive commercial data center with 500,000 square feet of server space.

What I saw last week is still a work in progress, but what a difference a few months make. The formerly forlorn industrial site has been cleaned up, the interior renovations are well under way, and the property values of empty downtown storefronts has probably been quietly soaring. The White Mill building is walking distance from Danville's Main Street, and the 400 high tech jobs the project is bringing will bring Main Street back to life, as those workers will be getting coffee in the mornings, buying lunch every day, doing a little shopping, and meeting after work for a beverage.

What was it that brought a data center to Danville. It's simple, and takes just two words.

Community fiber.

Not a promise of fiber if a company shows up, not a plan for fiber, not a feasibility study, but fiber--in the ground and on poles, owned by the community, ready to use, and open access. Danville bet big back in 2006 when it made the decision to invest scarce community resources on open fiber, but now it's looking like one of the best decisions the city ever made.

Disclosure: Design Nine has been advising the City since 2006 on broadband.

There's a slogan for you: U.S. Broadband--We're almost as good as Latvia! Kind of rolls right off the tongue. Here is a link to a list of the "top 10" broadband countries, and the U.S. is nowhere to be found. Grim news indeed for the country.

The Wired Road community broadband network in southwest Virginia has added Nationsline as a service provider, and is starting a rural fiber to the home expansion project this spring. Grant, Virginia residents will get 100 megabit fiber connections and a community computing center in the historic Grange Hall in the small town.

The Wired Road is an open access, open services, Layer 3 network with three retail service providers and two wholesale providers with a mountainous service area of more than 1,000 square miles. The Wired Road is part of The Crooked Road country music territory, and Galax, in the heart of the network, is home to the world famous Fiddler's Convention. Downtown Galax has fiber connections to more than sixty buildings. Design Nine designed and built The Wired Road network.

This article suggests that pay for play is doomed, because no one (according to the data) wants to pay for content.

The problem I see is not paying for content, but pricing. Newspapers and magazines have not adjusted their cost/pricing models to adequately reflect the new distribution costs, which are effectively zero. The Apple revenue share model that is being delivered with the iPad is going to fix this, as it provides a worldwide distribution network for news and magazine startups.

For example, which is better? A million subscribers paying $5/year for an iPad delivered monthly magazine, or 50,000 subscribers paying $20/year? I think it is the former, because the barrier to making the next sale is 75% lower. I'm pretty sure I could produce a pretty nice magazine with a lot of original content on an editorial and writing budget of $5 million/year. Online music took off when Apple changed the pricing structure by creating a low cost distribution system that let the little guys compete with the big guys. The same is about to happen with print, but the big winners will be start-ups.

Community perspective: Guess what? Magazines delivering their content via the Apple Store don't have to be produced in New York any more. Writers and editors can live anywhere in the country with good broadband on Main Street and good broadband at home. But work from home writers, editors, and graphic artists will want business class services, with symmetric bandwidth. That means DSL and cable modem services won't draw these kinds of knowledge workers to your community. Open access fiber, designed right, will attract them.

FastMac is advertising something I think almost everyone wants. It is a duplex AC wall socket with two standard 110 volt sockets, but it also has two USB ports. That's right, no more wall chargers cluttering things up. You can plug your USB charging cables right into the wall. Best part--these things are on sale for a limited time (note that these are pre-orders, so you may have to wait to get them).

Here is an interesting story. Apparently, a Microsoft exec has proposed that all bloggers need to have a license before they can write on the Web. And Time magazine and the New York Times think this would just be spiffy. This is not likely to ever happen, but the fact that companies like Microsoft and old media think it is a great idea suggest that there is still much resistance to the changes the Internet has brought.

The Intertubes have been buzzing for the past couple of days with what is actually a very modest announcement from Google that the company wants to play around with community fiber. Google wants to find out what people do when they have a fast connection, and what kinds of services they might be able to give away or sell if everyone has those kinds of connections.

Based on the RFP application Google has released, I am guessing that they will do this in only two or three communities, meaning the odds of being selected are very long. What seems a bit odd is that there are plenty of community fiber projects in the country Google could partner with to do the very same thing at much less expense. But Google probably wants to be able to track activity at a finer level of granularity than they would be able to do on a public network. One benefit I already see is that just the announcement by Google has created some healthy interest in open access networks.

Want to read more about why open access works? Download my paper.

In a shocking discovery, music publishers have found that the law of supply and demand works. Apple loosened up pricing rules for music on the iTunes Store last year. Record companies immediately raised prices. Buyers immediately bought less music. The record companies are shocked, shocked that buyers don't want to pay more. What could have gone wrong? Higher prices signal less supply, and in turn, demand tends to drop. Record companies might want to send a few of their high paid execs back to high school to retake an economics class.

The City of Portland, Oregon's municipal WiFi experiment is coming to an end. It was a public/private partnership between the City and a firm called MetroFi, which reportedly spent between $2 million and $3 million to build the network. But it never worked well, and residents reported it did not work well indoors. MetroFi went into bankruptcy in 2008, and the hundreds of antennas that were mounted on City property are now being removed.

It is yet another reminder that fiber always beats wireless. Wireless is expensive and has limited capacity, and in as Philadelphia found out in a similar project a few years back, wireless vendors always oversell the technical capacity of their products. In cities with lots of tall buildings filled with steel reinforcing bars, wireless signals don't travel very far.

Wireless has a role to play for mobile access and in rural areas where it will take a while to get fiber to every premise, but eventually, we will all have a fiber connection. As Portland has found out, wireless has a hard time competing with a wired connection.

Apple, as the company has in the past, has begun to upset, er, apple carts. With the announcement of the iPad, Apple also announced a book section in the iTunes Store, with a business model that is exactly the same as the hugely successful music model they use. For both books and music, Apple will collect 30% of the sales price of the item, and the publisher/seller collects 70%. The seller of the item sets the actual price. This is called the "agency model."

Whose apple cart is upset? Well, it is Amazon, who has insisted on setting prices for publishers that sell books for the Amazon Kindle. This has irritated publishers, who think that popular and fast selling items ought to be priced differently, and conversely, slow moving items should be able to be reduced in price. It is a simple, time tested model that helps keep supply and demand in balance.

Amazon got away with it for a while because they had the only popular ebook reader. But now that Apple has announced the iPad, publishers are likely to abandon the inflexible Amazon. Look for the Kindle to appear in supermarkets in a few months, mixed in with those remainder books for $4.99.

What does this have to do with community and municipal broadband? Well-designed open access, open services networks let providers set prices, and simply take a revenue share that helps pay for network operational costs. This approach encourages innovation and competition among providers. Insisting on fixed prices (the Amazon model) drives service and content providers away.

A coalition of New Hampshire towns and other interested parties are encouraging state legislators to give New Hampshire towns and cities the right to bond for telecommunications infrastructure. Unsurprisingly, the incumbent providers are not excited about the notion, even though largely rural New Hampshire has tens of thousands of residents still on dial-up and one of the providers is having severe financial difficulties. The towns see it as an issue of economic survival. Who wants to live in a rural community, no matter how great the quality of life, if there is no broadband or only "little" broadband?

The towns have correctly distinguished between "little" broadband (DSL, cable, wireless) and "big" broadband. They want big broadband, because that represents the future of economic development and the ability of these towns to retain existing businesses and to attract new ones. Here is an exquisite irony: a fiber cable manufacturer in rural New Hampshire can't get the bandwidth they need to do what they want to do to manage the plant properly.

In exchange for bonding authority, the towns have wisely agreed to only build open access community broadband networks, in which all services for businesses and residents would be sold by private sector providers. So in rural parts of the state where the incumbents are saying it is too expensive to build a private network, the towns are saying, "Okay, we get it. We will build a shared network and let you, Mr. Incumbent, use it to reach customers you can't afford to build to on your own."

Why would the incumbents be opposed to that? It opens them up to competition.

The iPad continues to generate enormous discussion on the Intertubes; while I have seen a lot of commentary about how it might be used in higher ed, I have seen very little about how it might be used by kids. The most obvious higher ed connection is as a replacement for textbooks, which are murderously expensive. A college student with an iPad can carry around an entire library of textbooks and should be able to save a lot of money at the same time. Textbook costs ought to decline over time, not to the $15 dollar level, but perhaps by 50% from $60 to $30 (and many technical textbooks are pushing $100 or more).

But the iPad strikes me as the perfect computer for middle school and high school. Smaller, lighter, no moving parts, much less to go wrong, and with plenty of horsepower to handle routine school assignments, which are mostly typing essays and papers. And you could do a lot of interesting basic math with a program like Apple's Numbers spreadsheet application. Apple is selling its three productivity programs for $9.99 each (word processsing, spreadsheet, presentations), about a third of the price of the cost of them for a laptop. With the dock and keyboard and wireless printing to a shared printer, kids have everything they need for school at much less than you might spend for a bare bones Apple laptop. I know there are very inexpensive Windows laptops available, but they still come with all the drawbacks of a laptop--heavy, moving parts, more susceptible to viruses, expensive software, etc.

Like the iPod, the iPad is going to change the way we do a lot of things. And like the iPod, it will create a lot of new business opportunities.

I receive a lot of inquiries asking for help understanding open access. The broadband stimulus funding has raised awareness of this business model, and I have written a short paper explaining how it works and why. The PDF is attached to this article, or you can visit the Design Nine Web site to download it.

A short, good analysis of six industries that Apple's tablet computer could change. Apple is expected to roll out the device next week.

Some applicants for first round broadband stimulus funds report they have received their rejection letters today (1/25/2010). It does not appear that the letters provide any information about why an application was rejected, other than to note that it did not score high enough.

USDA/RUS has announced an additional $313 million on stimulus funds, going mostly to rural telephone company projects.

The Intelligent Community Forum announced their Smart Seven communities for 2010 yesterday.

One of Design Nine's projects, nDanville, was one of the ICF's Smart 21 communities this year, and got a mention for its success in attracting new jobs by building community fiber.

A story in the Financial Times (registration may be required) suggests investments in broadband are peaking. The article is a little misleading, because it suggests that this is a sign of "maturation." Maybe. Maybe not.

Broadband investments are peaking because cable and telephone companies have spent a lot over the past decade upgrading their antiquated copper-based infrastructure, and in their view, there is not a lot left to do. Yes, fiber to the home deployments continue to grow, but large parts of the U.S. have been redlined by the incumbents as "too expensive" for fiber. So most of this investment has been focused on what the FCC calls "little broadband," not "big broadband." Big broadband requires fiber.

Small and medium-sized businesses stuck on DSL are already calling it "tomorrow's dial up" (an exact quote from an angry business person in West Virginia). To attract jobs and businesses, communities will have to make basic broadband infrastructure investments in "big broadband."