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Game of Gigs” From Gigabit Testbeds to the “Game of Gigs” The Third Annual Report of Gig.U August 2014 2 TABLE OF CONTENTS Introduction: From Gigabit Test Beds to the “Game of Gigs” ................................................. 4 Community Initiated Projects .......................................................................................................... 8 A Regional Strategy to Attract Private Investment: North Carolina ............................................... 9 A Public-Private Partnership Playing to Local Strengths: Urbana-Champaign, IL .................. 10 A Non-profit Model: Cleveland, OH .......................................................................................................... 11 Partnering with a Utility: Gainesville, FL ............................................................................................... 11 Adopting Practices that Assist Local ISPs: East Lansing, MI ............................................................ 12 Creating A Pilot Innovation Zone: Blacksburg, VA ............................................................................. 13 Using Sewers to Lower Deployment Costs: Louisville, KY ............................................................... 13 Spectrum-Based Solution: Morgantown, West Virginia ................................................................... 14 Other Efforts .................................................................................................................................................... 15 ISP Initiated Efforts ........................................................................................................................... 16 Google Fiber ..................................................................................................................................................... 16 AT&T .................................................................................................................................................................. 17 CenturyLink ..................................................................................................................................................... 17 C Spire ................................................................................................................................................................ 17 Brighthouse Cable ......................................................................................................................................... 17 Cox ...................................................................................................................................................................... 18 Time Warner Cable ....................................................................................................................................... 18 Community Initiated and ISP Initiated Efforts Flowing Together to Create the “Game of Gigs” ................................................................................................................................................... 20 Lessons learned ................................................................................................................................. 20 Improving a Community’s Fiber Readiness .......................................................................................... 22 Lessons for All Communities ...................................................................................................................... 25 Lessons from Trial and Error .................................................................................................................... 28 Potential Threats to Success: No Popping Champagne, Yet ................................................ 30 Change in Google Interest. .......................................................................................................................... 30 Change in Competitive Opportunity Due to Mergers ......................................................................... 30 Change in Municipal Interest ..................................................................................................................... 31 The Upcoming Metropolitan Broadband Revolution: The End of the Beginning ........ 32 3 INTRODUCTION: FROM GIGABIT TEST BEDS TO THE “GAME OF GIGS” “Come Watson, the game is afoot.” - Sherlock Holmes in The Abbey Grange Gig.U began three years ago with three-dozen research university communities coming together to accelerate the deployment of next-generation broadband networks to enhance educational and economic development. We believed that eliminating bandwidth as a constraint to innovation would lead to economic and social progress for our communities and accelerate the discoveries university communities create for the world. We also believed market forces by themselves would not deliver such networks on a timely basis and therefore, we ourselves had to innovate in how we approached network deployments. We saw our task as creating test beds; what we were attempting to do—organize communities to stimulate private investment to upgrade or overbuild existing networks—had few precedents. This required openness to different models, some of which would hopefully succeed and some of which would likely fail. Still, taken together, those efforts would draw a map that all communities could use to create the next wireline upgrade and achieve bandwidth abundance. “The efforts of Gig.U, municipal As discussed in this report, we have made governments and Internet Service enormous progress. Through a combination of Providers to upgrade America's efforts, scores of American communities, broadband networks is great news. In this economy, speed including over a dozen Gig.U communities, are matters, and these efforts are laying now deeply engaged in deploying of such the foundation for economic growth networks. Many of these, like our own efforts, and good jobs for decades to come.” were initiated by communities. Now, however, in Larry Cohen, President of the a radical change in the past 12 months, multiple Communications Workers of America service providers are initiating their own efforts. When we started the fundamental strategy of incumbent Internet Service Providers was harvesting past investments in bandwidth-constrained networks. Now, numerous providers, including some incumbents, are developing strategies to deploy networks capable of providing abundant bandwidth, and challenging others to enter a new, growth-oriented “Game of Gigs”. The interplay between the provider initiated and the community-initiated efforts provides both enormous momentum and a variety of choices; precisely what we were hoping for when we started. It would be a mistake, however, to believe “It’s great to see so many, including Gig.U, step up and help communities connect at that we have passed the inflection point at the speed of light. America has always lead which the accelerated progress towards a in next generation innovations and these critical mass of communities with world broadband upgrades, facilitated by both community leaders and private sector leading broadband networks in the United providers, will ensure that future States is inevitable and irreversible. History generations can do the same.” is littered with efforts in which initial Kevin Martin, Former FCC Chairman and progress was reversed due to a failure to Member of the Board of Directors of Corning persevere. Further, the market forces that Inc. favor allocating scarce bandwidth on legacy networks instead of deploying abundant bandwidth on new networks are still strong, and in some ways, gaining strength. We think the years 2015 and 2016 will prove decisive in achieving our goal, but only if we, and others, spend this year with our foot on the accelerator. This is the first of two reports we will release Previous Gig.U Reports: over the next several months. In this report, the third annual report on Gig.U, we discuss the • “Upgrading America: The One Year Anniversary of latest news regarding Gig.U community-initiated Gig.U” July 2012 deployments, progress made and lessons learned over those last three years. In the next report we • “Upgrading America: The Semi-Annual Report of discuss how the economic and political Gig.U” February 2013 environment for investment in such networks has changed, and how those changes, quite • “Gig.U Y2” July 2013 positive in terms of the mission, suggest that • “A Gigabit Garden Begins to Gig.U evolve into a different kind of initiative to Grow: Lessons from the best serve that mission in light of those changes. First Planting” December 2013 What ties the two reports together is how the Gig.U effort, in combination with other efforts, has set the stage for communities to take advantage of a new dynamic in market, one that reminds us in some ways, but not others, of the HBO series Game of Thrones. In the fictional Game of Thrones, the royal families fight for supremacy over the Seven Kingdoms, with the lives of the rest of the population either unchanged or made worse through the collateral damage caused by war. In the real life “Game of Gigs”, powerful companies, and in some cases smaller upstarts, fight for supremacy in broadband services. In both versions, the winner of game is uncertain, but in a way that is completely the 5 opposite from its fictional counterpart, our “Game of Gigs” improves life for the rest of the population; indeed, as one group documented, the entry of a new Gigabit provider in a community has proven to have an “astounding”
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