In relay races your anchor runners are quite similar to anchor tenants on broadband networks. The ones in the anchor position are the strongest and most capable of carrying the team. If the others slip or get behind, good anchor runners can make up the difference so everyone wins. So it is with broadband.
When word hit the press that the Bill and Melinda Gates Foundation gave the FCC some numbers for what it would cost to provide fiber to all of the institutions in the U.S.--schools, hospitals, libraries-- I was elated. Finally, it seemed some folks with clout were forcing the spotlight on what should be a crucial element of your broadband network. These institutions have everything to do with the network's financial sustainability.
Let me put things into context.
The Foundation estimates it would cost $5 billion to $10 billion to install fiber at 80 percent of the nation's 123,000 institutions that currently don't have broadband capability. While initial news stories focused on the money, my brain immediately went to strategy. If the latter's wrong, even all the money in the Gates' petty cash fund can't save you.
The premise behind the Foundation's report--wire these institutions first, make them the anchor tenants on your network and great things will happen--in my view is a great strategic approach to reap broadband's promised benefits. It should be the core for our national strategy plan. In one fell swoop you resolve three critical issues: financially sustaining the network, fostering economic development and generating widespread broadband adoption.
The business of broadband is not about individuals
Ever since 2005 when I wrote my book on municipal broadband networks, I've been adamant that the flaw in many people's strategic thinking is that these networks are about individuals. At an emotional and public policy level, yes, you definitely want as many people accessing the Net as possible. But from a business perspective, you can't do jack for the underserved unless and until you resolve the question, where does the money come from to keep a network operational? The bulk of it isn't coming from $50/month subscribers.
The validity of this statement should be clear since the primary reason incumbents are not covering underserved areas is that there aren't enough individuals (or individuals who can afford it) to sustain a network. Unfortunately, this leads some people to assume that individuals are the key to financial salvation. If the Feds underwrite most of the buildout expenses, fund broadband adoption programs and computer centers, we'll have a successful network because we won't need as many subscribers to break even on OpEx. Continued...