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Last week's Louisiana State Supreme Court decision that ended the legal challenge to the planned Lafayette fiber-to-the-home network put a punctuation mark on a struggle that became emblematic of the challenges municipal networks face.
It will be interesting to see if, in fact, we might enter a new era of cooperation between public and private entities in the construction of fiber access networks. We have already seen this kind of cooperation where wireless networks are concerned. AT&T, which now owns BellSouth, the company that put up the greatest resistance to the Lafayette network, is building Wi-Fi networks for multiple cities and promising to expand that business.
Fiber networks pose a different kind of threat to incumbents, however. An FTTH network, in particular, is a future-proof means for service providers to capture and retain customers with high-value services -- that's why Verizon is pouring billions into its FiOS construction. If other municipalities catch the same fiber fever that has sustained Lafayette's efforts, and figure out legal means of using public money or publicly backed bonds to fund the effort, incumbents could find themselves on the sidelines.
Or, they could find themselves with new markets for the content they are also pouring millions of dollars into creating. As independent telcos have discovered, getting your hands on the content your customers expect isn't always that easy. Many municipalities are more interested in stimulating economic development and attracting businesses than in becoming service providers. Both AT&T and Verizon are assembling packages that can compete with the veteran cable players -- why wouldn't municipal networks represent a new market and source of revenue for that content?
This kind of cooperation would require a shift in thinking among the major service providers, but it shouldn't be that great a stretch. Ongoing squabbles with municipalities will do nothing to enhance the image or the chance to get a video franchise, but willingness to cooperate might open new doors.
E-mail me at Cwilson3@telephonyonline.com.
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