In Washington state, the Grant County Public Utilities Department, another FTTH pioneer, still is operating a wholesale-only network in accordance with state law there, although it came under criticism and went through a management change over the $400 million price tag of that network. Partially in response to that criticism, the Grant County PUD halted its network expansion in 2004, after four years of construction had connected about 11,000 homes — or one-third of the anticipated homes — said Sarah Morford, spokeswoman for PUD. After extensive review and exploration of other technology options, the Grant County PUD commissioners voted in March to press forward, citing public support for its fiber network. Over the next five years, Grant County plans to expand the network to reach 80% of residents and 95% of businesses, or about 3000 homes and business per year.

Many Models

Calling Grant County the exception to the wholesale rule isn't really accurate, however, because there really aren't rules associated with municipal broadband, Baller said.

“There's no one thing called municipal broadband,” he said. “It's a lot of different things that have different trajectories and different histories. We did see a little lull in movement into the fiber arena, but there is a lot more interest now.

PacketFront's Scott agreed. “There are more choices today,” he said. “A municipality can look for public/private partnerships, third-party operators and service providers to come and offer services.”

One of the popular models is for municipally owned utility companies — many of which were created to bring electricity to towns in which large incumbent utility companies weren't interested — to build FTTH networks that privately owned incumbents can't cost-justify.

In Chattanooga, Tenn., for instance, the municipally owned utility, EPB, is economically justifying its fiber build on the basis of creating a “smart grid” that will enable the company to reduce energy consumption and lower the cost of power it buys from the Tennessee Valley Authority. The plan is to reach 80% of the 167,000 homes in the 600-square-mile service area in the first three years and then reach more rural homes in the last two years of the five-year buildout.