1. Upgrading Communities
Blair Levin
Executive Director, Gig.U
Presentation to City Council
College Station, TX
January 24, 2012

2. Today’s Topic
Economic
Opportunity
Increased Increased
computing data
power Increased storage
bandwidth

3. Today’s Question
University of Chicago, South Side to
get gigabit-speed fiber network GRU, UF bring ultrahigh-speed
broadband to Innovation Square
MSU, Lansing on track for high speed
internet Silicon Valley, Seattle… Chattanooga?
Tennessee’s ‘Gig City’ Woos Geeks
State Hopes to Bring Super-Speed
Internet to South Side Cleveland Neighborhoods Testing
Ultra High-Speed Broadband in
University Study
Ultra-High-Speed Internet Coming to
Communities Near UMaine
…and College Station?

4. An unlikely story

5. A recent history lesson
29 to 24

6. A team that defies logic… and sometimes athleticism

7. Economic Logic:
Teams should only reside in big television markets
$

8. Green Bay ranks 152nd by population
Metropolitan Statistical Area Population (2010)
New York Metropolitan Area, NY 18,897,109
Dallas-Fort Worth, TX 6,371,773
Boston Metro Area, MA 4,552,402
Seattle, WA 3,439,809
Kingsport-Bristol, TN 309,544
Green Bay, WI 306,241
Roanoke, VA 308,707
Greeley, CO 252,825
Columbia, MO 172,786
Billings, MT 158,050
Carson City, NV 55,274

9. Green Bay Packers, age 94

10. Why did Green Bay keep their team when others lost
theirs?

11. NFL franchise owners generally “rent seekers,” without
incentives to serve long term community interest
Ownership of Green Bay Packers: Other NFL owners
Community Based, Profit-seeking Individual, Rent-seeking
“Non-Profit”
VS

12. Market size has very little impact on NFL teams’
revenue base, compared with MLB
• ~80% of revenues • <25% of revenues
divided evenly divided evenly
amongst 32 teams amongst 30 teams
• leads to revenue of • revenues could and
around $150 million do vary considerably
each before a game is between teams
played

13. What do Green Bay’s advantages have to do with Big
Bandwidth?
A financial
Incentives to serve
structure that
The early adopter long-run
allows the small to
advantage community
compete with the
interests
large

14. Marc Andreessen,
August 20, 2011 in the Wall Street Journal
“Six decades into the computer revolution,
four decades since the invention of the microprocessor,
and two decades into the rise of the modern Internet,
all of the technology required to
transform industries through software
finally works and can be widely
delivered at global scale.”

15. We may underestimate GDP by 30 percent because of
difficulties in measuring data-driven economy
Source: Bureau of Economic Analysis, Progressive Policy Institute (data as of 8/10/12)

16. Internet speeds have not kept up with computing and
storage growth
Computing
Storage
Dial up Broadband
Internet Speed

17. Clinton at Dell World: US needs better broadband

18. Clinton at Dell World: US needs better broadband
"You want to help small businesses,
you want to help your entrepreneurs,
you want to make it possible for people living in remote towns and upstate
New York and West Texas to be part of the global economy?
Then stop pretending we can do it with
South Korea having average download speeds
of four times ours."

19. Most of the fastest connections in the world are in
Asia
% Broadband
Country Connections Above 10
Mbps
South Korea 52%
Japan 38
Hong Kong 27
Latvia 26
Switzerland 22
Netherlands 22
United States 18
Denmark 17
Sweden 16
Finland 16
Source: Akamai, State of the Internet Q212

20. The US lags other countries in bandwidth
consumption and is projected to fall farther behind

21. Instead of planning upgrades, providers talk of
bandwidth caps and charging for “overages”

22. Don’t give up on America just yet
Gigabit Ready Initiative seeks to broaden the
reach of higher-speed broadband in Lansing
area
Partnership to Bring Ultrahigh-Speed Internet
to Six Communities
MSU, Lansing on track for high Old Town, Orono residents and businesses
speed internet to receive ‘super-high-speed’ Internet

23. How fast is the Chattanooga Choo-Choo?
“…We’ve gone from being a
slowly declining and
deflating urban balloon,
to one of the
fastest-growing cities in
Tennessee…”
Chattanooga Mayor Ron Littlefield

24. 1,100 communities applied for Google Fiber,
including College Station

25. Incumbents seem less than interested in upgrades
Verizon has stopped
the FiOS build Verizon Deal With Cable TV Could be Game-Changer…
December 3, 2011
AT&T is looking to “…We will do that by looking at opportunities to either
sell wireline assets divest or restructure low preforming and nonstrategic
assets.”
AT&T Chairman and CEO Randall Stephenson
January 26, 2012
Time Warner says no
one needs a gig
[F]iber “ends up being more about publicity and bragging.”
Time Warner Cable CEO Glenn Britt
December 3, 2012

26. National Broadband Plan recommended the nation
needed a critical mass of ultra high-speed test beds

27. Strategic Bandwidth Advantage
Fast and cheap enough bandwidth to the right places to drive
bandwidth-based innovation growth

28. Historically, new inputs drive economic growth
Steam Engines Electricity Computing, data
storage
Canals, then trains Cars, trucks, planes Digital communications
1800s 1900s 2000s

29. The global economy is moving from atoms to bits
Asset Heavy Asset Light
Purchasing
physical Spotify, Pandora, iTunes,
copies of Songza
books, music,
film Buy Albums
Going to the and DVDs in Netflix, Hulu, YouTube
grocery store, stores
yard work
Zearly, Taskrabbit
Dedicated Airbnb, Onefinestay,
hotel CouchSurfing
buildings
Goods, services, information are increasingly delivered over
bandwidth and not delivered by trucks.

30. We’re going to need a bigger boat

31. Ultra high-definition televisions await content and
speeds to transmit that content
CES 2013: Sharp shows off super-sharp 8K
TV, waits for content
By JOHN HEALEY
January 10, 2013

32. Ultra high-speed data transfer can help unlock a cure
for cancers
DNA Sequencing Caught in a Deluge of
Data
By ANDREW POLLACK
November 30, 2011

33. Effective learning platforms need bigger pipes to
perform
BILL GATES: Why ‘game-based learning’ is
the future of education
July 17, 2012

34. Big Data is unlocking a new economic reality
How Big Data Became So Big
By STEVE LOHR
August 11, 2012
The Age of Big Data
By STEVE LOHR
February 11, 2012
Big Data on Campus
By MARC PARRY
July 18, 2012

35. The returns for the investor do not justify the
investment
For the investor, the equation usually looks like this:
Costs Benefits
C + O > (1-r)R + SB + (-CL)
C – Capital Expenditures
O– Operating Expenditures
r – Risk
R- Revenues
SB- System Benefits
(Benefits that drive increased revenues outside the communities where
the new or incremental investments are made.)
CL- Losses due to competition
35

36. The path forward: change the math
C + O < (1-r)R + SB + (-CL)
But how do we do that?
36

37. Historically, investments are made when policy alters
equation
Sector Competitive
Ecosystem change CapEx OpEx Risk Revenue
/opportunity Losses
Telco Grant of monopoly Lower Raise
Cable Grant of monopoly,
pole attachment law,
Lower Raise
compulsory broadcast
license
Rural areas USF Lower Lower
Wireless Limited # of licenses Lower
DBS Limited # of licenses,
Lower Raise
program access
Broadband Deregulation, two wire
Raise Raise
upgrade policy
Wireless More licenses,
upgrade lowered TAC, oversight Lower Raise Raise
of siting authority
Broadcast Provide 2nd channel for
television to transmission of Lower Lower Raise
digital content
37

38. The barrier to gigabit connectivity is not
technology or economics
The barrier is organization; specifically, organizing demand and
the better use of underutilized assets

39. Over the past few years, Seattle has made itself a
prime candidate for investment in a gig
Seattle is the latest
city to go around ISPs
to get a gigabit
network
By STACEY HIGGINBOTHAM
December 13, 2012

40. Officials in Kansas City continue to work with Google
How Kansas Won the
Google Fiber Jackpot
and Why California
Never Will
By ELISE ACKERMAN “But the key thing was that city officials
August 4, 2012 promised to get out of the media giant’s
way. They didn’t dangle tax breaks, but
they did deliver access to public rights of
way, expedite the permitting process, offer
space in city facilities and provide
assistance with marketing and public
relations.”

41. Community efforts can change the math
• Build to Demand Model
Reduce Cap Ex • Access to ROWs, Facilities
• Reduce Regulatory Time
• Access Payments
Reduce Op Ex • Reduce Ongoing Regulatory Costs
• Utilize Existing Billing Platforms
• Build to Demand
Reduce Risk • Standardize Functions Across Areas,
Vendors
• Demand Acceleration
Increase Revenues • Marketing Platform
• New Services
Increase • Distributed Innovation
Ecosystem Benefits • Seeding Long-Term Growth
41

42. Key Questions
What assets does my community have?
How can they be more effectively managed to create a favorable
environment for investment in a project?

43. Gig.U created a worksheet for communities to use to
assess potential assets and opportunities

44. Engaging residents and businesses is crucial to
potential upgrades

45. Potential paths forward for communities seeking a gig
Gig.U’s Request for Information was a
RFI preliminary market check for communities
seeking to accelerate gigabit connectivity
in their areas. There were over 50
responses.
Type of Respondent Number
Operators & service providers 24
Network equipment 14
Consultant, content & services,
8
user equipment
Research & education network 2
Other 8
45

46. Potential paths forward for communities seeking a gig
Existing preferences and assets may
define a range of acceptable options for a
RFP build out – those communities often
choose to issue Requests for Proposals.
46

47. Potential paths forward for communities seeking a gig
RFI
• Paths not
mutually
RFP exclusive
• Could be
Negotiation complementary
with single
entity
47

48. Three quick lessons
Consider To achieve community goals of
various routes broadband ubiquity, consider WiFi
Community Involving the community early and
often will help manage expectations
engagement is AND show potential revenue streams
key for projects
Plan is better Consider ways the community can
become an attractive investment
than no plan partner as soon as possible

49. Thank you, now it’s up to you
Your choices now will determine your community’s bandwidth
destiny – and whether College Station will lead or follow.