APPLIED COMMUNICATIONS

APPLIED COMMUNICATIONS

Lessons Learned from Rural Broadband Initiatives

Lesson One Success doesn’t happen overnight.

Case Study - Grant County Grant County Public Utility District installed fiber backbone

between substation. Fiber to the home roll-out began in 2001. Initial slow take rate below projections Quincy, WA - Population = 5,300 In 2006 – Microsoft, Yahoo and Intuit announced plans for

data centers. (Fiber + Low Power Costs) “One Tiny Town Become Internet Age Power Point” (Wall

Street Journal – 3/7/07) 1000 new workers = Housing Shortage

DIFFUSION CURVE

Rural Telecon “98”

Lesson Two“The power to transform will play

out unevenly and in stages.”

(Business Week 3/26/01)

THE STATS broadbandproperties.com

2004 = 200,000 homes passed by fiber.2006 = 4 million2008 = 10 million 2011 = 64 million

Muni-Wireless public wireless networks/hotspots2005 = 1222006 = 312 2007 = 415

PEW INTERNET PROJECTIn 2007 47% of all adult Americans had broadband

connections. Only 31% of homes in rural areas had broadband.

High Cost + Low income = Lower Penetration Rates

Geraldine, MT = $59 for 1.5 mg DSL

Lesson ThreeOne size doesn’t fit all.

Applications – Fiber or HFC Load Management for Electric Utilities (Fiber)

Home Automation (FTTP)

Cable TV – Video Conferencing

Applications - Wireless•Public Safety – Mobile applications for Police & Fire

•Public Works/City Inspectors Mobile applications

• Free Internet (Wi-Fi)

Lesson Four“You can’t have always get what you want.”

Source: Mick Jagger

Marshfield, WI – Case Study Charter Cable – Regional Fiber Backbone,

Fiber to Clinic & other businesses in town Verizon – DSL, Fiber Sonet-Ring Poor service in rural areas No fiber in industrial parks on town’s edge No Wi-Fi hot spots

HIGH PRIORITY LOW PRIORITY

HIGH COST Proceed Only If Strategy Ranks High on Other

Factors

Do Not Proceed

LOW COST Proceed Find a Partner to Undertake Strategy

Evaluation Measures Cost-Benefit Economic Development Public Support Financial Liability Commitment

Lesson FiveMetcalfs Law – “The Value of a network grows

with the number of users.”

Take Rates

Take rates ranged from 20% - 80%. Averaged around 40-50%.

Cable take rates have been higher than Internet Marketing surveys generally indicate higher interest level

than actual take rate Takes several years to penetrate market Competitors might enter market

(Applied Communications – Public Broadband Database)

Lesson Six

There is no such thing as a 100% success rate in business or in telecommunications.

Business Plan Select Appropriate Business Model ROI – 5, 10, 15 years? Risk Analysis Marketing Financing – Grants, fees, bonds, recapture, …

Lesson Seven

Planning can be a catalyst for action.

Marshfield, WI – DSL for Hewitt

Douglas, WY – Cable Modems

Sandpoint, ID – RFP for services spurs Qwest

Havre, MT – County Commissioners allow co-location

Lesson Eight

Don’t get trapped by paralysis analysis.

Strategies Find a niche Pilot project before full deployment Phase in, deploy to areas of high demand to

generate revenue Decrease risks – Partner, pre-lease, piggy

back on other projects

For More Information

Kate McMahonApplied Communications

(406)863-9255

kate@appcom.net

www.appcom.net