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RETHINKING
THE INTERNETCan Municipal
Governments Be the
Broadband Utilities of
Tomorrow?
Tony Batalla, Head of IT, City of San Leandro
US Ranks 14th in Broadband Speed…
Tony Batalla, Rethinking the Internet 2
And has a LARGE Digital Divide…
Tony Batalla, Rethinking the Internet 3
And Pays MUCH MORE for Less…
Tony Batalla, Rethinking the Internet 4
Tony Batalla, Rethinking the Internet 5
Unleash lightning fast speeds
Close the Digital Divide
Lower Prices for Everyone…
Tony Batalla, Rethinking the Internet 6
Is the Internet…
Vital public infrastructure
Just like our Roads and Sewers?
Consumer Market is Ready
• Pent up consumer demand for change
Regulatory/Political Landscape is (Almost) Ready
• FCC “Net Neutrality” Ruling
• Lessons Learned from MUNI Wi-Fi
It’s Happening Already
• Chattanooga, TN
• Provo, UT
Tony Batalla, Rethinking the Internet 7
Govt’s As Internet Utilities of Tomorrow
Anton D. Batalla
IT Manager, City of San Leandro
Involved in Lit San Leandro Project, “SL-
WiFiber” Downtown Wi-Fi
Prior: IT Mgr for global biotech firm
System Engineer at heart
MBA from UCLA Anderson
BS from USF
Tony Batalla, Rethinking the Internet 8
Who Am I?
The Consumer
Market is Ready
(For Something)
Tony Batalla, Rethinking the Internet 9
Tony Batalla, Rethinking the Internet 10
Rise of the Oligopolies
Tony Batalla, Rethinking the Internet 11
Broadband speed positively
correlated with number of providers
Source: Wallsten, 2010
Tony Batalla, Rethinking the Internet 12
People Really, Really Hate ISPsSector 2014
Energy Utilities 76.4
Health Care & Social Assistance 77.6
Information/ISP 71.2
Transportation73.8
Accommodation & Food Services 78.5
Manufacturing/Durable Goods81.2
Manufacturing/Nondurable Goods 79.5
Finance & Insurance 75.1
Retail Trade76.8
Public Administration/Government 65.1
E-Commerce 81.7
Source: American Customer Satisfaction Index
Key Take-Aways:
• Comcast 10th Least
Reputable Brand in US
• MSN Annual Survey
Comcast 2nd Highest “poor
service” rating
• Not one ISP ranked higher
than 70 (2015)
• ISPs are lowest ranked
“business” industry
The
Regulatory/Political
Landscape is
(Almost)
Ready
Tony Batalla, Rethinking the Internet 13
Haven’t Politian's Failed Before?
Tony Batalla, Rethinking the Internet 14
Important Lessons from Muni Wi-Fi
Cities planned city-wide systems
• Fraser: Regulatory, Technical, Economic
Cities partnered with for-profit providers
• Ad-based Revenue Models
• Pay for “Premium” level
Telecoms fought back
• Residential access is a threat
• Ramped up Lobbying Efforts
Tony Batalla, Rethinking the Internet 15
• Feb, 2015 FCC Ruling in favor of Net Neutrality…
• Also Overruled Anti Broadband State Laws
Tony Batalla, Rethinking the Internet 16
The Internet is Open…Kind of
Types of Laws:
• Administrative
Hurdles
• No Direct Sale
• Referendum
• Pop Caps
• Feasibility Studies
• RFPs
• Excessive Taxes
Source: BroadbandNow.com
It’s Already
Happening
(Results are…Mixed)
Tony Batalla, Rethinking the Internet 17
Tony Batalla, Rethinking the Internet 18
Case Study: Chattanooga EPB
Source: Institute for Self Reliance / Benton Foundation
Key Learnings:
• Started slow
• Built a 10-year Plan
(2007)
• Engaged Leaders (with
80-90% support)
• Worst case scenario: $2-
3 month increase
• $220 million bond 25 yr
bond @ 4.5% interest
• Clear pricing strategy
• >30% take rate
• Net positive income
Tony Batalla, Rethinking the Internet 19
Case Study: iProvo, Failure in UT
Source: Davidson and Santorelli
Key Learnings:
• Sold to Google Fiber for $1 in 2013
• $39.5m loss for tax payers (revenue
bond)
• Competed with a “wholesale model” due
to state legislation
• Public-private partnership with
HomeNet, who went bankrupt in 2005
• Low take rate, high churn rate
Tony Batalla, Rethinking the Internet 20
>450 Networks and Counting…
Source: Eric James, Muninetworks.org
Plan, plan, plan!
Leverage existing investments
Engaged Managers &
community leaders
An electric utility helps
Public needs a voice
It’s politicized…
Ultimately, not for everyone
Tony Batalla, Rethinking the Internet 21
Closing Thoughts
Tony Batalla, Rethinking the Internet 22
Unleash lightning fast speeds
Close the Digital Divide
Lower Prices for Everyone…
Tony Batalla, Rethinking the Internet 23
Is the Internet…
Vital public infrastructure
Just like our Roads and Sewers?
Further Reading: • http://www.bbc.com/news/magazine-24528383• https://www.newamerica.org/oti/the-cost-of-connectivity-2014/• http://fiberforall.org/how-americas-broadband-ranks-and-why-adopting-fiber-is-essential/• http://works.bepress.com/cgi/viewcontent.cgi?article=1105&context=scott_wallsten• http://www.stern.nyu.edu/networks/telco96.html• https://www.utexas.edu/lbj/rhodesprp/01_02/divide/dereg.htm• http://www.technologyreview.com/view/421084/wheres-all-the-free-wi-fi-we-were-promised/• file://ch-fp03/user$/TBatalla/My%20Documents/misac%20preso/SSRN-id1682088.pdf• http://www.economist.com/blogs/babbage/2013/07/wireless-networks• http://www.slate.com/articles/technology/technology/2007/09/wheres_my_free_wifi.html• http://www.bloomberg.com/bw/stories/2007-05-20/municipal-wi-fi-a-failure-to-communicate• http://archive.wired.com/techbiz/it/news/2007/09/muni_wifi?currentPage=all• http://www.fiercewireless.com/tech/story/muni-wi-fi-20-time-cities-are-getting-smarter/2014-12-08• http://www.theamericanconsumer.org/2011/05/municipal-wi-fi-a-proven-failure/• http://bgr.com/2013/05/21/american-isp-customer-satisfaction-rankings/• http://knowledge.wharton.upenn.edu/article/what-the-fcc-net-neutrality-ruling-means-for-businesses/• http://www.newyorker.com/business/currency/fcc-municipal-broadband-ruling-matters-net-neutrality• http://www.newsweek.com/fcc-passes-new-rules-net-neutrality-and-municipal-broadband-309715• http://www.theverge.com/2015/2/26/8114205/fcc-decision-municipal-broadband-internet• http://www.inc.com/john-brandon/the-internet-is-now-officially-a-utility.html• http://broadbandnow.com/report/municipal-broadband-roadblocks/• http://ilsr.org/wp-content/uploads/2012/04/muni-bb-speed-light.pdf• http://www.ci.sandy.or.us/History-of-SandyNet/• http://www.nyls.edu/advanced-communications-law-and-policy-institute/wp-content/uploads/sites/169/2013/08/ACLP-%E2%80%93-Provo-Case-Study-
%E2%80%93-June-2014.pdf• http://www.npr.org/sections/alltechconsidered/2015/01/17/377757372/as-cities-push-for-their-own-broadband-cable-firms-say-not-so-fast• http://utahvalley360.com/2014/04/26/google-fiber-solves-provos-epic-fail/• http://americansforprosperity.org/article/evidence-shows-government-has-no-place-in-the-broadband-market• http://utahpoliticohub.com/municipal-broadband-is-a-failed-model-i-told-you-so-the-hub-debate/• http://www.govtech.com/network/Now-10-Years-Old-Utahs-UTOPIA-Tries-to-Beat-the-Odds.html• http://www.fiercetelecom.com/special-reports/municipal-broadband-contenders-san-leandro-calif• http://murray.seattle.gov/broadband/#sthash.3wTQkWjL.dpbs• http://www.seattle.gov/broadband/broadband-study• http://www.geekwire.com/2015/seattle-officials-municipal-broadband-too-risky-and-expensive-for-city-to-build-alone/• http://www.seattletimes.com/seattle-news/politics/cost-of-municipal-broadband-for-seattle-less-than-estimated/• http://www.thestranger.com/news/feature/2015/06/10/22360308/city-officials-reject-creating-a-municipal-broadband-network-to-compete-with-comcast
Tony Batalla, Rethinking the Internet 24
Q&A