Ponca City Residential Broadband
[guest post by Dave Williams, Director of Technology Services for Ponca City]WHAT IS PONCA CITY BROADBAND
Ponca City Broadband is a new utility service, providing ultra-high-speed internet access for both residential and business customers. While this utility service will be available City-wide by the end of 2022, it is currently only available in the Phase 1 area of town (roughly one square mile in size, near the center of town).
Ponca City Broadband only provides one thing (internet access), but we do it extraordinarily well. Due to equipment and/or licensing fees compared to income potential (i.e. “margin”) we elected not to offer double- and/or triple-play (we don’t provide TV or telephone service). The competition in these other areas is well-entrenched and, to be fair to them – those services work fairly well. What was missing in Ponca City was reliable, high-speed internet. We’ll provide the missing service to residents and let the incumbents keep their telephone and television subscribers.
We offer 3 residential plans: 50 Mbps for $60 per month, 100 Mbps for $100 per month, and 1 Gbps for $250 per month. Upload bandwidth is 50% of the stated download bandwidth. A non-refundable, $200 account activation fee is required to begin service, and charges appear alongside the other utility services provided by Ponca City on the same monthly statement. There are no contracts, no asterisks, no data caps, no fluctuating monthly prices … no kidding! Our service plans aren’t “up to” the bandwidth amounts stated … they are never less than that amount. Customers simply get what they pay for, every time and all the time! Installation appointments are scheduled for a specific date and a specific time; we don’t ask our customers to wait around half a day, hoping we show up. Does this sound like I’m poking fun at any of the existing providers? Well, in a round-about fashion … I am. Ponca City Broadband was intentionally set up to offer a level of customer service never before seen, and we used many examples the incumbents provided that didn’t meet those expectations.
Business broadband is handled a little differently. A two-year contract is required, and service is a flat $200 per month for a guaranteed 30 Mbps of symmetrical bandwidth, and a burst rate of 50 Mbps symmetrical bandwidth. As long as available bandwidth exists, businesses run at their burst rate. Business customers also get a static IP address (whereas residential customers get DHCP addresses). The final distinguishing feature for business plans is a 4-hour service level agreement. In reality, the vast majority of our response times (between the phone calls and final fix) is just under 1 hour. Possible exceptions to this involve major problems (e.g. a semi-truck drives through a 96-count fiber line). Those events are thankfully very infrequent, and simply require the time needed to hang new fiber and perform the necessary fusion splicing (96-count fiber repairs generally require 8 to 12 hours to repair).
Customer response so far has been over-the-top; they love the speed and reliability of the service, and they have never experienced customer service at the levels we’re providing. We have not lost a single customer over dissatisfaction with the service, but we have lost customers. People move some out of state, some out of Ponca City, and some have just moved out of the area we currently offer service in. The last group of customers has begged us to let them know when service is available at their new address; they can’t wait to get reconnected.
WHY IS BROADBAND EVEN IMPORTANT
Before getting into the guts of why and how Ponca City did what we did, I’d like to share some background information on the subject and share some history of fiber networks in Ponca City.
We are currently going through the third MAJOR transformation in home computing. The first wave, of course, actually introduced the concept of a personal computer to the home. In 1984 only 8% of American households had a computer, but by 2000 more than HALF of them had one and in 2015 more than 80% had ONE and 42% had two … or MORE. The second wave brought us home internet usage: in 1997 only 18% of American homes had home internet connectivity, but just 3 short years later, 42% had someone using the Internet at home and in 2015 the number is again in the 80th percentile. The third wave has actually been taking place since just after the turn of the century: the transformation of home Internet access from dial-up service to broadband. If you’re like me, you really don’t miss the good old days of dial-up service – which used those loud and obnoxious sounding modems to get you to AOL. In 2001, less than 10% of our households had broadband connections to the internet. By 2008, 57% had embraced broadband in one form or another, and by 2015 dial-up service was really still only in use by people living in areas where that was the ONLY option.
Some people believe the internet is entertainment, while others believe it is a vital piece of infrastructure; something society can no more do without than roads, law enforcement, or even basic water distribution and sewer systems. No matter which side of the debate you fall on though, the statistics I just mentioned show that – much like having a computer at home – access to the internet via broadband methods is not just a passing fad.
Speed and data throughput improvements over the past 20 years have been phenomenal. Let me give you a quick and easy visual representation of what I’m talking about.
In the 1990s our data needs were fairly small, so dial-up services sufficed quite well. The data handling capabilities of old dial-up connections were along the lines of a dripping kitchen faucet. But that is essentially the amount of data they needed to pass every second to satisfy the need at that time. People were sending emails, beginning to shop online, and other such things. By the turn of the century though, our data needs were growing exponentially. We needed something better … something that could carry more data at faster speeds.
Next came the advent of T1 lines, then ISDN, DSL, Cable, and even satellite and WiFi. A fire hose is a pretty good representation of the typical data handling each of these provided. With this technology, we were able to bring more data into our computer at faster speeds – which helped lead to the explosive growth of social media, music and video sharing, and a host of other bandwidth-intensive uses.
Technology didn’t stop there, though; it got better, and much, much faster. The advent of fiber-optic network technology blew the LID off what we previously had for network capability. How much, you may ask? Well …… in terms of how much data fiber optics can move, you have to take a look at Niagara Falls for comparison, as that provides the fairest representation of the differences between these various network access methods.
When I say that technology became “faster”, I need to explain a common misconception perpetrated on us by the traditional broadband providers. They more-or-less proclaim that “bandwidth is the answer to all your speed problems”. In reality, bandwidth really has nothing to do with speed. Let me illustrate that statement, using common road terminology. Bandwidth is simply the number of lanes your data can travel in. How wide is the highway, in other words. There are two other factors that come into play for overall network performance: raw speed, and latency. A 100% fiber-optic network offers network speeds matching the speed of light (that’s fast, in case you didn’t know).
I’m not going to try to pull the wool over your eyes and tell you that the speed of electrical impulses is slower than the speed of light. They’re actually about the same … but only in a vacuum. The reality is, once you place electrically conductive wires (twisted pairs used in telephone systems and coaxial cable used in cable television) outside of a vacuum (i.e. hanging on utility poles), their outer jackets crack, water begins to seep inside ... and they begin to corrode. Once this happens, short-circuits occur. In a network, short-circuits require multiple re-transmissions to complete a data packet transfer. This results in a much SSSLLLOOOWWWER network. The third and final number that makes up the overall network performance (and possibly the most important one) is called “latency”. Have you ever been in a major city during rush hour traffic, trying to merge onto or leave an interstate ramp? THAT is a road example of latency. It doesn’t matter how fast you can go once you get onto your highway, or how many lanes you can travel in once you get there …. If it takes you half of forever to merge and get going, you’re going to be waiting a while.
So why did I take 2 minutes of your life, talking about all of this? Simple. Fiber optic networks are not subjected to electrical interference. They’re just as fast in the real world as they are in a vacuum. They also have very little latency. Those two factors will always trump bandwidth. This is true to the point that a 50 Mbps fiber optic network connection will out-perform the average 100 Mbps copper network connection every day of the week when it comes to raw data throughput. In fact, a 50 Mbps 100% fiber-optic network connection will give a 1 Gbps copper network connection a run for its money.
If you doubt the validity of these statements, consider this: the entire “legacy” fiber system in Ponca City runs every server, computer, printer, scanner, and VoIP phone (roughly 850 devices). It also runs all of our legacy business customers who, between them, bring another 700 devices into the picture. Lastly, it runs the entire City-wide Free WiFi system which connects an average of 17,000 unique devices to the internet, every day. The entire collection of all of these devices runs on a 1 Gbps fiber circuit … and we’ve never used more than an average of 65% of that bandwidth. No lie … that is the power of 100% fiber optics! To drive this point home, I point to a 2018 study performed by Stanford University (ratified by MIT and Harvard): “Every single internet transmission being performed throughout the entire world this very second can easily be accommodated on no more than two strands of fiber optic network cabling”. THAT is the power of fiber optics!
PONCA CITY FIBER HISTORY
In 1996 the City of Ponca City began developing what has evolved into a fairly large network of fiber optic cabling throughout town (about 140 miles). Historically, this network provided for the City’s private business and communication needs as well as connectivity for the Ponca City Public Schools, University Center, and Hospital. In 2005 this infrastructure was expanded to provide Business Broadband services and, then again in 2007 to host the City-wide Free WiFi system (note: this is not a “hot spot” offering, it’s literally available everywhere throughout town).
Many people ask at this point: if you already offer City-wide Free WiFi, why contemplate another service that people have to pay for. Fair question and the answer is actually quite simple. Ponca City Free WiFi works as well as it ever did, and operations will continue indefinitely into the future. At the time the free WiFi system was deployed people weren’t trying to stream H.D. movies or play high-resolution games. WiFi is simply not capable of sustaining bandwidths required for those needs. Our Free WiFi users are able to get a 6 Mbps connection (assuming signal strength is adequate inside their home – or they have added a range extender) but to preserve overall bandwidth for everyone else in town if a user actually starts using that much bandwidth for more than 1 minute they are throttled to 1.5 Mbps for the next 10 minutes. The free WiFi system was, and remains, intended for low-volume internet traffic. Things like simple email, on-line shopping, and social media “check-ins”.
Business Broadband has been very successful over the past 15 1/2 years, with extremely high retention rates. In fact … many of these business owners, as well as their employees, have repeatedly asked for the same type of reliable service in their homes. Revenue from this service has been used to fund Ponca City Free WiFi.
In 2014 the City Commissioners tasked staff with a new project: find a way to make Broadband access possible to every resident in Ponca City.
PONCA CITY BROADBAND PROJECT PATH
To better understand the need for an additional internet provider in town, an anonymous survey of all PCUA (Ponca City Utility Authority) customers was undertaken in early 2015, and 1,555 residents (or 12.5% of the total number of surveys sent out) responded. 12.5% provides statistically significant sampling data – and in analyzing those responses it became clear that, even though Ponca City currently has other internet providers serving customers, a HUGE majority (84% in fact) indicated those service providers were not adequate for one reason or another. The same overwhelming majority cited a need for high-speed internet in their home, said they would like to see such a service available in Ponca City, and more specifically – since PCUA already has a solid reputation of providing exceptional services, we should be the one to fill this need.
Given the results of the survey, Ponca City formulated a Fiber to the Home pilot program in the fall of 2015. The pilot program not only tested our ability to provide high-speed internet access directly to individual homes, but also gave us valuable information on the potential challenges of in-home installations, various device configurations, long-term system maintenance and repair needs, and overall system life expectancy.
Over the course of several years, a number of different City staff worked on this project. Collectively we studied more than 2 dozen successful projects and 13 failed ones to learn from those experiences. We visited other Cities that have implemented broadband solutions, read countless research articles detailing the challenges and rewards of such projects, and systematically took every aspect of this project apart and looked at it to develop a plan addressing all the potential problem areas the best we possibly could.
The combination of Ponca City’s proven history with building and operating fiber optic networks in general … a success rate of providing high-speed ISP services to businesses ... and the knowledge gained from the fiber to the home pilot project were all positive indicators we could successfully operate Ponca City Broadband. Our mission was to focus on three things setting this Utility apart from potential competitors:
It is locally owned and operated – so the business decisions are not only be made here, the revenues stay here as well,
It is comprised of 100% fiber optic cabling; nothing else, anywhere in the network - which none of the competition can honestly lay claim to, and
It is being backed by the good reputation of the Ponca City Utility Authority – so there’s built-in trust.
In 2015, Ponca City began working with a firm called Monte R. Lee and Company to develop high-level engineering plans for a City-wide Fiber to the Home deployment. Their first pass at developing a construction estimate involved keeping and using all of the fiber assets currently in place throughout town. Inside discussions with Monte R. Lee staff though, it became apparent that approach had significant drawbacks. To begin, some of that fiber had already been in place since 1996 and the overall remaining lifespan was questionable. Over the course of time, different types of fiber were used – and they each have certain characteristics that pose problems with combining new technologies and/or having the ability to rapidly adjust and make changes. There were also some suspect documentation issues with the existing fiber, making it difficult to know for sure where each splice point and distribution area was.
Given the possible magnitude of problems these drawbacks could cause the project, Monte R. Lee was sent back to the drawing board with their hands completely un-tied. They were tasked with creating an engineering plan and construction estimate assuming a greenfield build (i.e. start from scratch, everything is new). The only customer requirement they were given involved how many fibers to account for. We wanted one strand of fiber available for every home, business, school, WiFi radio, street light controller, traffic controller, school speed light controller, and every utility department SCADA equipment – plus no less than 30% more, everywhere in town. The extra 30% more fiber gives us room to grow, in terms of the number of homes or the number of devices that might need to connect in the future.
To our surprise, the final estimate for a complete new build was less than $100,000 more than re-engineering and using what was already in place. This was a no-brainer decision for Ponca City. For less than $100,000 more than originally anticipated, we got a professionally engineered, constructed, and tested system – completely brand new. That was great news on one hand.
On the other hand, the financial model resulting from Monte Lee’s work showed the cost of a one-time, full build-out of the entire City limits could not operate and service the required debt for several years without substantial subsidies from other City funds. Subsidies, especially large ones lasting for several years, were not something management wanted to recommend or pursue – so we began looking for reasonable alternatives.
The challenge we faced in getting fiber to every home at a construction cost that didn’t require significant subsidization was resolved by considering a modular, phased-in approach. Building the project out in incremental phases didn’t change the overall price of the project … but it did allow us to build JUST the parts needed to support the various phases or areas of the town being implemented at the time. By spreading the construction costs out over a longer period of time the new Utility will build a revenue stream from customers in the previous areas to support those future costs.
Another advantage of a phased-in approach is that it provided time for City staff to adjust to any potential learning curve issues involved in supporting an increasing number of broadband customers. We’ve been able to learn from mistakes before they became too big, and have also capitalized on successes along the way.
To minimize construction costs and the amount of time it takes to build out a project like this it really must be done in somewhat of a linear fashion. A geographic area can be divided into sections but construction in each section must be completed before moving on to the next section, rather than cherry-picking and building out one street, then moving across town to do another street. First of all, the amount of time it takes to move the construction equipment and get set up is problematic. Secondly, without the core network infrastructure connecting the individual streets, the network itself doesn’t really exist and no one can connect to the outside world.
Choosing a phased-in approach was not the end of our headaches. Next came the question of “where do we start”. There are two general lines of thinking when it comes to this question. One is to start in an affluent area of town since more people are likely to subscribe. The other is to start in the “right” area of town. The difference between the two lines of thinking balances construction cost with the likely revenue streams. Ponca City is essentially divided from the North to South by N 14th Street. Of the total homes and businesses in town, 65% are on the West of that street … 35% on the East. Construction estimates placed 49% of the total project cost to the East, which meant that, even if everyone on that side of town subscribed, the monthly revenue stream wouldn’t be sufficient to cover the debt payments (much less the monthly operating costs). That put us back in a position of needing a sizeable subsidy.
Ponca City chose a different path. We let the financial numbers drive our project, not the “political” numbers.
Our chosen Phase 1 was recommended as the starting point for four major reasons:
The density of homes in this area is the highest of anywhere in the City limits;
Income demographics in this area supported a good overall subscription - or take-rate - in relation to the home density;
These homes are primarily served by overhead utilities with direct access from either the alley or curbside out front, so last-mile connections were the least challenging, and
Utility easements in this area were the least problematic.
In other words, this was not only the easiest area to start in; it provided the lowest cost-per-home to build the infrastructure and had the highest probable source of revenue to get the new utility off and running.
Ponca City is fortunate enough to already operate four utility services: Energy, Water, Wastewater, and Solid Waste. This helped our Fiber to the Home project in two major respects:
Ponca City owns the utility poles in town, so pole attachment agreements posed no problems; and
The cash reserves in those combined fund balances provided the funding mechanism for Phase 1.
By coincidence, the Phase 1 area of the project is almost in the middle of the City limits, and each of the 4 subsequent phases is the four corners of town. Phase 2 is the Southwest corner of town, and working in a clockwise rotation from there are the other 3 phases. All 5 phases were chosen with the same formula (described above) in mind. One of the biggest lessons we learned from studying 13 failed municipal broadband projects was that, if you build the high-cost areas first … you’re doomed to fail more often than not.
Construction was completed in Phase 1 and Ponca City Broadband opened doors for residential service on July 1, 2019. We passed just over 1,900 homes and businesses in this phase, and we’re on track to meet our 35% take rate. Since there was no debt assumption in Phase 1, we’re already cash-flow positive. Customer growth is slower than originally expected but is steady nonetheless. The relatively small area of Phase 1 prohibited our ability to mass-market the new utility in any meaningful way. That problem diminishes as the utility grows in size, though. Several direct marketing approaches have been used, but the best marketing tool at our disposal is word-of-mouth from current customers … and that is beginning to show dividends. More often than not over the past 6 months, new customers indicate they signed up because their neighbor told them how good the service is.
We bid Phase 2 and 3 at the same time: a regular bid for Phase 2, with an, add alternate for Phase 3. We knew we’d save overall project time by doing this, and wanted to see if the larger volume of construction units would entice bidders to lower their per-unit prices. To our delight, this actually worked in our favor and the contract was awarded for both phases at the same time. Since the final engineering, materials/supplies ordering and delivery time, and contractor mobilization time was essentially removed from Phase 3, we saved an estimated 6 months overall on the combined project timeline.
Construction is well underway in Phases 2 and 3. When completed, Ponca City Broadband will be available to 65% of the homes and businesses in town (roughly 10,750 customers). It’s at this point that advertising in the local newspaper, radio stations, and sponsorship signs at the high school sporting complexes makes sense.
The funding mechanism for Phase 2 and 3 required a loan from additional Utility Authority cash reserves. This loan will require debt reduction payments, but those are not scheduled to begin until the construction is complete … and we’ll be accepting new customers, building the monthly revenue stream even more.
The Phase 4 and 5 areas pose some challenges. Homes in these areas of town tend to have larger lot sizes, are more likely to have underground utility service, and the area around Lake Ponca is known to be full of dense rock. All of these issues tend to drive up construction costs. We knew going into the project that a significant debt issue was going to be needed to fund these two areas. The initial thought was to issue a revenue bond against the combined Utility Authority revenues. Due to some unprecedented low-interest rates though, that plan was changed a few months ago, involving a bank loan instead.
Final engineering is underway for Phase 4 and 5 now, with a target date for construction bids by September/October 2021. Since the debt has already been issued for these two phases, they will be bid similar to Phase 2 and 3 (e.g. Phase 4 by itself, with Phase 5 as an add alternate). Construction should start by November/December 2021, with an estimated completion date of December 2022, a full 18 months ahead of the original schedule. At that point, all homes and businesses inside the City limits will have service available (estimated 15,450 potential customers).
Construction costs have increased over the past 3 years but we’re still likely to keep the overall project under budget. Phase 1 taught us some important lessons about applying engineering budget estimates to real life. For example, the engineer budgeted for service drops and electronics for the entire 35% takes rate. In reality, a project like this doesn’t need that many materials upfront. The expected take rate encompasses the LIFE of a project, not the first month, or year. These items can actually be purchased as they are needed, rather than all of them upfront – and then have them sitting in a warehouse, waiting to be needed. By deferring these, essentially “operational expenses”, the capital project budget (even though costs are rising) should still be achievable.
Day-to-day operational costs are still very minimal. Bulk Broadband (the commodity we re-sell to customers ) continues to drop in price. Ponca City Broadband has a skeleton staff in town to handle day-to-day physical plant issues. In the event of emergencies, we have the ability to contract out with various service providers and, in smaller emergency situations we can always borrow resources (staff and/or equipment) from our other utility departments. We contract out some of the most troublesome pieces associated with providing internet access: the network engineering and 24x7 helpdesk roles. We also utilize three layers of contractors for in-home installations: low volume (less than 10 per week), middle volume (10 to 40 per week), and high volume (more than 40 per week). This out-sourcing approach has worked very well for us and, until the utility grows to a large enough size warranting a change – we’re sticking with this model.
NETWORK TOPOGRAPHY AND ARCHITECTURE
At the head end of our network (called the Central Office), we purchase bulk bandwidth from two different providers. Each provider brings fiber into Ponca City from different directions, and their Central Offices are in different areas of town (so each of their paths to our Central Office uses a different route). Each provider enters our Central Office from opposite walls (one from the East, the other from the West), using separate conduits and trenches. They both meet at our network router. The router uses both providers throughout any normal day, load-balancing between the two. In case we lose connection to one provider, our router fails over to the other provider and all traffic is handled through that route. The total bandwidth from each provider is more than adequate to handle the entire customer load. This fairly minor extra expense (e.g. about $1,700 per month) enables Ponca City Broadband to maintain an extremely high-up time experience for our customers.
Ponca City Broadband operates what’s called a GPON (gigabit passive optical network). GPON networks serve to reduce the number of fibers needed in certain segments of a network by using splitters and a term called “over-subscription”. I’ll explain splitters later on, but over-subscription is a fiber optic algorithm that determines how much backhaul bandwidth is needed to reasonably service customers. GPON maintains that 2.5 Gbps download and 1.2 Gbps upload bandwidth is enough to meet the needs of up to 32 customers, regardless of the bandwidth those customers actually subscribe to (up to, and including, 1 Gbps). The raw speed and low latency of fiber optic networks provide the mechanisms necessary to make this statement true. The next evolution of this technology is called NGPON and/or XGPON, which bumps up the possible bandwidth from 1 Gbps to 10 Gbps, and bumps up the splitter ratio from 1x32 to 1x64.
The overall design of our network uses different types of fiber routing designations: a redundant transport loop connects the central office to four network operation centers that are geographically located in each of the four quarters of the town. Distribution fiber runs from the network operation centers to customer service areas, which essentially divides the various service areas into groups of 144 to 576 homes/business. Each customer service area has a PON Cabinet where the distribution fiber terminates and provides for fiber connections near each home in the service area. The “last mile” fiber connection attaches to the distribution fiber close to the home and follows the same path as secondary electrical service, terminating at a plastic box within a few feet from the electrical meter. At the present time, no electrical power is needed outside of the Network Operation Centers and inside the customer’s home, but no one knows what the future might hold … which is why we want to hit the house close to the meter. The in-home fiber connection starts at the plastic box on the exterior of the house, and fiber is routed around the structure to whichever room the customer wants their modem set up in. We penetrate one exterior wall, install a faceplate on the interior wall, and connect a fiber jumper cable between the faceplate and the modem. We don’t get in attics or crawl spaces, and we don’t do any interior wall installations (we refer customers out to local service providers for any “in-home” networking needs).
This multi-tiered fiber approach minimizes the amount of fiber hanging on our utility poles. Each home has a strand of fiber running to the PON Cabinet in that service area. Each PON Cabinet is connected to the distribution fiber circuit using 1x32 splitters (32 customers essentially share 1 strand of fiber at that point). The Network Operation Centers are connected to the Central Office in a similar fashion. The beauty of GPON technology, coupled with WDM (wave division multiplexing), allows customers to “share” fiber … without actually sharing it. Light waves are transmitted in different frequencies (e.g. my house uses green light, your house uses red light, etc.) and the OLT (light source in the Network Operation Centers) and the ONT (modem in the house) use filters to weed out everything except the light frequency that particular customer uses.
This networking architecture is actually quite similar to the way road systems are built. Think of the transport loop as a major interstate highway; capable of handling large volumes of traffic at high speeds. The distribution fiber running between the Network Operation Centers and the PON Cabinets is similar to State Highways (also capable of handling larger volumes of traffic at higher speeds). The fiber running from the PON Cabinet to the connection points near a cluster of homes is similar to major City streets (like N 14th in Ponca City). The service drop is similar to a city, side streets, and the in-home installation fiber is the driveway. Data traffic flows from a house to the internet just like a customer’s car would follow a route from their house to Oklahoma City: leave the driveway on a City Street, turn onto N 14th St, turn again onto US-60, finally merging onto I-35.
As I mentioned earlier, Ponca City Broadband deployed a completely new outside fiber plant. So, what are we going to do with what we already had? The answer to that question has two parts: now, and in the future.
For now, we’re not going to do anything with it. It still runs everything it was built to run (City network, Public Schools, University Center, hospitals, and multiple business customers). As the new fiber plant is being built throughout town, business customers will be moved over as soon as possible (either as we pass the business or the next time they suffer a failure of any kind). Once the entire City limits are built we’ll move the Public Schools, University Center, and Hospital over. Next, we’ll move Ponca City Free WiFi over, and lastly, we’ll move the City private networking functions over.
Once everything has been moved from the legacy system it will be abandoned in place for the time being, and wrecked out (removed) as time permits and/or special needs arise.
WHAT OTHER REASONS ARE THERE FOR DOING THIS?
I’ve already shown that fiber to the home results in phenomenal network speeds, but there are several other advantages this project offers Ponca City. First of all, it is THE future-proof foundational infrastructure that enables us to not only provide residents with the reliable, high-speed access to the internet they desire now – it also allows for future HIGHER speed delivery of new technologies and services that are still being imagined and dreamed up today. The current limiting factor in fiber network speeds is the electronic components; the fiber itself can move data hundreds, perhaps thousands of times faster than what we’re currently capable of from the electronics side of the equation. The electronic equipment in the Central Office and NOCs can be changed out, using the existing fiber to provide even faster network speeds in the future.
There are many other benefits of fiber to the home as well. To begin, at a high level it presents a City with new opportunities for growth. Some of these opportunities will be realized immediately, and some overtime.
The immediate benefits of broadband will be seen in the money spent by outside contractors while they’re in the town building the infrastructure. Our local hotels, restaurants, gas stations, and other retailers are seeing an increase in sales and services while the project is underway. The new utility will require staff to run and operate it, so new jobs will become available in Ponca City. This will not only be true for the utility itself, but for some of our local vendors who might be engaged in the in-home installation and certain maintenance activities. Partnering with the Chamber of Commerce and PCDA, marketing campaigns have effectively put Ponca City on the broadband map, which serves to level the playing field for us quite a bit with respect to potential population and business growth. Having access to broadband doesn’t guarantee growth in this area, but not having broadband certainly adds to failure rates when it comes to attracting new business.
Longer-term benefits are not only possible but probable as well. Unfortunately, these are hard to actually isolate and measure from any practical perspective. It’s a given that these benefits do, in fact, happen – but other factors could also have been in play throughout the previous cities deploying a broadband solution so it’s risky for everyone to bank on their results being the same. Even so, these are nice things to consider.
Across the United States, many cities have seen increased job numbers following their move to broadband; from new startups to existing companies expanding their workforce. It also opens the door to many work-at-home options, so new entrepreneurial ventures often spring up.
High-speed internet access has become a critical factor corporate site locators consider when proposing new sites to companies wanting to relocate. It can also positively influence a company NOT to move away from an existing location. Typically, local economies average between a 1.2 to 1.3% increase in their gross domestic product after their projects are implemented.
Home values … both the for-sale as well as the rental markets, typically see between 2 and 7% increases in value after Broadband is introduced. Recent studies indicate the availability of this type of service to have roughly the same impact on a home’s value as adding another bathroom does. In the rental market, this can not only make one rental more attractive than another, but it also allows landlords to charge higher rents.
The overall value of broadband can actually be leveraged to lower monthly bills for subscribers; they’ll be able to consolidate some services and maybe even cut the cord from traditional service providers, enjoying similar services via the internet at a reduced cost. This presents an opportunity to leave more money in EVERYONE’S pockets each month, so spending habits can change a little bit. With more money to spend, other local retailers may see some benefit.
Also of significant note is the potential impact broadband offers to education and healthcare. Education and research uses are probably easy to guess at - high-speed access allows students more opportunities to explore and learn. The advantages broadband offers in the healthcare arena are just as significant … with advanced opportunities for access to telemedicine, telehealth, and other eHealth services. It can also be used to support in-home electronic monitoring as well as providing alternatives for aging in place and other support activities for Senior Citizens. Lastly, broadband service in the CARE-GIVER’S home allows them access to healthcare information faster than having to drive to their office or the hospital. Radiologists
can effectively work from home, and Physicians can order or review test results – even prescribe medications -- much more efficiently.
Overall, fiber to the home utility projects offers many potential benefits far in excess of a simple fast connection to the internet. Once the initial costs of deploying a municipal system have been paid, Broadband projects provide a high-margin revenue stream that can assist with General Fund projects.
WRAPPING UP
If you are contemplating such a project, I’d like to stress what Ponca City found to be a crucial success step. First of all, the best path forward in projects like this is determined by setting aside all politics and neighborhood favoritism … then by critically analyzing three major factors: home-density (which is the number of homes in a particular area), take-rates (or the number of probable subscribers within that area), and the cost-per-home passed ratio.
In order to ensure financial stability, and an adequate revenue stream really MUST be the deciding factor in determining which areas of town are implemented in what particular order – otherwise there are risks of having to support the utility via other methods until then. It’s an unfortunate truth, but areas with extremely high cost-per-home-passed ratios, especially compared to home density levels in those areas, should not be the first areas to get connected. In projects like this, it doesn’t really matter where you start. People living in the other areas are likely to complain.
Think of building a road system in a city that has never had a road system before. It’s not practical to build every street at the same time. Rather, you begin with one street, building out to a reasonable (and financially achievable) endpoint.
NEXT STEPS
While Ponca City Broadband’s main mission is to provide internet access within the City limits, there’s no reason to simply stop there. The areas surrounding Ponca City are ripe, as well. These un-served or severely under-served areas are starved for adequate, high-speed internet services. With recent changes in grant and funding possibilities at the Federal level, there’s already thought being given to future expansion plans.