The Middle Mile/Last Mile Disconnect

Last Thursday Washington, DC announced they’re powering up a 100-gig network, funded in large part by broadband stimulus money. If I’m not mistaken they’re the only urban area to get money for an infrastructure project. That’s kind of a pity since urban areas have some pressing infrastructure needs that get ignored by the media. But more on that in a future post.

This week I tackled another challenging issue represented by the DC deal that gets ignored by much of the media, and probably policymakers as well. What do you do about connecting all of these middle mile projects to last mile (or first mile, as my UK friends regularly remind me) projects? Huh. You say you haven’t heard about a lot of projects connecting consumers and businesses to those stimulus-funded middle mile buildouts? That’s my point.

We’re running the risk of having a lot of project teams complete thousands of miles of buildouts late next year, and then start scratching their heads wondering where are all the grateful citizenry coming out to greet them. But the truth of the matter is, if the Feds are spending billions to build middle mile infrastructure that private sector companies refused to do, why do they assume those same private providers will build the last mile? We easily could end up stuck with “well, we can’t make the business case for wiring your [take your pick] small town, rural county, low-income neighborhoods either. So we’re not gonna do it”

I talk about this in more detail on GigaOm, and using DC as an example lay out some potential last mile-to-middle-mile connection strategies communities may want to consider. There’s also a post on one of the DC blogs that lists some other issues that need to be addressed. The bottom line is, whether you’re an urban area or a rural community, it’s likely you’re going to have to get firmly settled into the driver’s seat and forge your own last mile path.

A good story to pay attention to as developments unfold is Wired West. The Co-Chair of this western Massachusetts coalition of 42 small towns and townships, Monica Webb, was a guest on my show, Gigabit Nation and described why these communities are building their own last mile. There’s a huge middle mile network coming their way, but given those communities’ depressing experience of constant rejections by Verizon, they’re going to take control of the deployment process rather than hear “no” again. It does pretty much suck, though, that they have to worry about stimulus money funding a private sector provider that could end up cherry picking Wired West’s best customers.

It’s still early in the game, so Wired West hasn’t settled on a business model yet. However, it seems a public private partnership in which a private provider rides on top of an Wired West-owned open access network is the ideal situation from the standpoint of residents and every business except the large telecom & cable companies. Consumers and local businesses get the kind of broadband services that benefit their lives and potentially their economic well-being. Local governments benefit in a myriad of ways. Private providers get to offer services 1) without the cost of building the infrastructure, which generates ROI sooner, and 2) in the long run benefit from a competitive environment. This scenario would likely play well for urban areas too, such as in DC.

The rain that falls on this parade for many communities, of course, are the entrenched incumbents who myopically believe that smaller, local providers doing well can only mean that the big companies lose. Since you can’t blow incumbents off of this position with dynamite, how well the first mile strategies work out depends on how much fight, political willpower and creativity consumers, local businesses and sensible service providers bring to bear.

2 Responses

  1. MCNC, which is building a BTOP middle-mile network in North Carolina, has an interesting solution to this problem – it’s hired two companies to coordinate with first-mile providers, get POPs built in the right places, and do other things to make sure broadband really reaches the underserved areas of the state. See Kassandra Kania’s article in the November/December issue of Broadband Communities (available next week).

  2. “…if the Feds are spending billions to build middle mile infrastructure that private sector companies refused to do, why do they assume those same private providers will build the last mile?” excellent question, Craig. ASSUMPTIONS mean, by extension, dramatic BTOP failures are in store. NTIA will spin the message and deflect blame, but here’s how to discern the truth, before it happens:

    sift through BTOP infrastructure applications ( http://www2.ntia.doc.gov/infrastructure ), extract the middle mile projects from round1 (unserved & underserved, not round2 which focuses on community anchors), and then scan their quarterly NTIA reports. VERY few have confidently solved last mile connectivity or predict the revenue to support expensive POP interconnections. Most infrastructure projects are **over-builds** with little/no marginal benefit and are . . . direct contributions to $16trillion in national debt. Disgraceful.

    Encouraging genuine, value-added middle mile for Americans was not at the forefront of NTIA’s rapid grant award process in 2009 — and the BTOP horse has left the barn. There’s no turning back on wasted middle mile dollars.

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