Access to tax-exempt financing does not begin to explain the sizable rate differences between municipal and private cable providers. It explains only about one percentage point of the 20, 30, or 40 percentage points that private cable rates were above those of municipal systems.
Gig.U Delivers its Gigabit to Maine
We continue to watch the Gig.U project with interest as some universities are teaming up with providers to deliver gigabit services to selected areas, generally around high tech campuses.
One of the first project announcements has come from Orono, Maine. The University of Maine and a private company called GWI are teaming up to bring real broadband to Main Street.
The gigabit announcement came on the heels of a major announcement from Time Warner Cable - they are increasing residential speeds in Maine from 8-10 Mbps (or from 15 to 20 Mbps for those speed demons) and doubling their upstream speeds from .5 to 1 Mbps (or from 1 to 2 Mbps for those living in the fast lane).
So Orono, which is talking about speeds of 50-1000 times faster, should have quite the advantage.
We last heard of GWI due to its involvement in the Three-Ring Binder project that brought middle mile connections throughout the state to start recovering from the long-standing underinvestment from Verizon (now FairPoint). We wrote about FairPoint's attempt to kill competition before it started.
Now GWI will be building a gigabit open access network in this community that will offer much faster speeds at much lower prices than incumbent operators do. It is certainly an improvement over the status quo in the short term, as noted by the Bangor Daily News.
“We will plant the first seed in fertile economic soil,” he said. Kittredge said the Orono and Old Town area, with the University of Maine at the center, is prime real estate for getting the high-speed service off the ground and considering whether it will work in larger markets such as Bangor or rural markets in northern and eastern Maine.
For area businesses and researchers inside and outside the university, having so much more bandwidth available will open up new opportunities with far-reaching consequences, according to Kittredge.
However, we continue to be concerned about the long term ramifications of this approach. GWI will own the network and decide what the rules of the network are. Who will be running GWI in 5, 10, or 20 years? Could a major company like FairPoint or Time Warner Cable buy it and fundamentally change it? Companies come and go, but communities will need fast, affordable, and reliable access to the Internet for as long as we can imagine.
We are curious what the details are - what is the public contributing to this partnership? What is it getting in return? Thus far, we aren't sure.
What we do know is that the Gig.U approach is far preferable to being reliant on Time Warner Cable, at least in the short term. Probably in the medium term. And over the long term, who knows? Communities need to carefully weigh these long term decisions.