Where there is a high rate of return on investment with old technology without any threat of competition, monopolistic incumbents have little reason to improve their networks and/or product offerings.
MassBroadband 123 Complete in Massachusetts
The Massachusetts Broadband Institute (MBI) just announced that the 1,200-mile fiber network MassBroadband 123 is now complete.
According to the official announcement, the middle-mile network will eventually serve over 1,200 community anchor institutions. The open access network, constructed with $45.4 million in stimulus funding and an additional $40 million in state bond proceeds, lit up in March 2013. Schools, hospitals, and municipal government are some of the entities already connected.
Communities with a history of little or no middle-mile options will now have some level of connectivity via MassBroadband 123. The Commonwealth hopes to attract last-mile providers to connect homes and businesses, something we have yet to see succeed. We are afraid a more likely scenario will be a few providers seeking to connect the highest revenue customers with no intention to connect everyone, an outcome that would perversely make it more expensive to build financially sustainable networks in these areas.
A few places, like Leverett and Princeton, plan to invest in their own publicly owned infrastructure and will have the option to connect to the outside world through MassBroadband 123. This is an excellent approach that we applaud because it leads us to universal access.
According to a Bershire Eagle article, the state legislature plans to bring more funding to the initiative for last-mile connections:
But state Rep. William "Smitty" Pignatelli, D-Lenox, pointed out in an interview that much investment is needed before individual homeowners and businesses can connect to the network.
The state Senate is poised to move on a bond bill which includes $50 million to be put toward the project's phase, Pignatelli said.
"The state has made a very big commitment in hopes that the private sector would step up," Pignatelli said. "The time is now."
In our experience, middle mile networks change the economics of the operating costs for fiber networks, not the capital costs. The high upfront capital costs are what deter investment and robust middle mile networks do little to change that reality, which is why communities are smart to step up and make the necessary investments.