Rural Telecon: Fiber should be free

Submitted by acohill on Fri, 10/14/2005 - 10:27

The Rural Telecommunications Congress 9th Annual Meeting is over, but I'm still catching up on presentations. Matt Wenger of PacketFront, a company that specializes in the network hardware and software needed to manage communitywide networks, presented an interesting model for promoting innovation and paying for the network.

Wenger did not say "fiber should be free" in precisely those words, but that is what I took away from his remarks. Wenger argued that it is services that people are interested in--VoIP, video on demand, security, network backups, etc.--and that a connection-based business model (what everyone uses now) actually penalizes both users and service providers.

In a connection-based model, where you pay for a connection of a certain amount of bandwidth (e.g. a T1), if you use services that require a lot of bandwidth, you have to pay more, both on the service provider side and the customer side. So success in marketing your services, or using lots of broadband services, is discouraged.

Wenger pointed out that it is particularly bad for service providers; if they successfully sell lots of services, their costs go up, unlike practically any other business on the planet, where costs typically decrease as business volume increases.

Wenger insists that the way a communitywide broadband network should work is to charge a small fee (e.g. 5%) on the revenue of service providers. In other words, customers and service providers can connect to the network for free, but fees paid to the community network manager increase based on demand, rather than on bandwidth.

Sound crazy? It might be, except PacketFront already has it working in a community in Sweden, where more than 60 service providers are selling services over a community broadband network, and doing so successfully.