The fog of FTTP

Last month the city of Palo Alto, Calif., suspended long-held plans to build a fiber-to-the-premises (FTTP) network, citing a host of legal and financial issues that are rooted in a primary obstacle: uncertainty. Municipal FTTP is a relatively new phenomenon, the city's utility advisory board wrote in a report last month, and as a result, "there is no 'cookie-cutter formula'" for financing deployments. In particular, investors and rating agencies often lack enough precedent to feel comfortable evaluating proposed FTTP projects. And outside consultants told the city that a public FTTP project was "a venture into uncharted territory." It's simply easier (and arguably more prudent) for Palo Alto to wait and watch other cities do it first.

To the extent that the fog of uncharted territory clouds much of the muni FTTP debate, the advance and maturation (or even the decay and demise) of more case-study subjects will provide clarity. That's just a matter of time. In Utah, construction of Provo's FTTP network is now underway, and the multi-town UTOPIA network just closed $85 million in funding. In Tennessee, the Jackson Energy Authority has been turning up broadband customers since April. Plenty of other towns are following similar paths.

But it may take a long time for even empirical evidence to sway FTTP debates one way or another. That much is already clear in Lafayette, La., where private telecom firms and city officials are offering different interpretations of the results of muni FTTP projects in Bristol, Va., and Marietta, Ga. Even with more data, debate will always be fed by resistance from private telecom companies. In time, however, the stories told in places like Jackson, Provo and Marietta will give investors a clearer view of this uncharted territory, which will undoubtedly add a much stronger voice to the debates going on in towns across America.

E-mail me at egubbins@primediabusiness.com.