The good and bad of niche broadband networks

Niche broadband networks, built by communities, universities and others to cover areas big ISPs wouldn’t, are doing well in the U.K according to a study out Monday by PointTopic. As the U.S. sees its broadband competition dwindle on the wireline side, this study provides some hope from across the pond that academic-and community-sponsored networks can revive broadband innovation.

According to leading analyst firm, Point Topic, the country’s alternative network operators have increased their residential customer base by 85 percent since mid-2011, and had around 8,400 fibre-based superfast end user connections at the end of 2011. These include fibre-to-the-cabinet, fibre-to-the-premises and fibre-to-the-building providers whose customers are receiving download speeds of at least 25Mbps.

Companies such as Call Flow Solutions and Rutland Telecom are providing service in suburban and semi-rural areas of the U.K where large ISPs such as BT or Virgin are not. Analogs in the U.S. would be networks from Sonic.Net, BendBroadband in Oregon, Google’s(s goog) efforts in Kansas City, and an array of municipal networks, such as those in Chattanooga, Tenn., and Lafayette, La. But ultimately, while niche superfast networks are great for those that have them, a patchwork broadband strategy isn’t ideal.
Huge differences in speeds can create chicken and egg problems for towns with superfast connections and no one to connect with, as Chattanooga is finding. Additionally the economics of rolling out superfast broadband mean that dense areas are less expensive to wire, while rural and spread-out areas cost a lot, especially in the U.S. A national plan helps average out the costs, while cherry picking dense areas means any provider trying to connect rural or suburban areas will have to pay more and possibly charge more to offset those costs.
That being said, the investment in superfast broadband at a national level is expensive — for the U.S. the high-end network estimates come in at $100 billion — so perhaps we’ll have to take what we can get and hope firms such as Sonic.Net and Google, or cities like Chattanooga can help upend the traditional telco model.