Study: Muni broadband not much of a threat
Despite a flurry of announcements detailing deployment plans, municipal-run broadband services aren't poised to make much of a competitive dent in the next few years, according to a new forecast from Strategy Analytics.
The research firm forecasts that public broadband networks being installed in big cities such as Philadelphia, as well as smaller municipalities, will reach up to about 6 million homes during the next five years.
Those networks will "play only a small role" in the U.S. broadband market, which will continue to be dominated by cable operators and telcos, Strategy Analytics said. Moreover, commercial broadband services are expected to decline further, meaning only a fraction of homes will likely rely on low-cost or free public networks as their primary source of Internet access, the firm added.
"We expect a lot of consumers will supplement their cable or DSL service with municipal Wi-Fi; however, they are not going to rely on it exclusively," said James Penhume, director of the Strategy Analytics broadband media and communications service.
Tom Elliot, the author of the report, suggests that cable operators and telcos may be better off working with municipalities rather than fighting their proposed broadband projects.
"Incumbent operators should be looking for ways to make money by cooperating with municipal broadband–not alienating local governments which may be able to help with more important regulatory issues, such as TV franchising or network neutrality," Elliot said.