Gigabit Squared, Monticello, and Next Generation Networks

For those waking up from a two week nap, the publicly owned FiberNet Monticello recently saw the private provider managing it step down, the City tell Bondholders that it would not make up the difference between revenues and debt payments, and us examining what the network has achieved. On Monday, the Monticello City Council joined forces with Gigabit Squared a new organization with several experienced network operators on board that previously made news by noting it had $200 million to help build next-generation networks and would likely be working closely with Gig.U. In a few months, they will take over managing FiberNet Monticello from HBC for a short period of time and may then continue with a longer contract. One of the benefits of the public owning a network is that when the business plan does not work out as expected, the public still has a strong voice in what happens next. Monticello could have decided to give up on it, but we are glad to see it chose instead to try a new approach. If a private company had owned the network, it alone would have decided how to proceed and its competitors would undoubtedly pay a pretty penny to see it disappear. Given the anti-competitive actions by incumbents (engaging in predatory pricing and frivolous lawsuits), FiberNet Monticello has to work harder to increase its revenues. Put simply, they have two choices. 1) Expand. 2) Innovate with new, next-generation services. From what we could tell, HBC was not particularly interested in either option in Monticello. HBC is a very accomplished triple play company (telephone, Internet access, and television) and does not appear focused on innovating new services. In fact, we have heard one of their likely future public partners saying that they would do triple play and nothing else for years. Gigabit Squared That may work out well for them and, quite frankly, probably will given their specific circumstances. But we also believe that the rise of next-generation networks (driven by local, public investments, as we detailed in our report on three gigabit cities) will lead to next-generation services and applications. And this is where Gigabit Squared is exciting -- they appear ready to push the envelope. The rest of us should hope that they can find many new ways of using these ultra-high capacity networks to improve services, from health care and education to who knows what. Big companies like AT&T and Comcast are hoping that their last-generation networks will be sufficient for many years to come because they want to take their massive profit margins and give it to Wall Street rather than investing in better networks in our communities. Smart communities are recognizing that slow DSL and cable networks are insufficient -- and organizations like Gigabit Squared will likely soon prove them right.