By definition, an OAMM network will allow any Internet service provider (ISP) to connect to it, “on nondiscriminatory terms and conditions,” in order to provide last-mile solutions to homes and businesses. Economically, the idea is to encourage fair competition and reduce costs for companies so that credible business plans can be made for connecting unserved areas.
“The fundamental economic principle is simple: Open-access, middle-mile networks can provide the savings that spur last-mile providers to build further and faster to reach residences,” the report said. “In this way, an open-access, middle-mile model promotes private investment and competition in last-mile service by reducing capital expenditures required to build last-mile connections.”
The report, released last week, also takes aim at a question that Congress has asked about OAMM networks: “If we build it, will they come?” The report claims the answer is “yes” based on evidence in several states, including Virginia, Nevada, Massachusetts, Illinois and Washington.
An OAMM network can take several forms. One form is the research and education network, which is initially built to provide service to government and community anchor institutions. Later, such a network can start lending fiber to ISPs. The report highlights the Illinois Century Network (ICN) as an example of this network type.
“[S]tarting in 2013, the network [ICN] began selling service to commercial providers, lowering the cost of entry in rural and underserved regions of Illinois,” the report said. “Forty providers use ICN to deliver last-mile service. For the Illinois Electric Cooperative, operating in a low-population-density part of Illinois — and serving some towns with populations numbering just in the hundreds — the ability to connect to ICN made it financially feasible to deploy fiber to the home, even as its rival, the local incumbent provider, continued to operate slow Internet service over a traditional copper network.”
Massachusetts’ MassBroadband 123 is another example of a research and education OAMM.
OAMMs can also be defined by the portion of a state that they serve. There are statewide networks like the Northwest Open Access Network in Washington; intra-state regional networks like the Mid-Atlantic Broadband Communities Corporation in Virginia; and local networks like the Medina County Fiber Network in Ohio.
These types of networks can have substantial economic impacts. For instance, the Medina County Fiber Network has led to “1,000 new jobs and half of the investment” in its respective county, according to the report.
The report also advises states to recognize that OAMMs can take time to develop. Thus, smart economic strategies are key. Colorado and Minnesota’s middle-mile programs call for 50 percent matches from applicants. Nontraditional ISPs, such as electric cooperatives and rural telephone companies, can be good partners when it comes to reaching certain populations. Environmental concerns can stall progress, so planning for such things up front is essential.
Community support is another important aspect of an OAMM’s long-term feasibility. The report recommends community surveys to gauge demand, and shared goals should be present.
“Partnerships work best when all partners are deeply invested in bringing success to the region,” the report said. “In the case of the Appalachian Power pilot project in Grayson County, the electric utility, the broadband provider, and the locality all expressed a common interest in the economic success of the region. The local government wants to afford residents a higher quality of life and attract new businesses, the broadband provider wants to add new customers, and the utility wants to combat population and industry decline.”
The report also describes how OAMM’s can address the “broadband monopoly problem” by giving more ISPs an opportunity to serve different customer bases. In all U.S. contexts — whether urban, rural or tribal — at least one-third of residents only have one broadband option.
“Limited competition is typically associated with harm to consumers in the form of higher prices, lower quality, slower innovation, reduced customer service, or some combination thereof,” the report said. “And, because fixed broadband is a widely subscribed service that, especially in light of the COVID-19 crisis, is now an essential pathway to participation in our democracy, society, and economy, any artificially higher prices will tend to disproportionately harm those subscribers who have lower incomes.”
