We have the Heartland Institute (a name that invokes a warm, American sound, doesn’t it?) taking one side of the issue as you can see here. We all want to hear all the sides of any issue but I also believe it is important to understand motivations as this can help us to understand the perspective of the opinion.

According to Glenn Fleishman of WiFiNetNews, the Heartland Institute has a rather interesting history and some unusual ties that make me want to question their perspective. In fact, Glenn did an excellent job “connecting the dots” to see where the financing for the Heartland Institute actually comes from.

Personally, I think I might have felt a little better about this perspective if right from the start Steven Titch (the author of these articles from the Heartland Institute) had mentioned his financing was courtesy of the ILECs. To give you a little more of an understanding of the important work the Heartland Institute has done, here’s an interesting article about how they feel cigarette smoking, something that simply has to be read. I don’t have any clue who financed this opinion but based on what I have read I could make an assumption.

The funny thing is, I tend to fall on the side of the ILECs and the Heartland Institute on the Municipal Broadband issue – under a set of very strict circumstances. What’s worse, if these concerns had looked at issues that are behind the situation and told the hard truth instead of slanting their presentation as best they could, they might have picked up some serious support. However, this is probably something that would be difficult to do unless you are well versed in the business and are willing to lay it all out in the open – something that organization are sometime reticent to do.

So, what I is my take on the debate?

Well first, let me provide you with the obligatory disclaimer – something the Heartland Institute apparently overlooked, as they probably didn’t think it was prudent.

I am a businessperson deeply involved in this industry both from the owner’s standpoint of a very small ISP/WISP and someone who has invested a lot of time and money in this field. If the concept of Municipal Broadband did take off and become commonplace I would stand to lose a significant amount of money but more importantly I believe I would lose the ability to have access in many of the places I would choose to live. This is exactly the point I wish to address. One more thing, just to be clear, I am not being paid by anyone, anywhere, including the ILEC, the cable companies or any other entity on the face of the earth for this opinion - go ahead and check in you have that kind of time!

What nobody seems to want to tell you is that this business is all about numbers – sorry, I would love to tell you it’s about bringing broadband to “our communities” or bridging the “Digital Divide” but the reality is, from just about everyone’s perspective from the giant ILEC right down to the single end user, it is all about the numbers.

I don’t care who you are or where you fit into the spectrum of the broadband world, you need to understand one thing there is a cost to bring broadband to the customer. With the possible exception of satellite (a technology that in its current state isn’t considered broadband by either the FCC or myself) every single delivery method of broadband I can think of depends on a certain level of population density. To put it another way, we need a certain number of people per mile in order to deliver service at a price you (the end customer) will be willing to pay.

From the perspective of the ILEC or the cable company, if there aren’t a set number of customers for every mile of wire or fiber they have to roll out, there is never going to be a return on the investment. The same holds true for a wireless deployment but we aren’t necessarily bound by the same restraints as in having to follow the roads. We still need to have a fixed number of customers inside the radius of our coverage area or the cost to deliver per subscriber climbs proportionally.

It stands to reason that densely populated areas serve as the best locations to deploy service – the more people that live in a square mile, the less wire that has to be installed to service them. Conversely, is a rural or sparsely populated area, the situation is exactly the reverse.

This is where the problem starts to become apparent. Where are the Municipal projects looking at rolling out? Why, the densely populated areas! Okay, so what? Well the problem starts to be that once you have deployed in the densely populated areas and then you deploy in the suburban areas there is no business model that will do the same thing for rural areas! A different way of saying this is to say if we have a huge project that gets built in the big city that is financed by the big city there is a very good chance if it is well designed, deployed correctly and managed efficiently, it will succeed. In fact, it should be able to be a profit producing revenue stream for the city.

Next down on the scale is the suburban areas that surround the city. They can form their own broadband projects which while will not have the scale of economics to draw from will also be successful providing the project is run well.