Editor’s note: Which executive is better to weigh in on the “net neutrality” debate than one with plenty of network experience? That’s why WRAL TechWire reached out to Joe Freddoso, former CEO at MCNC which built the state-wide N.C. Research and Education Network, to share his thoughts after President Obama re-ignited the Internet regulation debate earlier this week. Build and sell, Freddoso says. For an opposing view, read the opinions of Frontier’s top executive.
Freddoso currently is COO of Mighty River, LLC which is a company formed in June 2014 to help public and private sector entities understand and thrive in the deployment, use and monetization of broadband infrastructure. Mighty River, LLC is located in Wake Forest, NC. Serves as a volunteer on the Town of Wake Forest broadband task force.
WAKE FOREST, N.C. – In general, service providers want both regulatory certainty and restricted competition for their infrastructure investments.
On the regulatory certainty side, service providers want the ability to have some modicum of control over and some way to monetize the content that crosses the networks they built. Service providers want to gain revenue from their end customers and also gain revenue from content providers to use their network, particularly those that are the source of a lot of the traffic (Netflix, Google/YouTube, etc).
On the competition side, service provider’s want some guarantee that if they put fiber in the ground that competition will be restricted particularly that governments won’t build infrastructure to compete with them. They feel there is enough competition in the wireline from Cable Companies and CLECs [competitive local exchange carriers] and from wireless providers.
Let’s look at another private business in the way that some providers look at the broadband market.
If I open a Jersey Mike’s franchise in a strip center, I don’t get paid by Staples for the traffic and revenue that my location generates for the Staples location next to my Jersey Mike’s. My infrastructure is only monetized by what I generate in direct customer revenue. I also have no guarantee that Subway won’t open a location down the block. I am going to have to compete with them.
I may get a clause in my lease that Subway won’t open in my specific shopping center but the strip center down the block will likely have another sandwich shop. Also, I have no footing to ask the municipal park next door not to have a government run concession stand. In fact, this frequently happens.
Is broadband infrastructure on a different scale than sandwiches? It sure is.
However, broadband infrastructure is also the cheapest infrastructure to build and the least costly to maintain of which I am aware.
Consumers Want Competition
Should service providers get both regulatory certainty and limited competition for their investment?
The overwhelming public feedback to the FCC in comments is an emphatic “no they shouldn’t.” Its a bi-partisan opinion and its overwhelming according to a recent University of Delaware survey (http://www.udel.edu/cpc/research/fall2014/UD-CPC-NatAgenda2014PR_2014NetNeutrality.pdf).
The providers can pause their projects and wait for more certainty. From a business perspective and a shareholder prospective its prudent to wait for more information if major decisions are pending. However the service providers need to be aware that they are dealing with a much more educated public now than five years ago and they are losing the battle of public opinion.
My message is get your fiber in the ground, sell the heck out of the premium service in the markets where there will be uptake, have great customer service and compete for business.
Last I checked taking some risk, selling like crazy is the American way.