Why the big rush to broadband?
August 25, 2004
I worked in research and development and corporate strategy for a very large Silicon Valley technology company for 10 years up until a year ago. Part of my daily job was to evaluate emerging technologies and determine whether or not our company should invest in them based on the costs, benefits, risks, etc.My take on the Truckee Donner Public Utility District’s $24 million investment in a fiber-optic broadband system is that it is a very bad idea. Here’s why: Broadband technologies have been rapidly evolving and will continue to evolve for the foreseeable future and will be delivering solutions that are much better and cheaper than fiber-optic cables. Take WiMax for example. WiMax is a young, emerging standard for providing broadband access via wireless over a broad area. This technology is expected to really take off in the second half of 2005. Through WiMax, you will be able to get the same type of broadband services that fiber optics provide, only much more easily and at a lower price. WiMax will work similarly to how people access the Internet over wireless today in public places such as Wild Cherries or in their home. They receive the wireless signal to their computer and like magic they are on the Internet. But unlike these small wireless networks that are limited to 100 feet, WiMax can be broadcast up to 30 miles. So in the not-so-distant future, accessing broadband services could be as easy as tuning your radio to your favorite radio station. These WiMax networks could be provided by any public or private institution. There is talk that Walmart could end up being the WiMax king because they have so many stores across the country; just install a WiMax base station on the top of each Walmart and most of the continent would have easy access to broadband.The Aug. 25 edition of the Wall Street Journal had a great front page article about the upheaval in the telecom industry. Executives at Intel Corp., a big WiMax backer, boasted that WiMax base stations to supply the entire city of San Francisco with broadband signals could be built for just $250,000. This may be overly optimistic, but is easy to understand the possible cost savings when you consider the installation of a handful of WiMax base stations compared to digging up streets and threading fiber-optic cables throughout the city.Sometimes the best strategy is to simply do nothing. Wait and see. Are people not buying houses in Truckee or opening businesses because of broadband issues? No. Why aren’t hundreds of communities in the United States investing $24 million in a broadband infrastructure? Many reasons. I just do not see the logic in the Truckee PUD’s rush to take such a huge risk on broadband. I’m not saying that WiMax is the answer, but I definitely think the PUD’s best strategy on broadband for now is to simply do nothing.Ryan McAfee is a Truckee resident, PUD customer and technology geek