Strong Internet Demand From Many Corners Forecast at Incompas

LOUISVILLE -- Providers competing in broadband and companies that support them are projecting strong demand from consumers, businesses and government, they told Incompas Wednesday. Incompas CEO Chip Pickering recommended letting "every entrant enter this space because there is such a demand," especially rural. He called the push for ubiquitous deployment an issue "of national consensus" when there are few such issues to be found. "It's good to be in our business."

C Spire can tackle new technologies to deliver more broadband, said Chief Financial Officer Ben Pace. "We're looking at 5G," he said, though it's "not ready for prime time yet." He told us during Q&A the company is optimistic about the rural spread of 5G, but uses "aren't there yet," and clear standards aren't developed. The company plans to follow customer demand as it develops, and he noted even larger wireless providers are talking about 5G as a 2023 proposition. C Spire plans to be both a 5G network provider and to continue to partner with the bigger wireless providers that require fiber backhaul. Pace called 5G "a good technology for the future" that's "not completely ripe yet."

For a while, network infrastructure was viewed as a commodity, but that has swung back to recognizing core networks' value, said Mark Fahner, Cincinnati Bell vice president-corporate business development. The telco is gaining share in core businesses against cable.

Smaller provider funding options can be tough. Convincing private equity firms or small-town banks to invest in broadband can be a hard sell, said Phillip Deneef, GeoLinks chief strategy officer. "A lot of investors have shied away from the 'If we build it, they will come' model," he said, though evidence of strong demand can help. Monthly recurring revenue is defensible, especially in suburban and urban markets, he said, but investors have to understand that networks will take a couple years to build.

Government funding's an option, especially for providers that can bid for USF programs. Network builders without ISP businesses can partner with participants in programs such as the upcoming FCC Rural Digital Opportunity Fund, said consultant Carol Mattey. Smaller providers servicing neighboring communities might bid on unserved locations but need help deploying fiber during their expansion, she said. Likely candidates for such bidders include small ILECs, Mattey said.

Better broadband mapping can help direct USF support. "Broadband is critical, and without it, there's no cloud service," said Paula Boyd, Microsoft senior director-U.S. government and regulatory affairs. She said the company's usage data indicates about 49 percent of Americans are using the internet at broadband speed.

Preston Wise, special counsel to Chairman Ajit Pai, said that from the FCC's perspective, it's hard to tell the difference under current mapping reporting rules between lack of broadband availability and lack of consumer adoption. New mapping systems in the proposal stage will let the FCC separate that data, he said.

Cybersecurity and cloud services will be important to federal purchasers, said Pamela Hollick, CenturyLink associate general counsel. "We don't want to be locked into the old services, just on a new contract."