While Australian Internet advocates fret over the implications of a copper-based NBN, the nation’s biggest investment bank is making a bold inroad into the US broadband market.
Australia’s leading investment bank Macquarie Group has made a bold entry into the US broadband business, emerging as a direct competitor of Internet giant Google in the market for municipal Internet coverage.
The group’s infrastructure arm Macquarie Capital has inked a pre-development agreement with the ingeniously acronymed Utah Telecommunications Open Infrastructure Agency (UTOPIA), for the construction of a fiber network which will connect 150,000 homes, as well as all of the businesses situated in 11 cities.
The public-private partnership arrangement between UTOPIA and the Sydney-headquartered investment firm will mean that the inter-local agency will be able acquire its own fibre network without incurring the ire of taxpayers by saddling them with more debt.
As an inter-local agency, UTOPIA came about when its member cities in the Beehive state banded together for the purpose of jointly achieving a better Internet solution – in this case affordable broadband provided via an open-access network.
According to Jesse Harris of municipal fibre advocacy FreeUTOPIA!, the arrangement with Macquarie is far preferable to the deals made thus far by Google to bring broadband connections to US cities.
Under its contract with UTOPIA Macquarie will share revenue with the partnership, enabling member cities to discharge their prior bond debts, instead of adding to the debt burden on taxpayers.
The company will also invest around $2,000 in funds for each home and business premise in the 11 member cities, in what essentially amounts to a new buildout.
Upon expiration of the 30-year contract UTOPIA will be owner of the infrastructure and free of any further debt.
By contrast Google’s five-year deal with the city of Provo, also in Utah, will see it invest $18.7 million to extend network coverage to 35,000 homes, for a per premise cost of around $500.
The network will not be open access, and revenue will not be shared between Google and Provo. The taxpayers of Provo will also be left saddled with bond debt for the buildout, and because Google managed to wrangle an indefinite lease, they will never be owners of the infrastructure themselves unless the tech giant withdraws from the agreement.
Macquarie has also flagged ambitions to expand its presence in the US broadband market, with representative Nicholas Hann observing that “there is an opportunity to create a model for access to a citywide broadband network open to all service providers, which may be copied by cities across the country.”