NCLM Southern City Volume 71, Issue 2, 2021

SOUTHERN CITY QUARTER 2 2021 24 While beneficial for those communities, it also makes sense finan- cially. With these projects, they aren’t entering a crowded market, so their costly investment into infrastructure is less risky, even when charging reasonable access rates. No such sensible options exist in Washington, according to Coltrain. “Our method to all this madness with broadband is to try to equal- ize the cost by utilizing partnerships,” Coltrain said. “Washington is saying, ‘Well, we've got fiber assets we'd love to let you use.’ But we can't.” As a result, RiverStreet Networks is facing problems at both the county and city level. After winning an RFP from Beaufort County earlier in 2021, their first target was unserved rural areas outside of the municipal boundaries. Geography, though, dictated that lines would likely have to traverse the city, as Washington rests on the narrowest point of the Pamlico River. They needed to connect through the city, without being able to partner with the city. This is the first instance of running up against the legal restrictions. For this problem, there are a few options available to RiverStreet, though Coltrain admitted that there is almost no method to do so that makes financial sense. They could lease connectivity from the other private providers in the area, Suddenlink or Cen- turylink—an ‘A’-to-‘B’ connection called a “transport”—or through the nonprofit fiber provider MCNC, but both would carry a high premium. Or, and perhaps least cost effective, they could lay their own fiber lines. “If getting to the unserved area doesn’t make business sense, then they stay unserved,” Coltrain said. To serve citizens residing in the city, the problem is even trickier. They’d only have that final option—laying their own fiber even as Washington has unused capacity to meet the need. No alterna- tive illustrates the market-entry dilemma quite like this situation, because it means that if RiverStreet were to invest in physical infrastructure, the fiber lines they laid would very likely rest right on top of the public network already in the ground. “We might lay this fiber right beside where the city already has fiber sitting there—dark fiber, that's just sitting there,” Coltrain said. “So, you know, it's a waste of money.” Redundancy aside, that option has little hope of succeeding for RiverStreet, Coltrain notes, since market forces would react. Even if customers flocked to their business, it would be relatively cheap for the current providers at that point to then improve their service or reduce their current prices, and thus win customers back. This makes the venture too risky for a new company, so it becomes cost prohibitive. “We put ourselves at a risk to try to go in there and invest our capital,” Coltrain said. “It's not really in our business model.” The intervention, then, according to Christopher Mitchell, Director of the Community Broadband Networks Initiative at the Institute for Local Self-Reliance, would be a public one. It is to leverage the existing assets. continued from page 23 We just want to give citizens a variety of choices. The Broadband Market Failure The lack of competition is slowing down progress.