insight Municipal Broadband Strategy:

Beyond Wireless
Municipal leaders put millions of dollars at risk if they
rely solely on current wireless standards to satisfy their
constituents’ broadband needs. Having a portfolio of
options is a more prudent approach.
By Chris O’Brien, John Erik Garr, and Jack Rejtman

Municipal leaders should be commended for increasing their efforts to

provide constituents with wireless access. Those initiatives can provide
real value to citizens, businesses, police and fire departments and other
local stakeholders. But don’t be misled; deploying a wireless network
is not a broadband strategy. Governments must look beyond short-
term fixes and take a comprehensive approach to ensure multi-million
dollar investments in broadband networks truly address the issues of
affordability, access, mobility, capacity, and widespread adoption.
 Executive
Summary
“. . . alone, wireless networks
at best address only part
of the problem . . .”
For more information contact:
Chris O’Brien, Partner, Public Sector Practice
Chris.obrien@diamondconsultants.com
2
Frustrated by uneven access to broadband
in their cities and fearful of falling behind
international competitor cities offering faster
speeds at affordable prices, nearly
450 U.S. metropolitan areas are building
or planning municipal wireless networks.
Policymakers and government executives are
caught between a compelling public
interest to expand broadband access and
a telecommunications industry struggling
to do so profitably.
The public pressure is clear. Editorial pages
are full of commentary on the role that
government needs to play in building
the proper technical infrastructure to
attract the high wage jobs of the future
and to promote equitable access to the
infrastructure for downtown office workers
and neighborhood residents alike.
Legislators are also getting into the act,
passing state laws and local ordinances
mandating broadband standards. The
evidence is on their side, as studies have
shown improved broadband access
and affordability is linked to economic
growth and improved quality of life.
Less clear is what a municipality can do
to work with the range of technology
providers to manage this pressure. Local
governments are used to making major
infrastructure investments in stable
technologies like roads, rail systems, and
airports with solid business cases that
offer substantial long-term paybacks. The
current state of the telecommunications
industry, however, provides no safe harbor,
as new technologies hit the market in
months instead of years, with business
models changing just as quickly.
Diamond commends cities such as
Philadelphia, Chicago, and San Francisco for
boldly introducing major public wireless
efforts and agrees that critical components
of a city’s economic and cultural growth
should not be left to market whims. Diamond
believes that wireless networks can be
an effective component of a government’s
overall approach to improving connectivity
within its jurisdiction. But alone, wireless
networks at best address only part of
the problem and at worst will be unable to
meet consumer bandwidth demands
by the time they finally come on line. Many
municipalities may miss the market and
end up building a dirt road where an eight-
lane highway is required.
To strike the right balance, local policymakers
should approach broadband infrastructure
as they do the development of roads or
airports: Begin with constituent needs and
develop a portfolio of initiatives, including—
but by no means limited to—those that
improve wireless coverage and will provide
the best long-term payback, while avoiding
the seduction of short-term investments that
make good headlines but only chip away
at the problem.
 Defining the
Problem
“. . . many government
executives find themselves
with initiatives in flight
before correctly understanding
the problem they are trying
to solve. . . .”
The United States has no meaningful federal
broadband policy; consequently, state
and local governments are driving municipal
broadband initiatives, often without
fully understanding the needs of their
communities. As a result, many policymakers
have bitten off large infrastructure
investments without being able to answer
the most fundamental questions: What
problem are we trying to solve and what
is the best way to solve it?
So far, the municipal broadband market has
been long on press releases promising major
benefits and short on delivery. Due to the
enormous pressure from interest groups, many
government executives find themselves
with initiatives in flight before correctly
understanding the problem they are trying
to solve. In many cases, the lack of a
clear and compelling definition of the problem
and hard data to support it has created a
vacuum into which providers and activists
have presented competing pictures of reality.
The resulting disagreements have created
confusion and stalled momentum.
In our view, many municipal network
initiatives fail before they begin because
policymakers have not decided which
problems they are trying to solve and have
further neglected to tailor specific solutions to
the unique set of problems they face. In
Diamond’s experience, there are three compelling
reasons for municipal investment in broadband
initiatives, each with very different
technology options, business cases, and
associated investments.
Problem 1:
Digital Inclusion
Access to technology is as essential in the
early 21st century as access to electricity was in
the early 20th century. Technology in general,
and the Internet in particular, have changed
the way people work, learn, heal, entertain,
socialize, and organize. Broadband networks—
both wireline and wireless—now connect
people to essential tools. Citizens without
affordable broadband access increasingly will
fall behind economically and socially.
This digital divide is found throughout U.S.
rural and urban areas where too
many individuals lack access to even basic
broadband networks. Even those with
access often pay premium fees for sluggish
service. With respect to broadband,
the digital divide in reality comprises two
separate problems. The first is that certain
geographies have limited access to high-
speed networks, due to underinvestment
by providers or aging physical plants.
The second problem is one of adoption,
which is driven primarily by affordability
and awareness, and it can affect segments
of individuals across geographies. Both
of these problems are real and often related,
but they require different sets of solutions.
Right or wrong, delivery of U.S. broadband
largely has been left to the private sector.
This has left major U.S. cities and other
municipalities in a position where a critical
enabler of economic growth in their
jurisdictions is somewhat out of their control.
No jurisdiction is the same, and some
citizens face a competitive market with broad
access, a suite of options, many at reasonable
prices, while others face a monopolist
service provider restricting supply and keeping
prices high. To make matters worse, most
municipalities lack reliable data on which
situation they are in, and how that situation
changes from neighborhood to neighborhood.
For example, some neighborhoods may
have plenty of options and require no
dramatic municipal intervention. For roughly
$35, residents in these neighborhoods can
choose between one of several broadband
services, with costs falling and service
quality increasing as providers innovate and
compete for business. Just a few miles
away, other neighborhoods can present a
3
 completely different situation, with only one
carrier offering service and limited innovation
in service quality resulting from the lack
of competition. To further complicate matters,
economically disadvantaged residents may
encounter difficulty affording broadband, no
matter which community they live in.
Addressing the digital divide requires
knowing where these geographies
and populations are located. Unfortunately,
policymakers lack reliable data on access
and affordability within each neighborhood.
Indicators such as income and education
level are poor substitutes for reliable data
on coverage. Many municipalities that
lack this data will end up over-investing in some
neighborhoods and under-investing in others.
Problem 2:
Economic Development
Many municipal broadband efforts are
focused on creating an attractive
environment for the service and high-tech
industries that have transformed cities
like Austin, Texas, and Seattle, Wash., over
the last two decades. It is clear that all
businesses, but especially those relying on
knowledge workers, depend heavily on
network infrastructure and other technological
support structures. Pressure from abroad
also comes into play. Major U.S. cities are
increasingly at risk of losing companies
in bandwidth-intensive industries such as
financial services and biotechnology to
foreign cities with faster digital infrastructures.
Increasingly, the United States is falling
behind Europe and Asia, where leading
countries have established national
broadband policies and have spurred
investment in core fiber infrastructure.
Another version of the economic development
argument draws from the theory of a
Creative Class City, popularized by Richard
4
Florida in his 2002 book entitled The Rise
of the Creative Class. The notion presented
holds that cities must grow innovation-
based industries, and that young, talented,
creative workers are the fuel that drives
these industries to thrive in the manner of Austin
and Boston. Mr. Florida argues convincingly
that in order to attract creative-class workers,
governments should seek to cultivate a
thriving culture and quality of life. Some
have extrapolated from this theory to argue
that creative-class workers, such as lawyers,
writers, musicians, and high-tech entrepreneurs
depend on high-bandwidth networks to
share their ideas and, as such, governments
have a compelling interest to act.
“Building networks is extremely
complicated and they are
often out-of-date before they go live.”
Feeling these pressures, many U.S. cities
are acting, but the question is: If you build
it, will they come? In our view, that
depends on whether you build something
that will meet the demands of these
bandwidth-starved companies and individuals.
Unfortunately, too many cities have built
their broadband strategies around
technologies such as Wi-Fi, which alone
are ill-suited to meet this demand. In
addition, infrastructure is only one tool for
attracting creative workers, and should
be bundled with other investments if a city
hopes to foster this type of development.
Problem 3:
Improving Government
Communications
Since the terrorist attacks of Sept. 11,
2001, governors and mayors have woken up
to the need to improve the way their
employees communicate with their constituents
and other government workers within their
jurisdictions and across others.
For example, Chicago is one city that has
installed cameras with gun-shot detection
capabilities and have implemented
sophisticated crime-modeling and analysis
tools to stay one step ahead of the
bad guys. The problem for governments,
however, is that the majority of their
law enforcement workers are not tethered
to wired connections at their desks, and
there is no reliable, commercially available
network to safely and reliably stream
the massive amounts of video, voice, and
data content to mobile workers in the field.
In response, many municipalities have
undertaken efforts to build their own
wireless networks that allow them to better
share data. Unfortunately, building these
networks is extremely complicated and they
are often out-of-date before they go
live. Some cities, relying on rosy promises
of technical capabilities from vendors,
have found that these networks, once
constructed, are no more reliable and offer
little additional capacity than the
commercial networks they were designed
to replace.
In reality, most jurisdictions enter into
municipal wireless initiatives with the
best intentions of solving each of these
problems—and to be sure each of
these problems is worthy of solving. But
addressing all of these problems with
one approach is a recipe for disappointment
and might even cause the city and its
residents and businesses to be left behind
while others modernize their information
infrastructure to support the jobs and
lifestyles of the future.
 A Call To address these challenges, Diamond
to Action recommends the following essential steps:
Build a Fact Base
City officials would not think of investing in
roads or bridges without first considering
basic information concerning existing
infrastructure availability or future demand.
But with broadband investments,
policymakers have been forced to invest
with little or no information.
Cities and states need data to understand
what problems they must solve with
broadband solutions, and this information
can be difficult to come by. Data on
broadband access is incomplete at best
and useless at worst. Broadband providers
often make broad statements regarding
coverage but are unable or unwilling
to provide specifics. At the national level,
the Federal Communications Commission
still defines a high-speed connection
as 200 Kbps—a measure set last decade,
when the dial-up modem was the dominant
Internet access technology. In addition,
the FCC methodology for tracking high-speed
access and penetration considers an entire
zip code covered if only one broadband
subscriber is connected. As a result, cities
often must make policy decisions based
on subjective views of broadband coverage,
ranging from bold provider reports to
activists’ bleak assessments. The resulting
confusion is a roadblock to achieving
consensus. Disagreements regarding the
current state of broadband weaken
momentum and diminish the case for action.
In the same way cities and states analyze
data before investing in roads and bridges,
they should seek data to understand which
neighborhoods have the greatest need for
broadband. Gathering this data is difficult but
not impossible, and Diamond has developed
tools to help cities identify—down to the
block level—what infrastructure exists and
where coverage gaps remain. The key is to
focus on four layers of data:
• Broadband Infrastructure: The fiber,
central offices, and cable that carry data;
• Address-Level View: An address-by-
address assessment of broadband options
and pricing;
• Demographic Data: Data on who lives
at these addresses, including income
levels, educational attainment, and number
of small and large businesses; and
• Qualitative View: Data concerning
the perceptions of consumers regarding
broadband availability, quality, and
affordability.
With this data, cities can understand their
current broadband environments and how
they are positioned to meet future needs.
Policymakers can gauge the magnitude
of the digital divide and target solutions
appropriately. They also can identify the
degree to which broadband infrastructure
will support economic development goals.
This analysis provides an unassailable fact
base that is essential to understanding needs,
creating consensus, directing investment,
and managing results.
Define a Strategy and Portfolio,
Manage Investments
In our experience, the fact base will
demonstrate that certain geographies are
well covered while others have severe
gaps. Additionally, it will show exactly which
population or economic segments face
adoption challenges. Armed with a robust
fact base, policymakers can create an
overall strategy that includes a portfolio
of initiatives, each of which is targeted
at a specific portion of the problem.
Unfortunately, too many governments
view the decision to simply construct a
5
 wireless network as a broadband strategy;
it is not. Governments must define more
comprehensive broadband strategies to ensure
the important aspects of affordability,
access, mobility, capacity, and adoption
are addressed. In South Korea, for example,
the government set a goal of establishing
state-of-the-art networks that provide fixed
and wireless access for anyone, anywhere,
at reasonable costs. Such a vision required a
bold commitment to a portfolio of initiatives,
and the results are compelling: In Seoul,
89 percent of households enjoy broadband
speeds up to 100 Mbps for $30 or less
a month—that is about 80 times faster and
30 percent cheaper than in the United States.
In our view, wireless technologies can be an
important part of a broadband portfolio, but
cities that solely rely on wireless solutions
will almost certainly miss the mark. Wireless
networks are being touted as a “silver bullet”
solution to solve many problems related
to mobility, affordability, access, capacity,
Portfolio of Options
Value to the Community
Figure 1
6
and adoption. But in reality, wireless
networks only address some problems.
We have major concerns that wireless
networks will not be able to meet emerging
bandwidth demands. Based on an analysis
of growing application bandwidth demand,
Diamond projects that within the next
five years, capacity requirements will rise from
their current level of 1 to 5 Mbps to more
than 100 Mbps. The explosion of bandwidth-
intensive applications, especially those
with video-based content, will place
a near-term strain on broadband delivery
networks. Municipal wireless networks
alone cannot meet this demand. In fact, fiber
to the premise (FTTP) is the only existing
or emerging technology that can achieve this.
Cities that craft broadband strategies solely or
largely based on Wi-Fi or WiMax networks risk
building a white elephant that will not be
able to keep pace with exploding bandwidth
requirements and will support only a very
limited range of applications.
High
Funding Priority Fund Selectively
Difficult to execute
Fund Selectively
Low priority
Low
Low
Risk
Joe Mambretti, director of Northwestern
University’s International Center for Advanced
Internet Research, said many U.S. cities
mistakenly plan to rollout wireless in lieu of fiber
infrastructure. “Wi-Fi won’t solve their core
problem, Mr. Mambretti says. “The lifeblood
of the cities, medium to small businesses,
requires true broadband.”3 Mambretti estimates
that within five to 10 years, U.S. governments
and businesses will require download and
upload speeds more than 1,000 times greater
than what is available today.
Diamond urges cities and states to manage
their broadband portfolios much like
smart investors balance investments between
those with a sure return, those with
moderate risk, and those that could yield
breakthrough results—albeit at significant risk.
The weighting of this portfolio largely
will depend on facts. But we believe most cities,
as stewards of the citizens’ money,
should favor stable, long-term investments.
Unfortunately, wireless networks do not fit
Do Not Fund
High
 this definition. With that in mind, cities
should balance investments in these
technologies with programs that offer a
more stable, reliable stream of benefits.
While governments can make many
investments to improve broadband
access, typical investments fall into the
following categories:
• Direct or Indirect Investment in
Infrastructure: Cities can construct their
own broadband infrastructure or facilitate
third-parties constructing it on their
own, either on a large scale or on a more
targeted basis;
• Governance and Market Influencing:
Cities can use their leverage over
carriers and other providers to steer
them toward providing greater service
either through regulation (franchising)
or other means;
• Subsidies: Cities can provide direct
or indirect subsidies to defray broadband
cost for consumers or businesses;
• Demand aggregation: Cities can help
buyers pool their needs to attain greater
buying power; and
• Adoption Campaigns: Cities can
educate businesses and residents about
broadband benefits.
In Diamond’s view, U.S. access problems
are multi-faceted and can only be solved
with a portfolio of initiatives. To meet near-
term capacity demands, municipal wireless
initiatives should be supplemented with plans
Endnotes
1
Vos, Esme. “August 2007 Update of wireless cities and counties in the US,” MuniWireless, http://www.muniwireless.com.
2
“Top 25 Countries in Household Broadband Penetration.” Point Topic, April 2007.
3
Mambretti, Joe. Interview held with Diamond, March 2007.
that encourage development of fiber to the
premise. Governments also should carefully
explore programs that target specific
geographies and populations that hard data
show are underserved. Most importantly,
all initiatives should tie to measurable
objectives so progress can be tracked.
A comprehensive strategy and portfolio of
broadband initiatives is necessary for success,
but alone is not sufficient. Many governments
have faltered in translating broadband
strategy into fully implemented programs. In
our experience, a leading cause of problems
is the popular but misguided business model
in which the vendor building and paying
for the network manages rollout. This model
intellectually appeals to governments, many
of which have struggled to effectively manage
large infrastructure programs and believe the
private sector can do it better. But cities should
be wary of handing over full control, because
private sector incentives often are at odds with
the public interest.
While cities may not directly invest taxpayer
money, their leaders invest political capital.
Failure to deliver on promises made to citizens
can be costly, and potentially disastrous.
Cities should manage these initiatives as
if their own money were at stake, with
comprehensive program management and
oversight to ensure key benefits are achieved.
Governments need smart, experienced,
and objective advocates on their sides as
they manage large-scale municipal broadband
initiatives. These advocates may be
permanent employees, consulting partners,
or independent resources selected by
the government but funded by the network
provider. In any case, they should be selected
based on their ability to craft a project plan;
mercilessly manage deadlines, resources,
and risks; monitor the delivery of promised
benefits; align community, government,
and private sector stakeholders; and oversee
compliance with contractual and other
terms. The importance and scope of these
responsibilities should not be underestimated.
And they certainly should not be left solely
to the network partner.
Conclusion
Large-scale municipal broadband networks
have the potential to transform U.S. cities.
Successful deployment will enable continued
growth of an innovation-based economy
and expanded educational, employment, and
recreational options for all citizens, regardless
of income or geography. Failure could
mean citizens and businesses will fall behind
in the global economy. Unfortunately,
current wireless efforts are unlikely to drive
this transformation if not linked with a
broader portfolio of initiatives.
Forward-thinking policymakers will
begin by assessing the unique broadband
requirements of their businesses and
residents. Supported by a solid fact base,
they will then formulate and execute
broadband strategies—carefully managing
a portfolio of initiatives and vendors to
address their communities’ short- and long-
term needs.
7
 About the Firm Diamond (NASDAQ: DTPI) is a management and technology consulting firm. Recognizing
that information and technology shape market dynamics, Diamond’s small teams of experts
work across functional and organizational boundaries to improve growth and profitability.
Since the greatest value in a strategy, and its highest risk, resides in its implementation,
Diamond also provides proven execution capabilities. We deliver three critical elements to
every project: fact-based objectivity, spirited collaboration, and sustainable results.
To learn more visit www.diamondconsultants.com.

About the Authors Chris O’Brien is a Partner in Diamond’s Public Sector practice. Prior to joining Diamond
in 2006, Chris was appointed to the cabinet-level position of Chief Information Officer for
the City of Chicago by Mayor Richard M. Daley in 2000. Chris has been named one of Crain’s
Chicago Business’ “40 Under 40” and one of Government Technology Magazine’s “Top
25 Doers, Dreamers and Drivers.” He was also awarded the Chicago Software Association’s
2004 Spotlight Award as leading CIO in the Chicagoland area and he led Chicago to five
consecutive top-five showings in the annual Digital Cities study.

John Erik Garr is a Partner in Diamond’s Public Sector practice, with a proven track record
advising some of the world’s top companies and government agencies on strategic and
operational issues. His clients range from global investment banks to state government and
large not-for-profits, and his areas of expertise include strategic planning, sourcing strategy,
and market development.

Jack Rejtman is a Manager at Diamond. He has led strategic planning, market analysis and
execution of complex, global technology projects for Fortune 500 companies. Prior to joining
Diamond, Jack was a Technology Columnist, Business Writer and Municipal Reporter for The
Miami Herald, where he covered the South Florida Internet community and statewide efforts
to establish a network access point in Miami.

Diamond consultants Neil Harrison, Hedy Moolenaar, and Ed Fostveit also contributed
to this report.

Diamond
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