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U.S. Municipal Wireless Broadband Forecast

Public broadband networks planned by major cities and smaller municipalities could provide access to as many as six million homes within five years, predicts a new report from technology research and consulting firm Strategy Analytics.

Despite heated rhetoric for and against, municipal broadband will play only a small role in the rapidly growing U.S. broadband market, with incumbent telecom and cable operators still attracting the vast majority of consumers. This report projects that by 2010 about five percent of all US households, some six million homes, will be able to access broadband networks operated by cities, towns and other municipalities. But with prices for commercial broadband services continuing to decline, only a small number of households will be likely to rely on low-cost or free public networks as their primary source of Internet access.

"We expect a lot of consumers will supplement their cable or DSL service with municipal Wi-Fi, however they are not going to rely on it exclusively," says James Penhune, Director of the Strategy Analytics Broadband Media and Communications service. "Philadelphia and other large cities have recently announced plans to offer inexpensive Wi-Fi service which may be better than dial-up Internet access, but is slow compared to the DSL service that is only slightly more expensive and usually offers better quality."

"Instead of fighting municipal broadband projects, telcos and cable companies may be better off working with local authorities," suggests the report's author, Strategy Analytics Vice President of Applied Analytics, Tom Elliott. "Incumbent operators should be looking for ways to make money by cooperating with municipal broadband - not alienating local governments which may be able to help with more important regulatory issues, such as TV franchising or network neutrality."

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