1-gig Internet cities draw startups, but no stampede of users

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Posted: Sunday, May 12, 2013 12:00 am | Updated: 12:51 am, Tue Aug 5, 2014.

Omahans wondering what CenturyLink's new ultra-fast Internet service will do for the city's economy have a few other cities to look to for a sense of what's to come.

While it's too soon to say that the service has launched any large businesses or inspired any life-changing inventions, those working in “1-gigabit cities” say the seemingly unlimited bandwidth has attracted startups, invigorated entrepreneurship and retained businesses that otherwise planned to leave.

“We are just in the beginning stages of figuring out what you can actually do with it,” said Sheldon Grizzle, founder of the Company Lab, a business accelerator in Chattanooga, Tenn., where the city-owned electric utility launched 1-gigabit-per-second service in late 2010. “It will permeate every aspect of our lives when bandwidth is no longer an issue — and that's really exciting, and we're just now starting to scratch the surface of that.”

Being one of the first metropolitan areas where 1-gig service is available, he said, Omaha will have a head start when it comes to attracting and building out businesses that rely on an ability to get access to and share large amounts of data.

That's been the experience in Chattanooga, where the Company Lab's second annual GigTank starts Monday. At GigTank, high-tech startups from around the world will compete to spend the summer in the city developing their businesses, learning from mentors and networking with investors. One success story from last year's inaugural competition, a start-up called Banyan, relocated its headquarters to Chattanooga from Florida to build its business, a network that lets scientific researchers share information as they collaborate.

Banyan founder Toni Gemayel said working in Chattanooga was like a glimpse into the future.

“Eventually the gigabit will be everywhere,” he said. “How can we start designing today with the future in mind?”

After a summer of raising funds from investors, Banyan went home to Tampa but soon returned to Tennessee. The team had missed the sense of community and entrepreneurship.

“This is a city that has really reinvented itself as a hub for entrepreneurship, and businesses feed off that energy,” Gemayel said.

The same energy is crackling in the Kansas City metro, where Google Fiber lit up a residential neighborhood with 1-gig service in November. Since then, startups have competed to live for free in the venture-capitalist-owned FiberHouse and work among other entrepreneurs in what's called the Kansas City Startup Village, one of only two residential neighborhoods with the service so far.

A 3-D printing software startup, Handprint, has relocated to Kansas City from Boston to develop its product, which requires big bandwidth to upload and download data.

Co-founder Alexa Nguyen said the four-member team moved more for the tight-knit entrepreneurial community the fiber has helped foster than for the fast access itself.

Still, with the fiber, “Our daily work flow is significantly better.”

Omaha can even look to several small communities in western Nebraska, where a local fiber provider launched 1-gig service in March, beating Omaha by two months with no fanfare. Allo Communications hasn't had any customers buy its full 1-gig service yet; businesses say they are still figuring out how best to use the very fast 100- and 200-megabits-per-second speeds that Allo already offered. Even those relatively slower speeds are opening up new possibilities for places like Ogallala, Scottsbluff and North Platte by keeping companies in town that were considering a move out of state and by bringing young entrepreneurs back to town.

“We knew we couldn't continue to survive without the higher-speed services,” said Chad Adams, who was preparing to move his fourth-generation family-owned bank and 45 jobs from Ogallala to Fort Collins, Colo., before Allo brought its fiber Internet service to the city of 4,700.

CenturyLink launched its first 1-gig service Monday to 48,000 homes and businesses in an area of west Omaha that already had a fiber network thanks to the earlier Choice TV cable television service. The provider also is working with select businesses elsewhere in the city to connect them to the high-speed fiber network. Connection is available on an individual basis depending on location, as CenturyLink is still building out its fiber network around the city.

CenturyLink's announcement outpaced competitor Cox Communications, which in April started offering 150- megabits-per-second service as a free upgrade to customers who were paying for its top-tier package. Other packages also saw free speed upgrades, with the entry-level package speed going from 3 mbps to 5 mbps.

Cox said that unlike CenturyLink's top speed, its 150-mbps package is available throughout its service area, and the biggest businesses can arrange access to speeds of up to 10 gigabits per second.

Some tenants at the Mastercraft Building, which houses startup companies in north downtown Omaha, are lobbying to have CenturyLink connect 1-gig fiber service there, said Nick Bowden, a founder of MindMixer, one of the tenants. Bowden said his firm, which provides a platform for community and political engagement, such as hosting online town halls, hasn't had a speed problem with its current Cox service, but he wants to experiment with the possibilities of faster service.

“You don't realize how unbelievable it is to have that kind of fast bandwidth until you have it,” Bowden said.

Having 1-gig service is a big deal for the technology and startup communities, he said, not only for the value to their businesses but also because it's an important recruiting tool, and could further cement Omaha as a hub for startups.

“Our company can use this as a reference point for just how far the tech community has come in Omaha,” he said.

But even 1-gig users are still trying to figure out “What do you need a gig for?” said Aaron Deacon, managing director of KC Digital Drive, a joint effort of several Kansas City metro-area governments and groups. They've charged Deacon's team with executing a “playbook” of measures to make the most of being Google Fiber's launch site.

Deacon isn't worried that Kansas City is no longer the newest 1-gig city.

“Having more cities come on board sort of explodes the potential for what you can do with it,” Deacon said. He doesn't see it as a boutique offering in the long run. “This is a critical piece of national infrastructure over the next 30 to 40 years.”

Uses aren't limited to high-tech startups. Deacon said health care, education, the arts, government, libraries and neighborhoods in Kansas City all are part of the conversation.

“A lot of the work that needs to happen to really leverage the technology is social change rather than wired-network change,” he said.

Meanwhile, entrepreneurs are finding their own ways of using the service.

“There has been a huge amount of activity of people and companies moving to town,” Deacon said.

Website developer Ben Barreth helped make the influx possible when he bought a house in the first Google Fiber neighborhood and let startups stay for free for three months.

A founder of Handprint was one of the first residents, and when his term was up, he applied for and won a competition to be the first tenant in FiberHouse, another property in the neighborhood, owned by the venture capitalist Brad Feld. Now Handprint is among 19 startups at work in the Kansas City Startup Village.

Nguyen sees her neighbors daily and said the connections “help keep the energy up and the motivation going.” Making a lasting impact on Kansas City, though, will take more.

“We need startups that make it big,” she said.

Michelle Stephens of North Platte has proposed that a “hacker house” be opened there. Stephens, 33, is a North Platte native who returned to open her own company after working in city planning in Portland, Ore., and Abu Dhabi.

She created the POP Coworking space and would like to offer 1-gig Internet to young technology firms, to say, “Do what you're doing, but use our Internet.”

She's not sure what the result would be, having a hard time wrapping her mind around the possibilities.

“We're delivering Lamborghinis to everybody's house, but nobody knows how to drive,” she said. “Nobody knows what we need a gig for.”

Other western Nebraska companies and institutions are figuring out what they can do with Allo's high-speed fiber service. They say it makes life and work easier in practical ways.

Scotts Bluff County is using its bandwidth to run a video arraignment system, allowing criminal suspects to have court hearings without moving them from the county detention center. County employees also can use it to gain instant access to state child support and probation servers.

“We take it for granted the amount of connectivity we have,” said Chance Florke, the county's information systems director.

Bank owner Adams in Ogallala is grateful Allo took the risk. Now he can meet over videoconferencing with the bank's lawyers and accountants and send big documents quickly. Check processing is more secure because bankers have time to individually approve more transactions.

Adams envisions a day when a banker will process a mortgage for a rural resident entirely by video.

Shane Aulick's Scottsbluff trucking company is more efficient managing its fleet of 130 trucks thanks to fiber, Aulick said. From his office, he can stream live video images of his drivers delivering sugar beets and construction materials in Nebraska, Wyoming, Montana and the Dakotas. He can see how many trucks are in line, and what the employees are up to.

“It allows us to manage from afar. You can't hire enough good people,” Aulick said.

Dan Mauk, president and CEO of the North Platte Area Chamber & Development Corp., used to have a hard time following along with the state Legislature's live Internet stream. Now he can follow the hearings while also watching news and listening to Pandora.

In Ogallala, economic development coordinator Travis Haggard said there are about six companies that would not be competitive in their industries now without their fiber connection. He now lists fiber along with low utility prices and available land when trying to lure businesses to town.

“Their ears, they really perk up when I say that. 'Did you say a gigabit community?'”

Contact the writer: 402-444-1336, barbara.soderlin@owh.com

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