The startup want to break the national network monopoly
Under the open-access model, Underline builds and operates a fiber-optic network that can be used by multiple service providers and provide services to customers. Residential service starts at $49 per month for 500 megabits per second connection, while gigabit connections start at $65 per month. That's much faster than the 25mbps benchmark the federal communications commission uses to define high-speed Internet service. Underline CEO Bob Thompson told Axios that the company chose Colorado Springs for its first project after evaluating several factors, including homes that lack Internet access, and the number of existing providers. Underline's project in Colorado Springs involves more than $100 million to build 400 miles of fiber optic and serve 55,000 homes and businesses.
Underline lists about 2,500 targeted cities, Mr. Thompson said. "These 2,500 communities have been neglected by the current government for years in terms of major infrastructure upgrades. They are often not compliant with the government's infrastructure bill." About 83 million Americans have only one option for their home Internet provider, according to a report by the Institute for Local Self-reliance, an antitrust think tank. The big picture: The open-access model is not new, but has recently gained traction, especially as the pandemic forces people to rely more on home Internet.
This summer, California passed a law to create a $6 billion state-owned open-access network that aims to connect communities across the state to high-speed Internet. West Des Moines, Iowa, is planning to use Google Fiber to pay the city for access to the network to build a pipeline network, but the project is facing opposition from local cable Internet provider Mediacom. Ernesto Falcon, senior legislative counsel at the Electronic Frontier Foundation, told Axios that UTOPIA, an open-access fiber-optic network in Utah, struggled financially in its early days, But the network has become a success story and continues to expand. Their think that as fiber demand increases, open-access fiber networks, already popular in Europe, could catch on in the United States, Falcon said.
Chris Mitchell, program director at the Institute of Local Self-reliance, told Axios: "I think we're seeing a different investment mindset emerging from investors investing in telecoms, and Underline is one of them." "More investors looking at Underline and saying, 'No, this is a good, long-term stable investment, I may not get all my money back in five years but in the long run. I will get good returns over a longer period of time.'" The sponsors of Underline include Case's Revolution Rise of the Rest Seed Fund, Powell Jobs' Emerson Collective, FinTech Collective, etc. David Hall, a managing partner of Rest's Rising Fund, said: "The cost structures of some of the big companies and the process of building this fiber are very different." And NCTA, the cable industry group, says its members are working to achieve speeds of 10 gigabits per second.
What next: Biden administration touted community-owned networks as part of high-speed Internet funding in its infrastructure push package. If approved, states would receive $42 billion for Internet projects that they could use to fund open access networks.