Broadband Blindness Documentary

A new documentary from California explores the failure of the private sector and competition more generally to sufficiently invest in fast, affordable, and reliable access to the Internet.  It comes in three parts and runs about 25 minutes in total.  

This provides a good summary of the present broadband landscape and how AT&T, Comcast, and other major providers are not the answer to our increasing need for better connections to the Internet.

 

History of Monticello and TDS: Be Wary of Incumbent Providers

I recently stumbled across some interesting pieces of information between Monticello and telephone-incumbent TDS when the Minnesota City decided to build a city-owned next-generation FTTH network after TDS refused to upgrade its services.

I found a pdf of a flyer that community-broadband supporters used in support of the referendum mandated by Minnesota state law because Monticello would be offering telephone services. The city needed the support of 65% of voters, a unique barrier in Minnesota not found in other states.

The city did go on to win the referendum on September 18, 2007, by a significant margin despite some opposition, much of it based on lies and wildly inaccurate claims. However, Monticello did not see as much opposition as others, like Longmont in Colorado.

After the City began moving forward with the network, TDS filed a frivolous lawsuit in 2008 to delay the project for a year while it began significant investments in its services to ensure it could compete with the new publicly owned network.

Despite being sued purely for anti-competitive reasons by TDS, the City nonetheless reached out to its soon-competitor to cooperate by sharing conduit in some places in town. Such cooperation would lower the costs of both parties and TDS had previously stated it wanted to cooperate with the City where possible.

City Administrator Jeff O-Neil sent a letter to TDS asking if it would cooperate [pdf]. A snippet:

At its July 14 City Council meeting, the Council authorized Monticello City staff to actively seek opportunities to work with TDS in development of cooperative, time-saving strategies for installing fiber optic lines in the City right-of-way. We believe there are opportunities to significantly reduce costs for both FiberNet Monticello and TDS by installing portions of the two systems on a joint basis, involving common conduits rather than separate conduits. Moreoever, at certain locations, space in the right-of-way is at a premium. By merging installation, more space would remain available for future use, and there would be more "elbow room" for maintenance and report of all utilities in the vicinity.

The City Council is optimistic that TDS will also see the value of this approach. That optimism is based in part on past statements by TDS or those working for it. This opportunity had been discussed at the the engineering level by the system designers of TDS's system and City staff and consultant. TDS has recently made public statements that it would like to work with the City in a cooperative fashion.

FiberNet Monticello

TDS ignored the letter, leading to a followup letter from the Mayor [pdf], which reminded TDS of one of its past statements:

We remember the statement that TDS made to the City when responding to the City's Request for Proposal, that "TDS Telecom always welcomes the opportunity to work with other utilities or the city during the construction process to share space in buried facilities to minimize costs, disruption, and deployment timeframes." TDS' refusal to even respond to precisely that kind of proposal from the City certainly contradicts that assertion. It also calls into question the sincerity of the statements made by TDS officials and public-relations representatives about their interests in working cooperatively with the City. It also provides a clear answer to members of the community about which entity is responsible for the inefficiencies that will result when both TDS and the City end up unnecessarily digging up the same asphalt, grass and soil twice.

But, as reported by the Monticello Times, TDS declined to cooperate [pdf]. TDS claimed that to cooperate would be "anti-competitive and likely raise significant antitrust law and substantive policy issues." This is an absurd claim -- but no less absurd than the grounds for their lawsuit against the city. TDS goes on to encourage the City to give up on its FiberNet Monticello plans, as if TDS would continue investing and keeping rates affordable in the absence of competition that only the City was interested in providing.

The lesson for communities is clear: you can try to work with big absentee-owned incumbent providers, but don't be surprised when they lie and obstruct what is best for the community rather than cooperating. They exist to pull as much revenue out of the community as is possible and have no interest in doing anything that could result in more competition for residents and local businesses.

B4RN Expands Community Broadband in Rural England

One of our kindred spirits across the pond reached out to me after I wrote about Vermont's self-funded community network. The B4RN initiative, Broadband for the Rural North, has launched using a coop model that will offer 1Gbps connections to everyone in the covered territories.

The business plan is available here.

Broadband for the Rural North Ltd has been registered as a Community Benefit Society within the Industrial and Provident Societies Act 1965 (IPS), and is controlled by the Financial Services Authority. Shares will be issued to provide funding for the project and members of the community will be encouraged to subscribe to the share issue. The share issue will comply with the Enterprise Initiative Scheme established by HMRC to encourage individual share holdings in new and developing companies. Under certain circumstances investors could reclaim 30% of the value of shares produced.

As a community company, the project will be funded and to a greater extent built by the community for the community. Our ambition is to keep expenditure, where possible, within the community. In addition to purchasing shares, the community will have the opportunity to “purchase” shares in exchange for labour and materials during the project build.

The initial share offer will be £2,000,000 of shares with a face value of £1, to be launched in late 2011 and open for 1 year. The project is expected to commence on site in early 2012 and completed by the year end. The initial network will be progressively added to over subsequent years until approximately 15000 properties in adjoining rural parishes are completely connected to the FTTH network.

To keep costs low in their rural areas, B4RN will be taking a non-traditional approach:

B4RN image

B4RN will adopt a different approach; we will lay the duct not on the highway but across the farmland on the other side of the wall. Digging a narrow trench and installing a duct within it is dramatically less expensive across private farmland than along the highway. The work can be done by agricultural workers and the farmers themselves; it’s not high technology, similar to laying a simple water or drainage pipe which they do all the time. The combination of lower cost labour and simple installation without the regulatory burden of the street works act and similar impediments results in a dramatic reduction in cost per metre installed. Of course the costs of the materials will actually be rather higher than those paid by telecommunications companies due to our smaller scale of operations; however this is much more than offset by the reduced laying costs. Where necessary we will use the highways but this should be for a small proportion of the duct length, mainly for road crossings and short sections where the farmland is either not available to us or unsuitable. We will be applying to OFCOM for Code Powers to permit us to do this in the same way as any other telecommunications company.

The big problem is that for this model to work the land owners must be prepared to grant free wayleaves to lay duct across their land. Clearly they would refuse to do this if the applicant were a traditional telecommunications company out to make a profit, but if it were a community owned cooperative run for the benefit of the community the story is different.

They are looking for a very ambitious take rate - on the order of 80% in year 4.

They have been receiving a lot of press coverage, which should help in their efforts to sell the shares in the network necessary to finance it.

Design Principles from Virginia's nDanville Open Access Network

The nDanville network of rural southern Virginia has long been a favorite of ours (previous coverage is available here). The network has helped Danville go from being notable for having the highest unemployment rate in Virginia to being ranked as the third top digital city in the nation, according to a recent article.

Danville's City Manager was honored by the Southern Piedmont Technology Council for developing the nDanville network:

Danville City Manager Joe King received the Chairman's Award for his leadership in advancing the development of a modern telecommunications infrastructure in the region, a key factor in Danville's economic development renaissance.

King had been the director of the city-owned utility when it drew up plans for a fiber-optic network to be built incrementally until it could connect every home, business, and community anchor institution in Danville Utility's territory. At the time, Danville was suffering tremendously from the loss of tobacco and textile industries.

Today, the nDanville net-work connects hundreds of businesses, has sharply re-duced costs for local gov-ernment, health care provid-ers, and local schools, and has introduced more competition into the telecommunications marketplace.

Danville Utilities has 44,000 electric meters, half of which are located in Danville (44 sq miles). The others are scattered across over 450 sq miles surrounding the city. The Southern Piedmont Technology Council serves the technology industry in Danville as well as nearby counties and another city.

Even in 2004, many in Danville did not have broadband access to the Internet, as outlined in an early document explaining the network. Verizon barely offered DSL and Adelphia offered limited cable modem service.

Andrew Cohill, a consultant assisting the project, has offered more background in a recent article of Broadband Communities. In it, he notes that the network was a piece of a larger strategy of investment in the community to develop local expertise in technology.

Danville was the first municipality to deploy a fully automated, Layer 3 open-access network; nDanville, with more than 135 miles of fiber, passes more than 1,000 business locations, including every parcel in all five business parks. Current customers have access to 100 Mbps fiber connections capable of delivering a wide variety of services, and 1 Gbps and 10 Gbps connections are available upon request.

And as we noted back in August, the network is starting to connect residents in a pilot project starting with up to 500 homes.

The network is profitable, connects over 150 businesses, and is creating significant economic development.

An interesting resource that Andrew shares are the principles behind the network. Communities just starting to consider a community broadband network may want to adopt a similar statement of principles.

  • Universal access: The long-term goal of the project is that every business and home should have the same level and quality of service. This commitment supports the open-access business model by aggregating the largest possible number of potential customers for service providers.
  • Level playing field: Every service provider should be able to play by the same rules. nDanville has a single public price list available to all providers. There are no special deals or unpublished rates.
  • Public-private partnerships: City investments in broadband infrastructure should create private sector business opportunities. The city sells no services to businesses or residents.
  • Multiservice network: nDanville is an open-access network that supports multiple providers and a wide variety of services well beyond the traditional triple play to create true competition and lower prices.
  • Symmetric bandwidth: The availability of services offering affordable symmetric bandwidth was viewed as critical to the economic revitalization of Danville. Any transport service requested by a provider can be configured with equal upstream and downstream data capacity to support business- class services and applications. This early decision is now becoming increasingly important with the rapid increase in the use of business videoconferencing, which requires symmetric bandwidth to perform adequately.
  • Unlimited bandwidth: Another early design goal was that any home or business should have the capacity to use any service needed to compete in the global economy. nDanville’s active Ethernet fiber network offers 100 Mbps, 1 Gbps and 10 Gbps connections as standard, and DWDM lightpaths are available on request.

Some of the high profile economic development achievements include an Ikea plant and the expansion of CBN Technologies, which produces secure identification documents. While Ikea and CBN did not choose Danville solely for the publicly owned fiber-optic network, they rely upon it and almost certainly would not have picked Danville in its absence.

Vermont Network Takes Local Ownership to Next Level

Vermont's East Central Fiber-Optic Network (ECFiber) has finished its second round of financing. We noted that the network had exceeded its financing goals at the beginning of this year by raising over $1 million and subsequently began connecting rural homes with its next-generation network. (See all of our ECFiber coverage here.)

The network is now connecting 120 households, a bit below its goal of 164 for the end of the calendar year... but it also had to deal with an unexpected hurricane (Irene) that seriously disrupted the entire state and kept fiber-splicers running ragged.

ECFiber has just completed its second round of financing. While the first round was dominated by a few major investors, the second round had a broader base -- a sign that many in the community have embraced the approach. From the ECFiber press release:

ECFiber is using an innovative funding method to extend its network, supported by local citizens who lend funds that enable build-out to local neighborhoods within and across member towns. Citizens who invest as little as $2500 allow ECFiber to reach all households along designated routes. ECFiber determines where it will build by choosing routes that reach the greatest number of unserved businesses and households, which are then connected to ECFiber’s state-of-the-art fiber-optic service.

These people are literally investing in themselves. ECFiber is an InterLocal Contract with a Governing Board composed of a representiative from each member town (of which there are 23). Investors are purchasing tax exempt 15 year promissory notes that effectively earn 6% interest (due to the one year holiday from interest and principal).

They have raised $340,000 in this round of financing, which will allow the network to pass 60-65% of Barnard's 950 residents. Spokesman Bob Merrill said the network again surpassed its expectations of investor interest and noted that several neighborhoods came on board after one or two interested residents rallied neighbors to invest so they could finally have high-speed connections to the Internet.

The network remains committed to connecting every person in the 23-town area but absent outside financing, it will take another 10 years.

EC Fiber is offering telephone services and Internet access. Though the network does pass some areas where people already have service, ECFiber remains focused on the unserved areas. People in unserved areas presently have to deal with dial-up (over neglected phone lines owned by FairPoint) or satellite connections.

The November-December newsletter offers more details about the network, including the extended battery options that ECFiber offers that will extend the time phones will work in the event of an extended power outage. (FTTH networks do not supply their own power, as do copper telephone lines.)

ECFiber's services and pricing sheet is available here. The prices are higher than those typically found in metro areas, which reflects the higher cost (but not unmanagebly so) of building network in these areas of extremely low density.

Community Broadband Policy Fellowship - Young Elected Officials Network

The Young Elected Officials Network has announced a one year fellowship working on community broadband. Applications are due on January 4.

The Young Elected Officials Network is looking for an outstanding candidate for a yearlong Community Broadband Public Policy Fellowship starting early January 2012. A program of People For the American Way Foundation, the Young Elected Officials (YEO) Network is an organization that works to unite and support progressive elected leaders between the ages of 18 and 35 who share a passion for building communities that reflect the values of freedom, fairness, and opportunity. Located in Tallahassee, FL and Washington D.C., the YEO Network supports and equips members as they define issues, develop solutions, and respond to the needs of their communities. Through policy and research assistance, skills and issue training, personal and professional development, and meaningful networking opportunities, the YEO Network is working to transform the political vision of our elected leaders into progressive action.

The YEO Network Community Broadband Policy Fellow will work in our Washington D.C. office, for 1 year, and will work to expand community broadband initiatives through strategic outreach and support of our YEOs around the country. Serving as our resident expert on broadband access and digital equality issues, this Fellow will also provide support in the research, development, exchange, and dissemination of other policy resources from diverse issue areas. The YEO Network Community Broadband Policy Fellow position is expected to work no less than 25 hours a week and comes with a paid hourly wage.

We look forward to working with whoever the YEO Network brings on board and look forward to having some more energy in the community broadband space.

AT&T Abandons Wireless Consolidation Attempt

It is hard to avoid becoming cynical when watching the federal government interact with big corporations like AT&T. So when AT&T announced it would merge with T-Mobile, giving AT&T and Verizon a combined 3 out of 4 cellular subscribers, I thought two things:

1) What a terrible idea. Higher prices, fewer jobs, less choices, etc.

2) The Federal Government will likely not prevent it - instead opting for some minor concessions that no one will bother to enforce.

Sometimes, it is very good to be wrong.

Cecilia Kang of the Washington Post, decodes the language from Wall Street to explain the biggest winner from the federal government blocking the merger: consumers.

“Without the combination, we think the wireless industry will be further weakened by continued hypercompetitive activity, particularly regarding subscriber acquisition costs,” said Nomura Securities analyst Mike McCormack.

That means customers can still get lower rates as the industry competes for their dollars. T-Mobile, for example, will continue to be a low-cost competitor, according to consumer advocacy group Consumers Union. A survey showed that data plans from T-Mobile were $15 to $50 less per month than those offered by AT&T.

An excellent reminder that what is best for Wall Street is not what is best for the 99%. Big companies like AT&T find competing for customers a hassle that lowers their profits -- they consider a market with four sellers to be hypercompetitive. In wireline, they have acquiesced to the "competition" of two competitors -- cable and DSL.

This is one reason communities build their own networks -- the private sector is not truly competitive when it comes to ISPs and most communities have no prospect real of improvement absent a public investment.

But we should rejoice in this victory -- because we earned it. Without the hard work of many grassroots groups, it is hard to imagine the Department of Justice or FCC standing up to such a powerful corporation.

Some quotes from some of the many organizations responsible for protecting the 99% of us who don't benefit from higher prices and fewer choices.

Andrea Quijada of the Media Literacy Project:

“The end of AT&T’s campaign to eliminate mobile competition and jobs is a gift to working class New Mexican families this holiday season. However, we know that this decision was not the result of AT&T putting people before profit. This result was won by media justice advocates and our allies in New Mexico and nationwide. Though we are certain this is not the last we’ve heard from AT&T/T-Mobile, we want to take a moment to acknowledge this victory for consumers.

The National Hispanic Media Coalition spoke out against the merger and celebrated its demise:

"AT&T has finally accepted that its bid for T-Mobile has run its course. NHMC is very pleased that the FCC and the DOJ have so justly put the little guys ahead of giant corporations in their review of this merger. Latinos pay more for cell phone service than any other ethnic or racial group, paying the most on AT&T and the least on T-Mobile. In addition, because T-Mobile's workforce is nearly 50% people of color, and an estimated 20,000 T-Mobile employees would have lost their jobs as a result of this merger, Latinos and other people of color would have been disproportionately harmed. For these reasons, NHMC has worked hard over the past seven months to educate people about the harms of merger. We are ecstatic to have defeated it," comments Jessica González, NHMC's Vice President of Legal and Policy Affairs.

The Center for Media Justice issued these comments:

amalia deloney, Media Policy Field Director of Center for Media Justice stated, “Since AT&T first announced its intent to takeover T-Mobile, the Center for Media Justice has continuously raised concerns about what role a duopoly would mean for historically marginalized communities— particularly communities of color and America’s poor who disproportionately rely on access to mobile broadband to find employment, access healthcare, advance their education and organize for social and economic justice.”

This holiday season, millions of folks across the country will not be blind-sided by high phone bills, and T-Mobile employees – many of whom are people of color and all of whom are nonunion- will get to keep their jobs. Today marks an important victory for rural and poor communities, people of color, and the hard workers of America who simply can’t afford to pad the pockets of the corporate CEOs.

And finally, the Media Acess Project:

Today’s announcement proves that law trumps politics. This anti-competitive transaction clearly exceeded permissible standards. AT&T and T-Mobile thought they could push it through by using lobbyists and political pressure, but the FCC and Department of Justice held firm.

Comedian Louis CK Takes Internet Seriously

Louis CK, the comedian responsible for the FX show "Louie" and for making people laugh at his brutally candid assessment of how much his young daughter's opinion about anything matters, has bypassed the major studios, channels, and cable distribution systems to sell one of his concerts directly to his fans.

For $5, they can easily download it and can then put it on any medium they choose. Some have put it up on pirate sites so others can use it without paying. But more than enough have paid to make it well worth his while -- as explored by the NY Times media critic, David Carr:

While I was talking with him on the phone Thursday night, he checked his Web site and about 175,000 people had bought his special through PayPal. He expected 200,000 total downloads by the weekend, which meant he would have grossed $1 million. After covering costs of about $250,000 for the live production and the Web site, that’s a $750,000 profit. And he owns the rights, and the long tail of buyers, in perpetuity. The transparency of the enterprise, including its cost in relation to how many people bought in, was the subject of media coverage all last week.

...

“O.K., so NBC is this huge company and they have all these studios and these satellites to beam stuff out,” he said, “but on the Web, both NBC.com and LouisCK.com have the same amount of bandwidth. We are equals and there are things you can do with that. This has been a fun little experiment.”

His "fun little experiment" demonstrates the threat posed by the Internet to the old business models of cable companies and content owners like Viacom and Disney. And this is why Comcast's purchase of NBC is worrisome.

Comcast is still fighting for the authority to prioritize some sites over others - it wants to violate the historic principle of network neutrality that prevents a service provider from interfering with what sites a subscriber visits. If Comcast had its way, it would require a taste of the action from Louis CK or could throttle the connections of those users watching his content.

In short, this success story illustrates the threat to the cable business model. Cable has long been the gatekeeper to content - Comcast decides what channels I can choose from. But right now on the Internet, I choose what content I can choose from.

Community networks, which put the public good above maximizing potential profits, are far less likely to interfere in the way that big companies like AT&T have admitted they would like to. It ultimately comes down to whether one views access to the Internet as just another product in the market or as an infrastruture or platform for everything else.

While the FCC should ensure that service providers cannot prioritize some content over similar content (CNN video over Bloomberg video, for instance), communities are smart to establish networks that are locally accountable -- as hundreds of communities already have. Depending on the FCC to police distant corporations is a poor strategy.

Photo used under creative commons, courtesy of Moff on Flickr.

WindomNet Turns on Southwest Minnesota Broadband Services

Exciting times in rural southwest Minnesota, as Southwest Minnesota Broadband Services has turned on its first customer. SMBS is a broadband stimulus-enabled partnership with eight rural communities and WindomNet, the muni FTTH network in Windom.

The Rev. Andrew Schensted and his wife, Lisa, were the first to be connected. The fiber-to-home connection provides “obnoxiously fast Internet,” Andrew Schensted said in a SMBS press release.

The SMBS Internet is “at least 10 times faster” than what they had when living in the metropolitan area, Andrew Schensted added. The couple has been able to streaming video in full HD from TV streaming websites.

So it begins... the Metro around Minneapolis and St Paul have to rely mostly on Comcast for connections to the Internet. CenturyLink's DSL is generally slower and in many places, utterly unreliable. Monticello has had a blazing fast connection (faster than we can get in the metro) at lower prices for more than a year. Communities served by HBC also have faster connections in SE Minnesota. In the coming year, the stimulus-funded networks on the North Shore will also have better connections than we can get. It will be curious to see how development patterns adjust in the coming years.

“The demand for higher-speed Internet in our rural area is daunting,” Olsen said. “People not only want faster speeds, they need it for their business operations. If the wireless trial is successful, it could provide a better option to those not on the fiber system. “

Southwest Minnesota Broadband Services (SMBS) is a consortium of eight communities including Bingham Lake, Brewster, Heron Lake, Jackson, Lakefield, Okabena, Round Lake and Wilder. The 125-mile, $12.8 million dollar fiber ring is expected to be completed in September 2012.

The fiber-optic communication network has the capacity to bring fast, competitively priced services for internet, phone and cable TV to residential subscribers as well as businesses and other community institutions. The government grant-supported project is intended to provide southwest Minnesota with the telecommunications connectivity required to remain competitive in the global marketplace.

The new network has bucked a strong trend among community fiber networks of offering symmetric connections to the Internet. Packages and pricing are available here. If I had to guess, the most commonly subscribed-to package will be the 10/2, which is pretty limiting in the upstream (though a tremendous improvement over the status quo).

Update: I have just verified that Windom is limited in what they can offer in the upstream presently due to the limited options they have for connecting to the Internet from rural Minnesota. Over time, we hope they will have more options that will lower those costs for them.

At a certain point, true symmetry becomes an academic point. I don' think many would quibble with a connection that is 21/19 or 33/35. The question is ultimately whether one is limited by the network. Nonetheless, we are strong proponents of networks upstream capacity that is closer to downstream capacity because being on the Internet is about participating, not consuming.

Tullahoma Utilities Start Smart Meter Meetings

Tullahoma, home to the LightTUBe FTTH network of Tennessee, is starting to roll out smart meters for its electrical and water utilities (owned by the city). They have initiated a series of public meetings to discuss the AMI - Advanced Metering Infrastructure. From a recent press release:

“The meetings are designed to answer any questions the Tullahoma community has about the AMI technology”, said Ernie Hobbs, Communications and Marketing Specialist for TUB. “We want to assure the community that automated meter reading is the next step in providing exceptional customer service. AMI is a step forward for Tullahoma, and it will provide additional opportunities for our customers by allowing them to monitor their own usage of utilities.”

The AMI installation is a replacement of current water and electric meters. The
new meters can transmit usage data through TUB’s secure fiber network. The infrastructure upgrade has been in the planning stage for several years. However, with Tennessee Valley Authority (TVA) moving to Time Of Use (TOU) rates, TUB decided it was time to begin the AMI project to align with the TVA rate change.

A recent newsletter from the utility explains further, noting that the Tennessee Valley Authority (a federal agency that produces the power used by Tullahoma and many other public utilities) is going to start charging time-of-use rates starting in fall of 2013. This is because electricity is more expensive to produce and distribute based on the amount being used - time of use pricing will encourage people to use more power when it is cheaper to produce and less when it is expensive.

This time-of-use pricing is one component of a "smart-grid." Unfortunately, some investor-owned utilities have used time-of-use pricing to increase their revenues without substantially benefiting ratepayers -- which is one reason many are suspicious of the entire concept. Hence the public meetings.

Because Tullahoma has its publicly owned network already connecting much of the community, it is better positioned to deal with TVA's changing rates than other communities.