community broadband networks

I was the guest on Jesse Harris' February Podcast about the UTOPIA network in Utah. Running time is about 1 hour and we cover a number of interesting issues relating to broadband networks both in and outside of Utah, including the perception of networks, success stories, the tactics of incumbents, the background of my project at the New Rules Project of the Institute for Local Self-Reliance.

I am not going to spend a lot of time on this, because if it isn't in the proverbial weeds for the focus of this site, it is pretty close. But the merger between Comcast and NBC would be bad news for publicly owned networks.

Comcast is already a massive company that has huge advantages due to its scale. When a community served by Comcast decides it wants a network that puts the community first rather than the boardroom in Philadelphia, they have to compete with Comcast for customers. Comcast can cross-subsidize from its non-competitive markets, meaning it can offer its services at a loss in competitive communities, offering prices that a new network simply cannot beat while paying its bills.

The larger it gets and the more channels it owns, the more market power it has and the harder for competitors to get enough subscribers to stay in business.

Beyond publicly owned networks, the Comcast and NBC merger is bad for everyone who likes real choices in channels to watch and programming to consume. In these times of great creativity due to the openness of the web, it further constrains opportunities for independent content creators - as illustrated by two articles describing the sausage-making of creating a channel lineup: Comcast vs. the Tennis Channel and How Cable Programming is 'Chosen.'

Terry Huvall, the head of Lafayette's municipally owned fiber to the home network, discusses the history and motivations behind the community fighting for four years to build their own network. Lafayette has a strong tradition of publicly owned utilities -- they were the first community in Louisiana to build a municipally-owned water and electricity utility, voting to tax themselves to fund it in 1896.

That investment allowed Lafayette to prosper and surpass other communities in the following decades. This investment will have the same effects.

For some 12 hours last week, entire communities found themselves without access to telecommunications due to a fiber cut to a Qwest cable that services the entire region. This is not the first time such a cut has marooned everything from Homeland Security to long distance phone calls to businesses that can no longer accept credit card transactions -- but Qwest has refused to invest in a redundant cable, showing their disregard for those communities.

I wonder how many businesses were hurt by their sudden and unplanned isolation from clients, partners, and others. How many missed contracts or deadlines?

It shows the insanity of putting barriers before communities that are trying to build the very networks companies like Qwest promise but never deliver (barriers like the 65% referendum to offer telephone services for publicly owned networks). Both Lake and Cook Counties are waiting to hear the status of their applications for federal broadband stimulus funds, with which they will build broadband networks. Companies like Qwest and Mediacom have opposed new networks in an effort to protect their turf, even while refusing to invest in those areas because they do not generate sufficient profits.

These County initiatives have not been denied stimulus funding but have also not moved into the "due diligence" phase, placing them in limbo and forcing them to prepare additional applications for the second round of funding before they even know why their application was denied (if it is denied) in the first round. Somewhere, Joseph Heller is smiling.*

MPR provided good coverage of this fiber cut even though they did not air an explanation as to why Qwest finds it reasonable to keep these communities connected with a single cable.

Bank ATM's failed. No one could use their credit cards. But as bad as that was for business, the 12-hour-long outage knocked out what the federal government calls a "vital part of our nation's emergency response system."

The outage killed 911 emergency service in Cook County, Chief Deputy Leif Lunde said.

...

With no 911 service, county officials turned to volunteer firefighters to field emergency calls from normally un-staffed fire halls. Fire truck radios relayed the information back to Grand Marais. Ham radio operators provided a backup way for the Grand Marais hospital to consult with Duluth medical facilities.

U.S. Customs and Border Protection officers received help from their counterparts in Canada, according to Public Affairs Liaison Chris Misson.

Read, or listen to, the entire story - it is well worth it and a good reminder that these networks are essential infrastructure.

Update: Resident Jim Boyd has a great piece as well, describing the impact of this Internet dislocation:

County and state police officers lost the ability to check driver's licenses and vehicle plate numbers and to make warrant checks on people pulled over or behaving suspiciously.

...

Banks lost access to all of their online records and their ability to connect with other financial institutions. Business ground almost to a halt, save for the few simple transactions that required only a temporary paper record, such as cashing small checks or accepting deposits.

I won't quote more because you should read his entire analysis. The conclusion is impossible to dismiss: these networks are essential infrastructure and communities must have the option of building their own network to avoid these problems.

Many communities around the country have built their own networks to ensure redundancy to first responders and other vital entities. In New York and DC, the local government runs its own network because their public safety departments cannot be just another customer to the phone company. In North Carolina, the non-profit Mountain Area Information Network provided broadband access to ham radio operators to recover in the event of a natural disaster - the incumbent (a national company) is far less responsive to local needs.

Disruptive cuts to these networks are not infrequent around the country -- but they don't always make the news, unfortunately. 2 months ago, I got an email from an exasperated person in Nebraska who noted thousands had lost Internet for 12 hours at that point and they didn't know when it would end. Once again, it was caused by a cut to Qwest fiber. Googling it, I cannot find news of it anywhere except for some social media sites. Nebraska is one of the worst states when it comes to preempting communities from building their own networks -- they need to reconsider that decision to bring some competition to town.

*Author of Catch-22 for you non-literary types.

Photo by Jackanapes, used under creative commons license.

Catharine Rice gave a terrific presentation detailing the ways Time Warner has responded to the municipally-owned Greenlight fiber-to-the-home network: raising the rates on everyone around them and cutting great deals to Wilson residents. I saw the presentation on the Save NC Broadband blog which also has a link to her slides - make sure you follow along with the slides.

She details how Time Warner has raised rates in towns around Wilson while lowering their prices and offering better broadband speeds in Wilson. Once again, we see that a community building their own network has a variety of benefits: a superior modern network that is community owned, lower prices on the last-generation network from the incumbent, and some investment from the incumbent.

Now the question is whether Wilson's residents will be smart enough to support the publicly owned network in the face of Time Warner's low low prices - a recognizing that a few short years of low prices (for low quality) are not worth abandoning the publicly owned network and the benefits it has created in the community.

Evidently, the Comcast-provided I-Net in Norton - a city of nearly 20,000 west of the Cape - suffers frequent outages, outraging those who depend on it. The City has decided to build their own network (after originally hoping Verizon would fund it) to connect town offices, public safety, and school sites with fiber-optic cables.

Norton predicts significant savings from the new network - just as do hundreds of other cities that are building their own I-Nets to cut costs and dramatically improve services and reliability.

The projected costs are $116,000, according to this article.

Town Manager James Purcell said the main infrastructure that will be installed will be the beginning, and likened the expenditure to paying for the installation of a major sewer line with stubs to various buildings.

A video from Chelan shows the benefits of a publicly owned fiber-to-the-home network in a rural public utility district in Washington State. The network has literally saved lived with tele-medicine applications. Citizens also cite educational advantages and increased business opportunities thanks to this smart investment.

This community of almost 10,000 near St. Louis has taken another step toward creating competition in broadband by investing in a publicly owned fiber network. In April of 2009, the community voted overwhelmingly (75%) yes to a question authorizing the network with revenue bonds that would be backed by electrical revenues from the city's public power company.

They have started the first phase (focusing mainly on businesses though some residences will be passed) by awarding bids for construction (the bids were below expectations - a slow economy is a good time for infrastructure investments due to the low prices). Though the project has spurred some debate, the majority remain in strong support, as demonstrated in a recent article about the project.

Guillot presented the council with more than 100 email replies from Highland Chamber of Commerce members who are in favor of the fiber project, including banks, schools, manufacturers, realtors and other businesses.

“There are currently other companies providing like services in Highland. This project will not end their relationships with the city, rather it will give consumers a choice and force competitors to provide a better product or better service to remain competitive,” Guillot said. “This will also keep more revenue in Highland.”

Highland resident Brad Korte agreed.

“The fiber-to-the-home parallels paving the streets in the 20s, starting the city’s electric system and water department. I would rather spend my money, and take a chance with my money on Highland,” he said. “If we don’t take a chance on this, I think we would regret it in a couple of years.”

The project will proceed more quickly if they are successful in an application for stimulus funds under the broadband programs. Regardless, the first phase will be completed in a year and needs a 23% take rate to break even financially (ignoring the many indirect benefits of such a network).

FiberNet Monticello put one of their advertisements on YouTube.

Video: 

Looking for something to listen to? Jim Baller's interview with Scott Mace on IT Conversations provides insight into stimulus funding, background on publicly owned networks, and his work on a broadband plan for the U.S. It runs for 50 minutes, but nearly all of them are interesting if you care about broadband.