community broadband networks

The city owned dark fiber network in Palo Alto is bringing in a steady stream of revenue that may lead to better connectivity for the entire community. According to a Gennady Sheyner Palo Alto Online article, the Utilities Department recently reported to the City Finance Committee that the city Fiber Fund yields $2.1 million per year. The revenue comes from dark fiber leases to approximately 80 commercial customers. From the article: 

Viewed as a risky investment two decades ago, the fund has in recent years become a plump cash cow. According to a new report from the Utilities Department, its reserves stand at $14.6 million in the current fiscal year and are expected to nearly double by 2018. [emphasis ours]

Commissioners want to get back to the idea of a city-wide FTTP network to serve residents and spur economic development. The city is now working with the school district on a possible expansion to all local schools. 

In his February March State of the City address, Mayor Greg Scharff declared 2013 as the "year of the future," describing fiber as "the key to assuring Palo Alto's long-term position as the Leading Digital City of the Future."  This year the City Council made "technology and the connected city" a priority.  Also from the article:

Commissioner Jonathan Foster noted that the idea of a citywide fiber network has been floating around Palo Alto for many years and said his views on the project have changed since last year, partly because of the council's new attitude about fiber. Before, when economics were the main driver of the conversation, he was more or less neutral, Foster said.

"Now, my approach is -- let's find a way to make this happen," Foster said. "I'm not sure we'll get there but let's come back with the best proposal we can," Foster said.

Commission Chair James Cook voiced a similar sentiment.

"I think this is probably a good idea whose time has finally come," Cook said. "Maybe now it's just gotten the right kind of momentum."

We spoke with Josh Wallace from Palo Alto Utilities in Episode 26 of the Comunity Broadband Bits Podcast. He shared details about the city's commercial dark fiber network. Durango, Colorado and Staunton, Virginia have also turned fiber assets into revenue and provide reasonably priced access to local businesses. As more communities see the benefit, more offer dark fiber leasing.

Dark fiber tends to be useful only to a minority of tech-savvy businesses but it can form the backbone of a future network and rarely encounters regulatory restrictions.

We spoke with Opelika Mayor Gary Fuller in episode 40 of the Community Broadband Bits podcast and learned all about the community's FTTH project. Local residents and businesses decided to go beyond the substandard services they received from Charter Cable and build their own municipal network. At the time of the interview, Opelika Power Services (OPS) was well into construction and is now testing the network, according to an article in the article in the Opelika-Auburn News.

Steve Harmon, director of OPS, said there are between seven to eight test sites in the city that are basic residences receiving these services. Throughout the trial run, OPS will monitor what services are working efficiently and which ones have problems that need to be fixed.

“We’re getting feedback from those people and we are working on fine-tuning the system’s channel configurations,” Harmon said.

As this stage, test sites do not have telephone capability, which will be part of triple-play service from OPS. Harmon noted that service will not be offered until all issues are resolved. That being said, OPS expects launch to be in late spring or early summer.

The community faced one of Charter's misinformation campaigns, but citizens still approved a referendum to bond $41 million for the network and smart grid project. Since then, Opelika has moved forward steadily with network construction and construction of a network hub facility. 

From the OPS News website:

“This is a most exciting time in the life of our community.  Opelika is about to become the first city in Alabama to have fiber to the user.  Very soon we’ll fully deploy smart grid along with telecommunications that include video (cable TV), ultra-high speed internet and telephone service.  The future is bright for Opelika.” 

Ottawa, located in east central Kansas, recently launched its own municipal fiber network. The community of 13,000 in Franklin County watched nearby Chanute build and establish its own broadband utility. Ottawa plans a similar incremental strategy. Both communities boast strong farming traditions and host industrial employers that could not get what they needed from the existing providers.

I spoke with Chuck Bigham, IT Director for the City of Ottawa, who gave me some nuts and bolts on the network. I also touched base with City Manager Richard U. Nienstedt, both are heavily involved in the establishment of the network.

Like in Chanute, local leaders have long nourished a vision for better connectivity. In recent years, they realized the vision was not only attainable, but necessary for the community to thrive.

Approximately seventeen miles of fiber, installed by USD 290 and Franklin County in the 1990s, was already in the ground when the project began. Students and staff connected to the Internet and linked the 8-10 school district facilities via its fiber network. These pre-existing resources became the backbone of Ottawa's new utility. Cooperation between the City Municipal Utility, USD 290, and Franklin County facilitated the configuration of the new network. Ottawa now provides business Internet access, expanded educational opportunities, and a higher level of service than was previously available.

Two years ago, the City and its Chamber of Commerce reached out to major businesses to determine the need for broadband. They found businesses in Ottawa were connected through existing providers, but were unhappy with price and level of service. The community's industrial park seemed especially disadvantaged. Businesses needed better upload speeds than the existing T1s, which ran up to $600 per month. While DS3 connections were available, they were unaffordable and there was no level of service between the two options. Businesses could not convince AT&T to offer something they could afford and, as Bigham noted, the telecom giant appeared to be "milking the cow."

This is a common complaint among communities - the big national telephone and cable companies often refuse to upgrade their level of service because the lack of alternatives for local business connectivity means the firms cannot switch away from the existing provider.

The City approach USD 290 and Franklin County and proposed a partnership. The City would use several available fibers on the existing infrastructure to serve as the community network backbone. The School District and the County would still own the fiber asset already in place, while the City would own any added segments and the routers and switches to make it work. The City and its utility would support and manage the network 24/7. The school board and county commission approved the proposal in the fall of 2012.

The School District now pays the City $3,000 per month with monitoring and network support from the City all day, every day. USD 290 gets double the bandwidth it used to get from AT&T, when it paid nearly $6,000 per month for a DS3 connection. Paying less, but getting double, seems like a very smart investment.

Ottawa followed Chanute's example by providing a floor instead of a ceiling as the foundation for service. In other words, customers contract for minimum capacity but are allowed to burst to whatever capacity is available at any given time. For example, the School District will soon connect with a minimum 250 Mbps with the ability to burst to 500 Mbps.

Over the course of ten years, Ottawa has spent less than $500,000 on its next-generation community owned network. All the revenue from the network goes back into maintenance and upgrades. City government facilities and two electric substations, which used to connect only to each other, now link to the main power plant via fiber.

Neosho Community College's Ottawa Campus connects to the network. Ottawa Cooperative Association recently joined the network to take advantage of the fast upload speeds needed to send data rich reports and get timely information on grain prices. The Coop previously had a slower DSL connection. Bigham and Nienstedt both expect to see more business customers when the network expands to the Northeast Ottawa Industrial Park, the next expansion project.

Nienstadt tells us via email:

Our main emphasis has been to use it [the network utility]  as a recruiting and retention tool and be able to say that, "We have your broadband needs solved and you do not have to worry about that issue when locating in Ottawa, Kansas."  Most assuredly, some of the businesses have been able to benefit from lower broadband costs since we  started surveying and talking about a fiber optic utility.  That, quite frankly, was one of our goals.

After many delays, Lake County is now in the process of hanging in fiber for its extensive fiber optic network project called Lake Connections. A recent report from WDIO.com in Duluth reminds us that Mediacom and other opponents of the project have continued to obstruct the progress of a network that will connect thousands of households who presently have no broadband options.

As we have seen in a few other stimulus-supported projects, companies like Mediacom are trying to protect their overpriced, last-generation networks by working with Republicans that want to discredit anything stimulus-related. It is sad to see so many rural households caught in the crossfire, particularly knowing that Mediacom has no plans to expand outside a few towns in the County - this means that if Mediacom were able to stop this project, many people would have no hope of getting real access to the Internet.

From the article and the video we have reposted below:

The Rural Utilities Service (RUS) is the branch of the USDA that approves money spent on the project. County Administrator Matt Huddleston said there is no indication the money will stop flowing.

“In the meantime we're focused on building the network and RUS is continually seeing our contracts move to them, and they're approving them and providing us the funds at this time to continue building it,” Huddleston said.

He said $20 million is tied up in contracts, and construction will move forward.

Connections to homes and businesses in Two Harbors and Silver Bay should be finished by July according to officials. Then a connection to Duluth will be built to connect the entire network to the rest of the world. Officials said the network will reach up to Ely by the end of 2015.

The project is divided into three phases with this first phase in full swing. According to the most recent Gaining Speed Newsetter [PDF], over 4,600 feet of fiber was placed on poles in Silver Bay during the first week of April.

The project has been slowed both by the intervention of Mediacom and its own decision to remove the original management team and bring in a new group.

Chief Information Officer for the Carroll County Public Schools Gary Davis joins me to explain why the Carroll County Government, Public Schools, Public Library, and Community College partnered to build their own fiber optic network. He is also the Chairman of the resulting Carroll County Public Network (CCPN) of Maryland.

The story starts the same as many others - the community anchors were paying too much and did not have access to the connectivity they needed. The telephone and cable companies (both massive international corporations) found higher returns on investment elsewhere and therefore could not justify improvements absent significant subsidy.

Gary explains the savings generated by the network and how it has benefited students attending the local schools. We recently covered the CCPN and its incredible savings for the community in a post here.

We also cover some basics of what some community anchor institutions need to ensure they can take advantage of modern technology.

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In North Carolina, Wilson's Greenlight will begin offering gigabit residential services as early as July. Greenlight began offering FTTH service since 2008 to businesses and households and now provides affordable and reliable triple play.

Along the journey, Greenlight faced a playing field tilted in favor of incumbent providers, predatory behavior from those incumbents, and dangerous legislative barriers created by companies like Time Warner Cable and CenturyLink.

From the press release:

“In January, the Federal Communications Commission issued a challenge to communities to provide gigabit service by 2015, and we’re proud to answer that challenge now.  We are excited to launch our gigabit service and allow our customers to be the first in the state to experience such high speed Internet access,” said Will Aycock, general manager of Greenlight.  “Ultra-high speed Internet will help position Wilson for the future and will provide our businesses and residents with the tools they need to succeed.”

Greenlight currently serves approximately 6,000 customers in Wilson and provides service to schools throughout the larger county. The network provides free downtown Wi-Fi through the downtown area.

We published two extensive reports on the challenges confronting the Wilson community as they planned and built out the network. Carolina's Connected Community: Wilson Gives Greenlight to Fast Internet tells the story of the network and difficulties along the way. The Empire Lobbies Back: How National Cable and DSL Companies Banned the Competition in North Carolina describes the backlash from incumbents and the resulting state barriers, championed by Time Warner Cable and what is now CenturyLink.

While envious of the possibilities in Wilson, we congratulate Greenlight and its community for this great achievement.

Due to the many exciting developments in the U.S., we rarely have time to peek at interesting projects overseas, but Australia is experiencing a political fight over its ambitious open access network. The opposition party wants to cut the costs of the project by transforming it from a FTTH network to a FTTN project - Fiber-to-the-node (or as I like to say, fiber-to-the-nowhere as it does nothing to address the largest bottleneck).

Thanks to Benoit Felten, we have been alerted to a "fabled Australian comic duo" sending up the opposition plan. Clarke and Dawe:

This southwest Colorado community of about 17,000 contends with state barriers, but still makes the most of its fiber assets. We contacted Eric Pierson, Information Services Manager for the City of Durango, and Julie Brown, the City Finance Manager. The two shared some information on Durango's fiber network.

Currently, fifteen miles of City owned fiber run through town, providing connectivity for municipal and La Plata County facilities. Installation began in 1994 and the build-out continues. A combination of City capital improvement funds, grants from the State of Colorado Department of Local Affairs (DoLA), and funds from the Joint City/County Sales Tax fund have contributed to the $1.7 million network over the past twenty-one years.

Durango leases dark fiber to businesses and nonprofits to boost economic development and fund maintenance for the network. While dark fiber leasing could be far more lucrative, Durango's goal is to break even each year. According to Brown and Pierson, 2013 will yield about $10,000 to be shared with La Plata County and the Southwest Colorado Council of Governments.

Mercy Regional Medical Center partnered with Durango to install fiber as its primary bandwidth connection. Mercy is now an important anchor institution for a large medical office complex in what used to be an undeveloped area. In addition to the clinic, new businesses and residents continue to expand in the area.

According to Brown and Pierson, local ISPs that lease the fiber to serve residents and businesses have increased bandwidth for customers. A significant number of professionals that live in Durango work from home.

Even though Durango is not able to freely expand the network due to state restrictions that limit how it can use the fiber absent a costly referendum, community leaders found a way to optimize their network for residents and businesses. And should the state be wise enough to repeal this anti-competitive barrier, Durango will be well positioned to benefit local businesses.

I just left the Broadband Communities Summit in Dallas, where I ran into many people doing great work to ensure everyone has access to affordable, reliable, and fast Internet networks.

Also while there, Google announced it had reached an agreement to offer Google Fiber in Provo by purchasing the municipal FTTH network. Provo has long been cited as a failure by critics of community-owned networks (even as it continued to attract jobs to the region).

Though Provo originally wanted to offer television, telephone, and Internet services directly using its trusted reputation in the community, the state legislature bowed to pressure from Comcast and CenturyLink (then Qwest) to limit local authority and tilt the playing field in favor of two distant corporations (that have still largely failed to invest in the networks needed by Utah communities). Provo was forced to use a wholesale-only business model.

That approach is rarely used today by communities that seek to build out the entire community at once because it is very difficult to generate enough revenue to pay the full costs of the network.

Despite Provo's struggles, Google recognized a community it wanted to work with. From Google's blog post:

Provo started building their own municipal network in 2004 because they decided that providing access to high speed connectivity was important to their community’s future. In 2011, they started looking for a partner that could acquire their network and deliver an affordable service for Provoans. We’re committed to keeping their vision alive, and, if the deal is approved and the acquisition closes, we’d offer our Free Internet service (5 Mbps speeds) to every home along the existing Provo network, for a $30 activation fee and no monthly charge for at least seven years. We would also offer Google Fiber Gigabit Internet—up to 100x faster Internet than today’s average broadband speeds—and the option for Google Fiber TV service with hundreds of your favorite channels. We’d also provide free Gigabit Internet service to 25 local public institutions like schools, hospitals and libraries.

At the Institute for Local Self-Reliance, we strongly encourage communities to own the essential infrastructure upon which they depend and we are dismayed to see such investments fail to meet their own goals or be privatized as has now happened in Provo.

But we also recognize the authority of communities to decide for themselves what the best path is and we believe that in these two isolated cases, Google Fiber will be a boon to the communities over the short term and resolve ongoing problems.

We have concerns over the longer term, but understand how difficult this business can be, particularly when state laws undermine the capacity of local governments to use the business models that give them the greatest opportunity to succeed.

As long as the Utah Legislature continues to kowtow to Comcast and CenturyLink demands, there would not have been an opportunity of Provo to fix the problems iProvo developed as a direct result of the initial crippling legislation.

I had an opportunity to speak with Milo Medin, head of Google Fiber, after his lunch keynote (which I hope to comment further on shortly) and he once again reiterated his (and Google's) opposition to states that restrict local authority to build these essential networks. He and we are on the same page - communities should be free to choose between building their own networks or partnering with others... or even doing nothing, though both Google and ILSR counsel strongly against that option.

One of the reasons Google chose Austin was because it was ready to work with them. In fact, we have long believed that if AT&T hadn't convinced the Texas Legislature to revoke local authority from communities, Austin Utilities probably would have already made network investments to benefit the community. As Google continues to look for partners, it will ignore entreaties from local governments that have had their heads in the sand, hoping they could avoid taking responsibility for ensuring great Internet networks.

We continue to be excited that Google's investments in fiber access networks have changed the paradigm regarding access to the Internet. Those efforts have awakened the media to the pioneering work already being done in communities like Chattanooga, Lafayette, Bristol, Morristown, and many others (including Clarksville now). And we will continue to advocate for communities safeguarding their self-determination by having a measure of ownership over the networks on which they depend.

There is no doubt that communities are foolish to depend on distant national cable and DSL companies to build the next generation of Internet networks.

And don't be fooled by these two quick annoucements -- Google takes many months to negotiate agreements with local governments like Austin, Kansas City, and Provo. I would not be surprised to see another announcement or two in 2013, but would be surprised to see more than a handful more. Communities need to make their own plans, not hope for an outside entity to rescue them.

For cities that don't want to get into offering services, we have been identifying communities that have made smart investments in partnerships with other providers or on an open access basis -- see Danville, Palm Coast, Mount Vernon, Indianola, Princeton (IL), Cortez, and many others on our map of community-owned networks.