Mark Cuban Supports Local Authority on Muni Networks

Even guys who don't support Title II handling of the Internet support local authority. Even if those guys are cigar smokin', basketball-team buyin', swimmin'-with-the-shark type guys. We are referring to a recent interview with entrepreneur Mark Cuban in the Washington Post.

While the interview covered Cuban's fear that changes may stifle innovation, we zeroed in on one particular question and his very astute response:

WP: Cities in Colorado have recently bucked a spate of recent bans on municipal broadband and approved letting themselves build their own ISPs. Do you support government getting involved in broadband in that way?

Cuban: I love it. I have no problem with it at all. 

(Image of Mark Cuban from his Twitter page @mcuban)

DubLINK Network Supports Economic Development, Health Care, and Supercomputing

Award-winning supercomputing apps, medical research, economic development, and quantum computing advances. What do they all have in common? They all depend on the DubLINK network running underneath Dublin, Ohio, a suburb on the Northwest edge of Columbus. The city of 43,000 people has 125 miles of fiber optics in the ground, both within its own boundaries and in the form of fiber purchased by the city within metro and regional networks. 

DubLINK began in 1999 as a public private partnership with the Fishel company to build an institutional network. In the wake of the 1996 Telecommunications Act, Dublin worried that a recent massive investment of $70 million in streetscaping would be undone as competing providers dug up newly paved streets to install fiber optics. To avoid this, the City signed a franchise agreement with Fishel to install a multi-conduit system, with the city receiving some conduit for its own use.  

Using 1.25” conduits installed in the city’s existing sewer system, the network runs for 25 miles underneath Dublin’s business district and connects six city buildings, who use their own lit fiber for data and voice services, eliminating expense leased line fees. This has allowed the city to save approximately $400,000 per year for the last 12 years in connectivity and information technology expenses.

In 2004, Dublin spent $3.5 million to purchase 96 strands running 100 additional miles through Columbus FiberNet, bringing the total length of the DubLink network to its current 125 miles. FiberNet is a duct system that runs throughout a significant portion of central Ohio, including Columbus and its surrounding suburbs.

The following year, the City of Dublin struck a deal with the Ohio Academic Resources Network (OARnet). OARnet is a 1,600 mile statewide fiber backbone connecting K-12 schools, colleges, universities, federal research labs, and other institutions. A $500,000 grant from the Ohio Board of Regents allowed DubLINK to make its connection with OARnet, and the city gave OARnet an indefeasible right to use 4 of its 96 fiber strands throughout its entire 125 mile network. They called their partnership CORN, for the Central Ohio Research Network. Earlier this year, the Ohio State Legislature awarded DubLink $300,000, which along with a $250,000 National Science Foundation grant and a $328,000 local contribution, will allow DubLINK to match OARnet’s 100 Gbps speeds throughout its entire network.

Seal - Dublin, Ohio

According to Dana McDaniels, Dublin's Director of Development, the city has spent approximately $5.5 million over the years in building, purchasing, and upgrading DubLINK. For this investment, he estimates that the city has received at least a $35 million return on investment already. This includes avoided costs around $4.8 million ($400,000 per year over 12 years), leases to telecoms and other entities of about one third of the city's dark fiber that amount to $3.2 million, and the much more significant gains in employment and thus tax revenue that have resulted from companies expanding or relocating in Dublin to take advantage of its incredible connectivity.

Dublin has a two percent income tax, one quarter of which is dedicated to a wide variety of capital improvement projects. It also uses a small part of this revenue as collateral for tax-increment financing bonds, which it has used to fund some of its share of network construction costs, with the rest of the $5.5 million in total network investments coming from the regular capital improvements budget.

The network is currently being used by a wide variety of public, private, and nonprofit institutions, including National Mutual Insurance, Nestle, Dublin Methodist Hospital, and online reference catalogue company OCLC Inc. OCLC connects to 70,000 libraries around the world, but relies on DubLINK to secure its data by connecting to backup data centers throughout the region.

Rather than narrowly focusing on network revenue, Dublin takes a broader economic development approach to its fiber resources. Development Director McDaniels uses fiber connectivity to lure businesses to locate or expand in Dublin the way other cities use tax credits or land giveaways. Ohio Health, which runs six hospitals in the state and has various other facilities, was granted 4 strands of DubLINK's fiber, which helped them decide to headquarter in the city. They now light and manage the fiber themselves, using it connect to all of their facilities throughout the region. Because they are able to so easily run their operations from Dublin, they have expanded their employment in the city from 300 to 1,200 people.

This September, one of DubLINK’s institutional anchors announced that they would be using DubLink to test new applications for quantum computing. Battelle Memorial Institute, a nonprofit applied science and technology company, signed a five-year deal with DubLINK to use the city’s fiber for their Quantum Key Distribution network, the first commercially-funded network to use quantum computing to encrypt information. Using subatomic particles instead of binary code to transmit information, Battelle claims they have created a form of encryption that will be hack-proof even if quantum computers make traditional encryption techniques obsolete. 

DubLINK proved its usefulness in 2013 as well, when a collaborative including representatives from the City of Dublin, the University of Missouri, and The Ohio State University were recognized for creating the “Best Application for Advanced Manufacturing” at the Next Generation Application Summit in Chicago. The team developed an app called Simulation-as-a-Service, which allows small businesses and labs to remotely access supercomputing capability. Small manufacturers would be able to use the app (in combination with a robust fiber optic connection) to run design simulations through supercomputers on the Ohio State campus, as well as trade design information in massive data files. 

According to Prasad Calyam, an assistant professor of computer science at the University of Missouri and the leader of the team developing the app: 

“The app really requires the infrastructure,” said Calyam. “The infrastructure is not the end goal of the project. It’s really the app. But we couldn’t build the app without the infrastructure.”

“Our work on Simulation-as-a-Service is one example where having a city invest in broadband infrastructure will help economic development,” said Calyam. “It helps companies to move there, to use the infrastructure, and essentially build new kinds of collaborations.”

Expedient Logo

The combination of DubLINK’s fiber infrastructure and proximity to The Ohio State University has also helped attract a growing number of data centers and medical research operations. Dublin-based Cardinal Health opened a research center in the city earlier this year, and Expedient Data Centers recently announced plans for a $52 million data center.

An even bigger fish is on the line for Dublin, which is competing with neighboring suburb Hilliard to be the location for a new $1.1 billion Amazon data center. Amazon has been secretive about its plans, but Ohio Governor John Kasich recently confirmed earlier leaks that the center would be located in the Columbus area. 

Dublin is pushing ahead with the expansion of DubLINK in the coming months and years. In conjunction with the upgrade to 100 Gbps speeds, the network is also beginning to move towards an open access Fiber-to-the-Premise model for major office and multitenant buildings in the city. Rather than bringing fiber to the curb and waiting for building owners to take advantage, the city will be bringing the fiber directly into at least 20 buildings this year and about 10 each year thereafter, with the option to increase the pace if it incents businesses to locate or expand in Dublin.

DubLINK has also struck a deal with a local data center that will serve as a "meet me" room and is in talks with ISPs, which will allow those intitutions using DubLINK fiber to connect to whatever ISP they wish over the publicly owned fiber. It will also allow them to connect to OARnet, the National Science Foundation's GENI rack, and the Ohio State University's supercomputer remotely - all at 100 Gbps. 

The local schools are on the docket for connections as well, with the three city high schools and administration building at the head of the line. They all stand to gain 100 Gbps network connections, and will also benefit from the nearly limitless educational resources of Ohio's universities and research organizations available through OARnet.

Whether or not Dublin successfully woos Amazon, its fiber optic network has proven to be a valuable community asset. It has allowed the city to partner with a local provider to launch a city-wide Wi-Fi system over 24 square miles, which uses DubLINK for backhaul and in return allocates 25% of its bandwidth to the city for its own uses, such as police communication and logistical support for large public events. It has supported medical and computing research, creating good jobs in the process. For all these achievements, Dublin has twice been named a Top 7 Community by the Intelligent Communities Forum, and last year Dana McDaniels, who oversaw DubLINK's development, was given ICF's Lifetime Achievement Award.  

Muscatine, Iowa, Upgrading to FTTH

Muscatine Power & Water (MP&W) announced in late November that it will upgrade its municipal hybrid fiber coaxial (HFC) communications network to an FTTH network. The upgrade will allow Muscatine to offer gigabit speeds. Construction is set to begin in 2016; the FTTH network is scheduled to go live in 2017.

According to the press release, the community hopes to capitalize on the new technology for economic development opportunities, better residential services, and replace an aging system with future proof infrastructure. From the press release [PDF]:

Consideration was also given to two other plans that would have either maintained or incrementally improved the existing HFC system. As stewards of the public trust, the Board of Trustees felt the other options were costly short-term fixes and that FTTH was clearly the superior option.

“Tonight’s decision assures that Muscatine Power and Water will continue to be a leader in telecommunications,” said LoBianco, “the new system will be able meet the bandwidth needs of the community for years to come while reducing maintenance and improving reliability. It ensures that the communications capabilities in Muscatine are as good as in any large city which enjoys the benefits of FTTH technology.”

Muscatine sits in the far southeast corner of the state and is home to approximately 29,000 people. The community established a municipal water utility in 1900, an electric utility in 1922, and its communications utility in 1997. According to the press release, the community was unhappy with the previous incumbent and an overwhelming majority of local voters elected to establish what is now called MachLink. The network offers video and Internet access.

A Muscatine Journal article reporting on a recent meeting of the Board of Water, Electric, and Communications Trustees notes that the project will be funded with an interdepartmental loan, one of the three most common funding mechanisms. (For more on funding municipal networks, check out our fact sheet [PDF].)

The article also reported that the communications utility posted a $64,000 profit in October which was higher than expected. In fact,  the entire year has been better than expected, even though revenues were down: 

The communications utility posted profit of $64,134 in October, compared to the budgeted profit of $43,928. A 3.7 percent decrease in revenue was driven by a lower number of cable television subscribers, but expenses were lower due to lower programming fees. A loss of $26,723 was budgeted for the year through October. Instead, profit of $470,960 was posted.

Open Access and Incumbent Challenges - Community Broadband Bits Episode 128

The open access approach, which generally refers to multiple service providers offering services across the same physical network, remains a challenge for those who want to implement it. Though many communities would prefer to focus on the infrastructure rather than selling services directly in competition with existing providers, most find the approach is not feasible.

This week, Eric Lampland is back on the show to discuss what the challenges are and how the future of open access may not be what many imagine it to be. Will we be purchasing a gigabit of Internet connectivity from service providers or will we instead be directly purchasing many services directly from service providers -- whether video, health care related, or other?

Lampland is the Founder and principal consultant of Lookout Point Communications. Our previous podcast with him discussed how to justify a network from just the indirect benefits.

Read the transcript of this episode here.

We want your feedback and suggestions for the show - please e-mail us or leave a comment below. Also, feel free to suggest other guests, topics, or questions you want us to address.

This show is 30 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed.

Listen to previous episodes here. You can can download this Mp3 file directly from here.

Thanks to Dickey F for the music, licensed using Creative Commons. The song is "Florida Mama."

Burlington Sells Burlington Telecom, Continues to Operate the Network

In November, Burlington's City Council approved the much anticipated settlement with Citibank. Burlington Telecom, a nearly citywide gigabit FTTH network owned by the city, was run into the ground by a previous mayor. That Mayor's Administration hid major cost overruns from the public for years, resulting in a challenging situation for the community. In the the world of municipal broadband, this is a significant anomaly.

The City found itself owing CitiBank some $33 million with no clear path on how to pay it. After years of arguing in court, the situation is largely resolved. Early in 2014, Citibank and Burlington reached a settlement [PDF] in which the the city would pay $10.5 million and a share of BT's future value in exchange for Citibank to drop its $33 million lawsuit. The obligation will include funds contributed by the city's codefendant, McNeil, Leddy & Sheahan P.C. law firm.

BT revenues, net cash flow, and the city's insurance carrier will contribute to the city's obligation, but the lion's share will be paid for with bridge financing from a local source. Trey Pecor, a Burlington business owner, has secured funding and created Blue Water LLC. The city will transfer ownership of the network to Blue Water in exchange for $6 million and will continue to lease the network from Blue Water at about $558,500 per year for a maximum period of five years. The goal is to find a partner to purchase the network. At that time, Blue Water and the city will divide any proceeds from the sale. 

As part of the agreement, the City Council and the Vermont Public Service Board (PSB) needed to approve the terms. The PSB is the state entity tasked with regulating utility rates and related financial matters in Vermont. On November 3rd, the PSB approved the transaction unanimously [PDF of the Order].

A Vermont Digger article reported that several organizations, including the Center for Media and Democracy, the Regional Educational Television Network and Vermont Community Access Media, requested a six month public engagement process before the deal be approved. The groups, known as Burlington Access Management Organizations (BAMOs) were concerned that a distant corporate owner that may purchase network, will not be community-minded in its decisions. The BAMOs also requested that three to five people with experience in telecom, alternative corporate structures, and public engagement, be added to the Advisory Board. From the VTDigger article:

The Public Service Board did not agree to the request. The board said it would be premature to impose conditions on a prospective sale, and that any future owner will be expected to comply with the same public access obligations the city must meet now.

“While the conditions requested by BAMOs may provide a useful mechanism to explore issues in connection with a prospective future sale of BT’s Assets, the Board declines to impose such conditions,” the PSB wrote.

Unfortunately, the PSB missed the fundamental point - the required public access obligations are quite small. Burlington Telecom, like most municipal fiber networks, went above and beyond the bare minimum required by law. The only way to ensure Burlington continues providing great customer service, high quality connections, and additional services to the community is by making it sure it is accountable to the community, not distant shareholders.

We cannot help but be disappointed at the continued pain caused by the failure of Mayor Kiss's administration to be honest with the people of Burlington - a reminder of how important transparency is for local governments.

We strongly support the efforts of local groups to ensure that when the network is next sold, it is to a locally rooted entity that will ensure the high level of service BT has delivered will continue.

The PSB did grant the city's requested reprieve from a condition that the network connect every address in Burlington. There are still approximately 3,250 addresses that BT does not reach, often in areas with underground utilities or condos where the owner is not cooperative. In order to make the system more enticing to potential buyers, the PSB removed the obligation from the utility's certificate of public good.

On November 17th, the City Council approved the settlement along with bridge financing documents, which will allow the process to move forward. The Council also decided to expand the BTAB and approved operating guidelines. WPTZ reported that there were local residents attending the council meeting who spoke out against the sale, but the Council voted to approve unanimously. From WPTZ:

"Given the circumstances that we were faced with over the past five years, this settlement is the best solution, the best possible outcome from our saga with Burlington Telecom," said Karen Paul, a Burlington city council member.

Local coverage on the City Council settlemet approval from WPTZ:

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Minnesota Border to Border Broadband Video and Materials Now Available from Blandin

Our friends at the Blandin Foundation recently sponsored another Minnesota Border to Border Broadband conference. Video and materials are now available

In addition to the archived video of the November 19th event in Brainerd, Minnesota, Blandin on Broadband's Ann Treacy provides links to summaries of each session, some of which also have PowerPoint presentations or video available for viewing:

Interest in rural broadband projects has risen sharply in the past two years. In 2013, the state legislature set aside $20 million in grant funding for rural broadband projects; applications have recently come due.

A Star Tribune article reports that entities seek approximately $44.2 million in total for Minnesota projects. Sen. Matt Schmit, the lead author on the grant funding bill also spoke at the conference and told attendees:

“Above all, I think what we wanted to do was prove there was interest out there — that there’s a need."

Community Broadband Media Roundup - December 5, 2014

After successfully fighting a Kansas state law proposed in February that would have outlawed community networks entirely, the city of Chanute is being required to follow an outdated 1940s law that requires them to ask permission to move forward with a bond initiative that would fund a high speed Internet network to businesses and residents. And, AT&T is officially intervening in the city’s efforts. 

Our most favoritest headline of the week about this story comes from Brad Reed with BGR: “AT&T wants to know why a town is building a 1Gbps network when it already offers 6Mbps DSL." Yah, Chanute, what gives?!

Dion Lefler with the Wichita Eagle reported this week that the city has been ordered to follow a 1940 state law requiring it to get permission to sell bonds that would fund a project to provide the town’s 9,000 residents with high speed Internet. 

Chanute officials say the law requiring commission permission to expand is outdated, because it was written in the days when the telephone company was a monopoly… “AT&T is the incumbent telephone company and Cable One is the incumbent cable TV operator,” the city’s filing to the commission said. “Neither of those providers offers the level of service throughout Chanute’s utility service area that Chanute will be able to offer its citizens as a result of the investment planned for Chanute’s network. As such, there will not be a duplication of existing services, even if such a consideration were still relevant today.

Kate Cox with the Consumerist goes further:

AT&T has a long track record of very vocally opposing even the mere idea of municipal broadband projects. The company has worked hard and spent lots of money helping enact state laws that prohibit public broadband expansion.

They have also argued that not only should public fiber projects be banned any place that they (or anyone else) already serves, but that those projects should be banned anywhere they might choose to do business later on.

And Jon Brodkin with Ars Technica noted the real cause for AT&T’s worry: the city would charge people just $5 more per month for Gig service than AT&T does for its bargain-basement 6mbps service. Yikes!

Wendy Davis with MediaPost covered the story as well:

If the new network moves forward, residents would have every reason to defect from AT&T in favor of the new service -- unless AT&T can step up its offerings.

So far, AT&T hasn't shown an inclination to do so in Chanute. While AT&T plans to expand its fiber optic network to dozens of cities, Chanute isn't one of them, according to advocacy group Public Knowledge. That organization today issued a public call for AT&T to avoid putting up obstacles to a new fiber network. “No one should deny rural America the choice of building high-speed broadband networks in a world where the Internet is so vital to a community’s growth.

MSMolly with FireDogLake offered her insight this week on the delicate balance ISP’s walk when it comes to regulation:

AT&T isn’t opposed to government handouts, though, as long as they are flowing to the private sector. The company argues that community broadband networks “should not receive any preferential tax treatment,” and that only private companies should be given special treatment. AT&T said, “Indeed, any tax incentives or exemptions should be provided, if at all, to private sector firms to induce them to expand broadband deployment to unserved areas.”

AT&T has been going state by state paying asking state lawmakers to get rid of most remaining consumer protections, such as those requiring continued 911 access to the elderly, so it can get out of DSL markets it doesn’t want to upgrade.

But AT&T isn’t all bad, right? I mean last week we reported that the telecom giant would back down on its threats to halt fiber rollouts, that’s good, right?

Thomas Gryta with the Wall Street Journal and Brian Fung with the Washington Post say that while AT&T might have said it would pull its investments in fiber if they didn’t get more certainty from the FCC about net neutrality, what they really meant was...

The issue is complex for AT&T. As a major Internet service provider, it has a deep interest in how the Internet is governed, but the company also needs approval from the commission for its pending acquisition of satellite broadcaster DirecTV.

In other words, “We didn’t mean to ruffle any feathers before the FCC approves our merger.”

Community Broadband Communities

The Slog’s Ansel Herz is at it again. He is frustrated that Seattle has not yet invested in a municipal fiber network. The city’s chief tech officer, Michael Mattmiller says the study he’s commissioning on muni broadband will likely not be complete until April (these things cannot be completed overnight!).

The threat of competition is giving cities all over the country more power in franchise agreement talks. Bill Neilson with Broadband Reports cites Lawrence, Massachusetts; Lexington, Kentucky; and New York City for using their franchise talks to get more from incumbents, or head for the door. 

After being told for years that previous franchise agreements would magically increase local jobs and improve customer service (which never occurred on either front), some cities are now demanding guarantees in writing before agreeing to a franchise agreement. Now, some cities are also demanding that franchise agreements be reduced in years so that cities may see just how well the cable providers are acting during the agreed upon years.

Residents in Torrington, CT are one step closer to fiber in their city. The council approved using part of $1.7 million in Nutmeg Network grant money set aside to fund a fiber optic connection for community anchors. The network would run alongside its existing AT&T connection.

Alaska's Statewide Broadband Task Force is up and running. The group is committed to bringing 100 mbps speeds to every household in Alaska by 2020. Carey Restino with the Arctic Sounder has the story:

"We have reached a point in the development of modern communications wherein the Internet is firmly woven into our fabric of everyday life. America is in a race to the top in order to compete in the globalization of trade and development," the report concludes. "Alaska is part of this race. The same factors that make broadband deployment difficult in Alaska — geographic remoteness, lack of roads, high costs — also mean that Alaska, more so than other states, has the most to gain from making sure that affordable and reliable high-speed broadband is available to all its residents. Very soon, social pressure will be too great for government and civil society not to act, whether collaboratively or alone. A clear plan is in the best interest of the state."

Despite its relatively small dollar amount, communities in Minnesota are competing for the state's $20 million broadband kitty. Jenna Ross with the Star Tribune:

[Ron] Brodigan, owner of the Snowshoe Country Lodge on Sand Lake [near Two Harbors], gets Internet service with download speeds of 5 megabits per second — “almost adequate,” he said. Once the county’s fiber-to-the-premises project reaches him, he expects to pay $80 a month for 30-megabit service. “It’s going to be a boon when we get it,” he said. “But it’s been setback after setback,” he said, referring to challenges from cable companies and other delays. But, he added, “they’re really humping now.”

"Stop Mega Comcast" Coalition; Philly Comcast Subscribers Speak Out in New Video

As days go by, an increasing number of organizations, companies, and individuals go on record opposing the Comcast/Time Warner Cable merger. The DOJ has already spent significant time analyzing the proposal and the FCC has been taking comments for months. On November 3rd, a new coalition, "Stop Mega Comcast," announced that it was jumping into the fray. 

Engadget reports that the group includes both consumer groups and competitors, including Dish Network and Public Knowledge:

"This much power concentrated in the hands of one company would be frightening even for the most trustworthy of companies," Public Knowledge's CEO Gene Kimmelman said in a statement. "And Comcast is definitely not that."

Certainly the people of Philadelphia could attest to the fact that Comcast is "not that." As we reported in episode #124 of the Community Broadband Bits podcast, the Media Mobilizing Project is working in Comcast's hometown to compel the cable giant to give back to a city it has already taken so much from.

Hannah Jane Sassaman described for us how the community is using franchise negotiations as leverage for better prices, better services, and more accountability from Comcast. Their project, CAPComcast, recently released this video wherein people straight from the Comcast service center describe their frustrations with the incumbent.

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Video Available: "Maximizing Fibre Infrastructure Investment in Europe"

Video of "Maximizing Fibre Infrastructure Investment in Europe" is now archived and ready to view. Our own Christopher Mitchell presented as part of this afternoon seminar on telecommunications policy.

The event, sponsored by the Swedish Association of Local Authorities (SALAR) and Stokab (The City of Stokholm IT infrastructure company) was held in Brussels on Wednesday, November 19th. Chris presented an update on private and public fiber network investment in the U.S.

The video is now archived and ready to view:

We also recommend Benoit Felton's presentation on the Stokab model:

You can watch video of the entire event at the Bambuser website or below.

Community Connectivity Toolkit Launched

If your community is hungry for better connectivity, you may be interested in starting a community network initiative. Getting started can be a daunting task so we developed the Community Connectivity Toolkit.

The Toolkit includes broad suggestions for steps you should take as you investigate solutions for your community. We also include resources to help you educate yourself through case studies, fact sheets, and other media. We touch on common stumbling blocks and ways to counter them. The toolkit suggests policies that will prepare your community for better connectivity. 

The Community Connectivity Toolkit helps you ask the right questions and gives you a starting point where you can find information to learn, share, and prepare. If you have suggestions for how to improve the toolkit or questions that you want answered that are not in it, please let us know.