Holly Springs Finds Savings with Muni Fiber - Community Broadband Bits Episode 107

Holly Springs, a town of about 25,000 in the Triangle region of North Carolina, has built its own network to connect community anchor institutions and has an interest in using it to spur economic development and other community benefits but a 2011 law pushed by Time Warner Cable makes some of that more difficult.

City IT Director Jeff Wilson joined me for episode 107 of the Community Broadband Bits podcast. We discussed why they decided to build a municipal network and how they have just finished the actual build.

We also discuss the savings they anticpate from owning the network and how local residents were hopeful that the network could be expanded to connect homes and businesses before learning that state law restricted them from doing that.

Read our additional coverage of Holly Springs.

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 13 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 Waylon Thornton for the music, licensed using Creative Commons. The song is "Bronco Romp."

Call to Action: Tell Your D.C. Officials to Vote NO!

H.R. 4752 from Rep Latta (R-OH) will be brought up in the House, likely as an appropriations rider, some time within the next few days. In the past several months, the municipal network movement has made great strides. If passed, this bill's content can be a significant setback. We encourage you to call the D.C. office of your elected officials and tell them to vote NO on H.R. 4752, NO on any rider based on H.R. 4752's language, and NO on any amendment that restricts FCC authority.

Be very specific when it comes to municipal networks - local governments should be the ones to decide whether a network makes sense. These amendments are designed to strip the power from the FCC that would allow it to ensure local governments can make this decision.

H.R. 4752's language would prevent the FCC from regulating Internet service providers under Title II. There is also some indication that the House will consider an amendment on municipal broadband; constituents need to stop the rider and the amendment from moving forward. 

This bill was introduced months ago. According to OpenSecrets.org, its Republican sponsor has received more than $320,000 in campaign contributions from the communications sector since 2007. 

The Free Press has also spoken out against this bill, which would help destroy network neutrality and this lethal amendment.

Get the word out to your communities ASAP! Call your Rep's D.C. office and urge him or her to vote NO on this bill or on any similar rider and NO on any amendment restricting FCC authority. As you know, if the FCC is limited in this way, its authority to take other meaningful action to support municipal networks will be compromised.

When you call your Representative's D.C. office, ask first to speak to the staffer in charge of telecom. If you live in a community where you have benefitted from a municipal network or in a community that is exploring the option, share your experiences. Let them know that you not want Congress limiting FCC authority in this way.

UTOPIA at a Crossroads: Part 1

This is the first of a three part series, in which we examine the current state of the UTOPIA network, how it got there, and the choices it faces going forward.

At the end of a month of public meetings, hearings, and city council votes, just over half of the cities that make up UTOPIA have chosen to take the next step in their negotiations with the Macquarie Group. The massive Australian investment bank has put forward an offer to become a partner in the troubled network in exchange for a $300 million capital infusion to finish the long-stalled FTTH buildout.

Of the 11 member cities that have debt obligations for the network, six (comprising about 60% of all 163,000 addresses in the UTOPIA area) have voted to proceed to “Milestone 2,” which means digging into details and starting serious negotiations on the terms of a potential public-private partnership. Macquarie outlined their opening proposal in their Milestone 1 report in April.

Macquarie has about $145 billion in assets globally, and is no stranger to large scale infrastructure projects. Their Infrastructure and Real Assets division has stakes in Mexican real estate, Taiwanese broadband networks, Kenyan wind power, and a New Jersey toll bridge, to name just a few. For their UTOPIA investment, they would be working with Alcatel Lucent and Fujitsu, highly capable international IT companies. So there’s some serious corporate firepower across the negotiating table from the UTOPIA cities - and in this case, that’s not actually a bad thing.

Jesse Harris of FreeUTOPIA has an excellent overview of the whole messy history of UTOPIA and the limited options the network’s member cities now face. While the network offers true competition, low prices, and gigabit speeds through an open access FTTH network, UTOPIA has faced a slew of setbacks over the years, from incumbent lawsuits and astroturf activism to mismanagement, poor expansion planning, loan disputes, and restrictive state laws. As a result, the network remains unfinished, with just over 60,000 of 163,000 addresses having been passed by fiber, while member cities are on the hook for about $500 million in long term debt and interest payments to go with annual operating losses in the realm of $2.4 million.

The UTOPIA cities have some choices to make. They could simply shut the network down, eliminating the operating costs - but also depriving the area of its best chance at ubiquitous and affordable high speed internet access, losing the revenue from current customers, and doing nothing about the long term debt. This would essentially guarantee that the cities would continue to make bond payments for the next 30 years while receiving nothing. It would also leave the many local businesses  that depend on the network’s reliable speed high and dry.

Or the cities could choose to sell the network, as nearby Provo did with its fiber network after state restrictions requiring an infeasible business model took their toll. Any proceeds from a UTOPIA sale would be dwarfed by the outstanding bonds, however, leaving the cities with most of the debt left to pay and little to show for it, handing over control of a local infrastructure asset to the highest bidder. This did not work out especially well in Provo, where the public sector held onto the network’s debt while a private provider (Broadweave) struggled to operate it. They have had better luck with a subsequent sale to Google, but still retain the public debt without community ownership. This is a fate UTOPIA cities should avoid if at all possible.

Stay tuned for the rest of this series. In Part 2, we’ll break down the main points of the preliminary Macquarie proposal. In Part 3 we’ll weigh the pros and cons, showing why this deal has the potential to make the best of a difficult situation for UTOPIA-area residents and businesses.

Chattanooga Will Ask FCC to Preempt State Barriers in Tennessee

Since January, when the DC Circuit Court of Appeals suggested the FCC has the authority to preempt state anti-muni laws, local communities have publicly supported the notion. Chattanooga's Electric Power Board (EPB) will join those communities when it petitions the FCC to preempt similar laws in Tennessee, reports The Center for Public Integrity.

Danna Bailey, vice president of corporate communication at EPB recently told The Center:

“We continue to receive requests for broadband service from nearby communities to serve them,” Bailey said. “We believe cities and counties should have the right to choose the infrastructure they need to support their economies.”

Chattanooga, one of the publicly owned networks that have inspired FCC Chairman Tom Wheeler, has proved itself as a strong economic development tool. According to the article:

A day after his meeting with Berke, Wheeler wrote in his blog, “I believe that it is in the best interests of consumers and competition that the FCC exercises its power to pre-empt state laws that ban or restrict competition from community broadband. Given the opportunity, we will do so.”

A number of other communities with municipal networks, or in the process of deploying them, have passed Resolutions that support the FCC:

In addition to communities with firsthand experience, the American Public Power Association (APPA) also passed a Resolution in June, urging Congress, the FCC, and the Obama Administration to unequivocally support:

…the ability of local governments, including public power utilities, to provide advanced communications services that meet essential community needs and promote economic development and regional and global competitiveness. 

The U.S. Conference of Mayors passed a similar Resolution at its annual meeting in June, which read:

BE IT FURTHER RESOLVED, that the US Conference of Mayors recommends that the FCC preempt state barriers to municipal broadband service as a significant limitation to competition in the provision of Internet access.

Soon after, a coalition from the National Association of Telecommunications Officers and Advisors (NATOA), the National League of Cities (NLC), and the National Association of Counties (NACo) joined together for a letter of support to Chairman Wheeler:

The importance of Internet choice at the local level has never been more important. In many places in the U.S, locally-driven projects—including innovative partnerships with private sector companies—have demonstrated that local creativity and local authority is a viable means by which new next-generation broadband infrastructure can emerge.

Fortunately, support is also coming from DC. In late June, a collection of Senate and House Members penned a letter to Chairman Wheeler, asking him to take action and begin the process. In a statement fully supported by the Institute for Local Self-Reliance, the Members wrote:

Communities are often best suited to decide for themselves if they want to invest in their own infrastructure and to choose the approach that will work best for them. In fact, it was the intent behind the Telecommunications Act of 1996 to eliminate barriers to entry into the broadband market and promote competition in order to stimulate more innovation and consumer choice. We urge you and your colleagues to utilize the full arsenal of tools Congress has enacted to promote competitive broadband service to ensure America’s communities obtain a 21st century infrastructure to succeed in today’s fiercely competitive global economy.

Local communities, regional coalitions, and federal leadership all recognize the importance of local Internet choice. The country is ready for the next step, Chairman Wheeler. We support you!

Santa Fe Ready to Improve Local Internet Choice

The City of Santa Fe is taking first steps to improve the community's Internet choice, quality, and availability. Recently, the City announced that it has chosen a partner for a middle mile investment and will move forward with the $1 million fiber deployment project.

CenturyLink and Comcast serve Santa Fe, home to approximately 70,000 people. Residents and businesses both complain about slow speeds and relatively high costs. Residents pay $50 per month for average speeds of 5 Mbps while nearby Albuquerque pays the same price for 10 Mbps, according to the Santa Fe New Mexican.

CenturyLink owns the sole fiber hut connecting the community with the Internet. The company also owns the line bringing access to the web to downtown, giving it control over data transmittal in the city. A city press release, reprinted at SantaFe.com in May 2013 described the problem:

Every home and most businesses already have two physical routes to the Internet: A telephone line and a television cable...But in spite of this abundance of pathways, there is a crucial missing link in the infrastructure, an enduring legacy of the former telephone monopoly. This missing link spans from the central telephone office to a location about two miles away where several fiber optic cables emerge from the ground after traversing many miles of road, railroad and countryside from remote junctions across the state. Absent this two-mile link, local providers have only one way to connect to the outside world, and must pay a steep toll on the data transmitted over it. 

The City recently announced that it would work with local ISP Cyber Mesa to build an independent line from downtown to CenturyLink's fiber hut. The City hopes the line will introduce much needed competition, encouraging better service and prices.

According to the plan, Cyber Mesa will run the City's fiber service for four years; after that other bidders can apply to manage the network. Three other companies bid on the project, including CenturyLink who told the City "not to waste money on the project." CenturyLink opposes the plan, of course, and Chris spoke with the New Mexican about what to expect from the incumbents:

Mitchell also warned that the city should not expect competition to flourish on its own, saying Internet giants such as Comcast and Century Link “have a lot of power to run competitors out of business.”

Mitchell warned that Comcast and Century Link have a history of opposing public Internet infrastructure projects through legislation, and that the city should expect resistance if it continues building such projects.

“They’re very happy with the market the way it is,” Mitchell said.

Citylink Logo

The project details have raised a few eyebrows from industry experts. While the plan to build another line will provide another path to the Internet, one of the bidders, CityLink Fiber, questions the wisdom of the plan:

[CityLink Owner John] Brown said that in his bid he proposed creating a 7-mile loop that would have accomplished the city’s goals and provided additional coverage and redundancy. The city didn’t bite, saying that he couldn’t complete the project within the funding limits, he said.

Brown said he could, but the city remained unconvinced and instead opted for Cyber Mesa.

He also questioned the need for running cable through Century Link’s central exchange, saying it was unnecessary and expensive.

We have been impressed with John Brown's work and are inclined to believe him. But regardless of the details, local businesses are hungry for better service. A local Web design firm owner, Damien Taggart, notes that large data files can take hours to transmit.

Smaller ISPs are also looking forward to an option beyond CenturyLink. Joel Yelich, president of a local wireless provider told the New Mexican:

“I certainly hope that is successful in some way,” Yelich said. “The more competition, the better.”

Whitewater Weighs Options for Municipal Broadband

Whitewater, Wisconsin, a city of just under 15,000 people that sits midway between Madison and Milwaukee, is considering its options for establishing a municipal broadband utility. As reported by the local Daily Union newspaper, members of the city council, the community development authority, other local bodies, and the public met this week to hear a feasibility presentation and discussion with Anita Gallucci, a Wisconsin attorney specializing in broadband utilities.

Whitewater already has some public fiber optic infrastructure, having gone live with their gigabit-capable Whitewater Unified School District network last fall. The network joins up with a larger fiber backbone on the nearby University of Wisconsin Whitewater campus, and has allowed Whitewater schools to increase their connection speeds by 1,200 percent while holding costs steady. The city is now looking at options for how to expand the opportunity brought by such high speed access to the broader community.

Tuesday’s meeting focused on two topics: the legal landscape for municipal broadband utilities in Wisconsin, and the varying levels of success that other Wisconsin cities have had with their own networks. On the legal front, Gallucci affirmed that “municipalities can get into the broadband business if they choose to do so,” but then went on to outline the hurdles created by Wisconsin law that make the process more challenging. From the Daily Union article:

Gallucci said that first, the city must prepare a formal report or feasibility study. The report must cover a three-year outlook which addresses revenues derived from constructing, owning, or operating the utility including such things as equipment, maintenance, and personnel requirements.

Given the upfront costs associated with building out a fiber optic network, a report focusing on a three-year outlook is unlikely to cast a favorable light on the project. Like any other significant investment in public infrastructure, municipal networks may take more than three years to break even. If we used that benchmark for roads, we wouldn't have many.

Wisconsin cities must also go through a public hearing and vetting process before voting on final authorization of a municipal utility. There is a shorter route on the books in Wisconsin, but one that effectively gives incumbents a veto:

Gallucci said that cities do not have to follow these steps in very specific circumstances, such as serving an area of the city that does not otherwise have service access; but cities must notify private companies (for example, AT&T, Verizon, or Charter Communications) of that project. However, if those companies say they currently, or plan to in the future, serve those areas, then the steps need to be followed.

It doesn’t take much imagination to guess what would happen if a city like Whitewater were to approach AT&T or Verizon and ask if they have any “plans to expand in the future” that might preempt the building out of a public network.

Wisconsin law is more obliging towards open access networks, according to Gallucci:

She said the steps could be avoided if the city acts as “a wholesaler of broadband services.” By this, she said, the intention would be to build the infrastructure and private companies would use those fibers to provide service.

“That would require the city itself to not provide any service to the end-user,” she explained.

While the legal environment in Wisconsin is generally unfavorable towards municipal broadband utilities, the meeting also highlighted some recent success stories. Reedsburg, which we wrote about here, was touted as the only Wisconsin city offering a “triple play” bundle through its broadband utility. Also mentioned was Sun Prairie, as fellow city seriously considering a FTTH network.

The next step will be for the Whitewater Community Development Agency to bring the issue before the City Council, which the city manager expected to happen “in the very near future.”  

Wireless Commons Part 2: The Possibilities of an Open, Unlicensed Spectrum

In the first part of this series, we discussed how spectrum could be better managed to allow far greater communications capacity, but only if the FCC abandoned its traditional approach of auctioning spectrum to carriers for monopolistic use. In this part, we’ll discuss how devices could take advantage of a new approach to spectrum management and how it might help to circumvent gatekeepers, whether corporate or government.

With increased unlicensed use of the spectrum, an astonishing range of possibilities emerges. Mobile devices could communicate with each other directly, without reference to a central node controlled by a telecom company or monitored by a government. Access points could be strung together wirelessly to create decentralized ad hoc networks, with each device forwarding data from every other, creating a seamless network throughout an entire neighborhood or city. Commotion Wireless is already attempting this on a small scale with just the existing spectrum.

Such networks already exist in a few places, but access to more unlicensed spectrum and permission to use stronger signals would allow them to grow, potentially creating a more decentralized and democratic way to share information and access the internet; an end-run around data caps, future “fast lane” policies, and other drawbacks of relying on one or two telecom oligopolists as a network owner and gatekeeper.

Another exciting possibility for unlicensed spectrum use can be found in emerging Ultra-Wide Band technologies. These allow devices to use a large swath of spectrum at very low power to send information in bits and pieces over short distances, somewhat similar to bitTorrents, and could allow for nearly instantaneous exchange of gigabits of data. All of this is dependent, however, on access to spectrum with the right characteristics, such as low frequency TV bands that can penetrate physical obstacles like walls or trees especially well.

These technologies have political ramifications as well. Rather than having to make monthly payments to a national provider as you do with your cell phone, we would have different models to choose from. Some would be just a matter of buying the right device, just as we already do with computers. Imagine setting up a neighborhood-wide network just as easily as setting up a home Wi-Fi network.

These possibilities are made both more enticing and more urgent by the huge growth in the demand for mobile data worldwide. The near ubiquitous status of increasingly high tech mobile devices, combined with the increased use of smart meters and other remotely controlled devices for homes and businesses, as well as the general growth in the size of audio, video, and other files all drive this trend.

Mobile connections grew from 1% to 13% of total Internet traffic from 2009 to 2012, and Qualcomm expects mobile data usage to grow by a factor of 1,000 from 2012 to 2020. With these demands, it is increasingly important to find new ways to use the spectrum that are not mutually exclusive. In this environment, the allocation of exclusive broadcasting licenses for the vast majority of the spectrum to incumbents who use those rights inefficiently makes little sense.

logo-fcc-2012.PNG

The FCC has some choices to make about how it will meet these challenges. It could simply clear underused spectrum, chop it up, and auction it again for new one-time revenue. Clearing space on the spectrum through reallocation is expensive and time consuming, however, involving complex legal and technical maneuvering.

What if rather than having Wi-Fi, the U.S. Treasury had a few extra billion dollars by auctioning that space on the spectrum to a monopoly provider rather than creating a commons? These are the real trade-offs currently being weighed and you better believe that the big wireless companies and their allies in Congress are working hard to prevent any major changes to the system they rule.

There are smarter approaches. The FCC could create a framework for sharing licensed spectrum, retaining priority use for original license holders while also forcing them to allow intelligent devices that sense and make use of available frequencies to operate within their licensed space. Or they could clear more space to be used for unlicensed communications, currently restricted to a few tiny portions of the spectrum. More unlicensed space is the most likely approach to foster significant development of new wireless technologies, which are difficult or impossible to deploy while telecom companies control so much of the airwaves.

All of this is unlikely to happen in the current regulatory regime. Telecom companies have shelled out billions for exclusive licenses and made large investments in technologies that work within the current business model of spectrum ownership. They also covet the foreclosure value that their ownership provides, meaning the ability to shut out competitors by denying them spectrum. As a result, a few massive telecom corporations have little to gain by democratizing access to spectrum bandwidth.

National elected officials, most of whom are not known for their technological savvy, must weigh the temptation of quick money ($20 billion from one auction in 2008 alone) in new license auctions with the difficult to conceptualize but potentially massive economic and social benefits of a more open spectrum. Unless they feel pressure from ordinary citizens who stand to benefit from greater spectrum freedom, the status quo of expensive, centralized communications and suppression of innovation is unlikely to change.

Spectrum graphic courtesy of Wiki Commons.

Harford County Network Goes Live in Maryland

Harford County, a mixed suburban and rural area in northeast Maryland, flipped the switch in late May on its Harford Metro Area Network (HMAN). The network includes 160 miles of fiber bringing high speed broadband to 150 sites, including all area schools, fire stations, libraries, and county and municipal buildings.

The project required $13.8 million in general obligation bonds from the county's capital improvement budget to construct four main fiber optic loops, with lateral connections leading to local anchor institutions. Not all planned facilities are connected yet, but construction will continue throughout the summer, as will the development of a business plan to determine how best to offer connections to local businesses and residences. Connections in the more rural northern area of the county will be wireless, due to the higher cost of building out to each home in lower density areas.

County Director of Information and Communication Technology Ted Pibil estimated that the county will save approximately $1 million per year by owning its own network, allowing it to cut ties with Verizon and Comcast. All of Harford County’s 54 public schools will see benefits as well, with increases in bandwidth of 50-100 times.

Harford County Sheriff Jesse Bane emphasized the public safety benefits of having a reliable communications network built with multiple contingencies in mind:

"This is going to provide the sheriff’s office with redundancy. That’s something we do not have at this time. It is something we have always considered a very precarious situation to be in… this will move us forward.”

While HMAN is funded entirely by county bonding, it builds on the backbone infrastructure of the OneMaryland Network, a stimulus-funded project that connects every county in the state. The press conference announcing the start of network operations can be seen here.

Early Lessons from Longmont - Community Broadband Bits Podcast 106

Longmont is about to break ground on the citywide FTTH gigabit network but it is already offering services to local businesses and a few neighborhoods that started as pilot projects. Vince Jordan, previously a guest two years ago, is back to update us on their progress.

Until recently, Vince was the Telecom Manager for Longmont Power and Communications in Colorado. He has decided to return to his entrepreneurial roots now that the utility is moving forward with the citywide project. But he has such a great voice and presence that we wanted to bring him back to share some stories.

We talk about Longmont's progress and how they dealt with a miscalculation in costs that forced them to slightly modify prices for local businesses shortly after launching the service. And finally, we discuss the $50/month gigabit service and how Longmont has been able to drive the price so low.

You can read our full coverage of Longmont from this tag.

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 20 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 Waylon Thornton for the music, licensed using Creative Commons. The song is "Bronco Romp."

Local Government Groups: "We Need Local Authority"

As the FCC considers the role of local authority in expanding Internet access, FCC Chairman Tom Wheeler is hearing from coalitions opposing state barriers on municipal networks. On July 3, Executive Directors from the National Association of Telecommunications Officers and Advisors (NATOA), the National League of Cities (NLC), and the National Association of Counties (NACo) sent Wheeler a joint letter of support [pdf].

From the letter:

The diversity of cities and counties in America also reflect differing values and needs. As such, Local governments should have the flexibility to address broadband and Internet access in a way that meets the needs of the people they serve.

The importance of Internet choice at the local level has never been more important. In many places in the U.S, locally-driven projects—including innovative partnerships with private sector companies—have demonstrated that local creativity and local authority is a viable means by which new next-generation broadband infrastructure can emerge.

The letter was close on the heels of a parallel Resolution passed by the U.S. Conference of Mayors (USCM) at their June 22nd Annual Meeting. From the final Resolution:

BE IT FURTHER RESOLVED, that the US Conference of Mayors recommends that the FCC preempt state barriers to municipal broadband service as a significant limitation to competition in the provision of Internet access.