Highland Schools in Ohio First to Connect to Medina County Fiber Network

Quite some time ago, we let you know about the plans and funding for the Medina County Fiber Network (MFCN). The network, owned by the Medina County Port Authority (MCPA) began construction in March, 2011, and is nearing completion. Jennifer Pignolet, reported in the Medina GazetteOnline, that the network just signed on their first customer, Highland Schools.

Apparently, the schools contract with its current provider, Time Warner Cable, is about to expire. While connecting Highland Schools now may be ahead of schedule, the county fiber committee can accommodate their needs. As an added bonus, the new relationship is more economical for the schools. From the article:

“Their situation needing to be addressed immediately certainly moved them to the front of the line,” [said Jim Gerspacher, chairman of the county’s fiber committee].

While the $14 million network is still months away from full completion, Gerspacher said there is enough infrastructure in place to get Highland online.

The school will have full Internet and phone service and will have all its buildings connected to one network.

Highland Technology Director Roger Saffle said the district will save close to $90,000 a year by switching from Time Warner to the Medina County network.

“It will maintain the access we already have with a cheaper cost,” Saffle said.

Highland Schools is moving from a $100,000 per year Time Warner Cable contract (or about $8,333 per month). The schools now will pay $1,500 each month to the MCPA and, according to Saffle, will be able to apply for federal grant funding to recover 40% of that monthly fee.

In 2008, OneCommunity and the MCPA began a partnership to plan and build the network. OneCommunity received a $44 million broadband stimulus grant in 2010 to extend fiber to 22 Ohio counties. MCPA received $1.6 million of that stimulus for their County network. The remainder of the $13.8 million project was covered by 20-year revenue development bonds issued by the MCPA.

OneCommunity will manage operations when the project is complete.

Community Broadband Bits 4 - Kevin Kryzda, CIO of Martin County, Florida

The fourth episode of Community Broadband Bits features Kevin Kryzda from Martin County, Florida. We discuss their county-owned network that is saving millions of dollars for the community -- as detailed in our case study published last month.

Activists that want to encourage publicly owned broadband in their communities should familiarize themselves with the cost savings and advantages from Martin County's approach. Though Martin County is serving schools, libraries, and public safety, it does not serve residents and businesses with services directly. However, this could be the first step for other communities before they do offer such services to everyone.

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 19 minutes long and can be played below on this page or subscribe via iTunes or via a different tool using this feed. Search for us in iTunes and leave a positive comment!

Listen to previous episodes here.

Thanks to Fit and the Conniptions for the music.

South Carolina's "Exceptions" To Anti-Community Broadband Law are Worthless

South Carolina's H3508 has passed the legislature, been signed by Governor Nikki R. Haley, and has revoked local authority to build the broadband networks they need to create new jobs. Last week, we noted some of the coverage about the bill.

After reviewing the language of the bill, we are astonished at how far the Governor and the South Carolina Legislature have gone to protect AT&T's monopoly, to the detriment of the many businesses and citizens who desperately need better access to the Internet -- whether to be more productive, competitive, or just take advantage of educational opportunities.

South Carolina is near the bottom of adoption rate in the U.S. and has a higher than average number of residents living below the poverty line. Communities with fast, affordable, and reliable access to the Internet are seeing new jobs. Those stuck on slow DSL are watching jobs wither away.

We continue to be amazed at state legislatures that are prioritizing laws to make it harder to expand broadband rather than easier. The only explanation is the vast amounts of money big companies like AT&T and Time Warner Cable spend in campaign contributions.

This bill is designed to prevent local governments from building next-generation networks, even when the private sector has refused to invest. It may also put an end to projects already in the works (even those that have received BTOP or BIP funding).

H3508 is not an outright ban against municipal networks, but it might as well be. South Carolina had already discouraged community broadband networks in Article 23, Chapter 9, Title 58 of its 1976 Code. This bill ramps up the unfavorable conditions to make such investments all but impossible.

Much of telecommunications is regulated by states and the federal government, which means that local governments already have to follow the same rules as companies like AT&T and Time Warner Cable. To the extent that local governments have authority, they are required by law not to favor their own network. But South Carolina has decided to impose still more regulations only on local governments if the community decides to build its own network.

It would be impolitic to advance a bill that simply says local governments cannot invest in the essential infrastructure needed for the modern economy. So these bills are instead crafted to appear reasonable while effectively demanding that communities capture a leprechaun riding a unicorn before they can build a network. 

In the coverage of this bill, few have examined the "exemptions" in depth, so that is where our coverage will focus. The "exceptions" contained to the onerous provisions of this bill are nearly impossible to qualify for and provide insufficient certainty as to how long they would apply.

South Carolina Seal

You've Been 'Served'

South Carolina continues to use a 1990's definition "broadband service" of 190kbps in at least one direction. Possibly the worst broadband definition we have seen. But for the purposes of this bill and defining who is "served," they have adopted the FCC's "Basic Broadband Tier 1" as a benchmark. Currently, that is at least 768kbps in at least one direction. 

Some of the regulations uniquely imposed on publicly owned networks will be relaxed if the community network can obtain "unserved" designation for a specific geographic area it wishes to serve. Designation must come from the South Carolina Public Service Commission and can only be achieved in one of two ways:

1. If the county is a "persistent poverty county" (a USDA definition) AND at least 75% of the households in a 2010 census tract have either no broadband service or only access to service from a satellite provider - In rural areas, census tracts usually include large geographic areas of many census blocks, often cross county lines, and can be arbitrarily drawn, so meeting this requirement appears quite difficult. Another difficulty is that maps depicting broadband access systematically overstate coverage, often claiming some households have access when they actually cannot connect.

As 3G wireless connections (from AT&T, Verizon, or others) exceed 768kbps in one direction, we would be surprised to find multiple connecting census tracts with 90% of households lacking "broadband." Of course, a dramatically overpriced wireless service with small monthly bandwidth caps is useless for doing homework, remote education, economic development, and pretty much anything beyond email and very basic web surfing.

2. If at least 90% of the households in the county have no broadband service or only access to service from a satellite provider - Here, the requirement shifts to census blocks, which greatly tightens the requirements. Blocks are the smallest unit of census measurement, more akin to city blocks in town, but can be much larger in rural areas. Even the 2011 North Carolina bill didn't go this far, defining "unserved" as census blocks where "at least 50% of households have no broadband service or only access to satellite service."

Catharine Rice, President of SEATOA, applied some pragmatic perspective in an email to us:

Unserved areas are defined by census blocks. So you'd have to cull together tens of thousands to make a network viable, and all of them would have to qualify as unserved... So if 11% of the homes have [basic tier 1 broadband service as defined by the FCC] (not enough speed to even download a Netflix video), that Census block is 'served.' 

Also the real show stopper here is that the NTIA federal broadband maps do not measure areas by households. More specifically, the NTIA rules allow this: if one home in a census block could have broadband in 7-10 business days (as determined by the carrier reporting the data), the entire Census block is considered to have broadband. So a SC community would have to do its own broadband census survey, and that aint' cheap.

SEATOA Logo

Hard to Get, Easy to Lose

Even if a county is able to qualify as "unserved" and could legally pursue a municipal network for their community, the designation is easily challenged by a resident or a competitor ISP. All it takes is an objection, the opportunity for a hearing, and testimony to stop the petition for "unserved" designation. This part of the process can halt development by at least 90 days. Time can be a killer for network planning and the big telcos know that. Theoretically, AT&T can hire a "Petition Buster" to routinely file objections and use time to destroy plans for networks. This is a common tactic used by big corporations that maintain big teams of lawyers -- they prefer to spend a little to block new competition rather than a lot to compete in a competitive market.

Exception Today, Gone Tomorrow

One of the most troubling components of the new law is the time restrictions that apply to the "exceptions." New broadband networks, both publicly and privately owned, require years to build and leave the "startup" phase. 

If a county is designated as "unserved," a government entity offering service is only exempt from the crippling additional regulations for one year if that area loses its "unserved" designation. Bear in mind that these unserved areas are where the business case for broadband does not exist. So if a community can somehow build a network in this area, it will quickly lose its exemption if AT&T decides to put a 3G tower up in the area.

This is not an exemption. It was an opportunity for elected officials to pretend they didn't just give AT&T an unofficial monopoly in return for generous campaign contributions. We will be very surprised to see any community proceed with a network given the uncertainty and increased advantages this legislation gives the biggest carriers (who have refused to invest in South Carolina).  

Roundtable Discussion on Bandwidth Caps and Broadband Networks

On Friday, July 13, I was a guest on TWiT Specials on the This Week in Tech Network, discussing bandwidth caps with Dane Jasper, Reid Fishler, and Benoit Felten. Hosted by Tom Merritt.

It was a very good discussion over the course of one hour.

Provo's Publicly Owned Broadband Network Attracts 98 Jobs

Fresno's loss will be Provo's gain. Why? Because Provo built its own network and can meet the modern telecommunications needs of businesses. A company is moving from Clovis, in Fresno County (California), to Provo, Utah. The Business Journal covered the story:

Clovis-based Secure Customer Relations, Inc., plans to move its entire operation to Provo, Utah this month, resulting in the loss of 98 jobs.

...

Secure Customer Relations operates a call center that specializes in appointment setting, client prospecting and other functions on behalf of the insurance industry.

Overall, the cost of operations in Provo would be a savings over Clovis, Carter said, including labor costs. He added that Clovis does not have the same level of fiber optic infrastructure as Provo.

Interestingly, Clovis is slated to get better access to broadband as part of the stimulus-funded Central Valley Next-Generation Broadband Infrastructure Project. Unfortunately, that is one of them any middle mile projects that will connect community anchors but not offer any immediate benefits to local businesses and residents. It is a middle mile project, not a last-mile project that would build a fiber-optic access network like Provo has connecting everyone.

This is not to demean the middle-mile project, but such things are often misunderstood (sometimes due to deliberate obfuscations by those promoting them).

And speaking of obfuscation, the Economic Development Corporation of Utah apparently wants the Utah state government to take credit for this company moving to Provo.

"We move a lot of data and need high capacity," CEO Carter Beck told the Journal last week. His company specializes in appointment setting, client prospecting and other functions on behalf of the insurance industry.

The relocation of companies like Secure Customer Relations, Inc. to Utah reaffirms the conclusions of a Utah Broadband Advisory Council Report released last week by the Utah Broadband Project and the Governor's Office of Economic Development (GOED) -- that Utah is attracting businesses due to the state's exceptional level of high-speed internet access and communications infrastructure.

EDCU Logo

The discussion about what Utah has done to improve broadband is superfluous. Comcast, CenturyLink, and other major providers are not doing anything special in Utah. CenturyLink has cornered the low-price, slow speed subscribers and Comcast is available for most of those who simply have no other choice for a faster connection. It is Provo and a number of other Utah towns that have built next-generation networks, over the opposition of the state and incumbent providers.

Earlier this week, we posted an interview with UTOPIA and XMission, which provides service on UTOPIA (and CenturyLink, where allowed to). It is UTOPIA and the iProvo network that have boosted Utah's broadband reputation because they offer the fastest connections in the state.

In fact, the state has actively hindered the fastest networks by subjecting them to onerous regulations that do not apply to the big carriers like Comcast and CenturyLink. Why? Because Comcast and CenturyLink make a lot of campaign contributions and employ many lobbyists to cripple potential competition to their services.

If Utah actually wants to encourage jobs in areas not served by iProvo and UTOPIA, it should remove the restrictions that have crippled publicly owned networks. The vast majority of community networks have had more success than iProvo and UTOPIA, and part of the reason is that Comcast and CenturyLink have created an atmosphere of hostility in the culture and the Legislature to sabotge their efforts.

Provo and UTOPIA have been widely critiqued for significant cost overruns and a failure to sign up enough subscribers. Nonetheless, they are making positive contributions to the community, which go ignored by critics that are more interested in attacking anything the government does rather than a proper analysis of whether the private sector alone is suited to run this essential infrastructure.

South Carolina Legislature Puts AT&T Monopoly Above Own Infrastructure Needs

Last week, South Carolina's General Assembly passed H3508, the ALEC and AT&T bill we previously warned you about. AT&T, ALEC, and cable companies pushed this bill to limit broadband competition and revoke local authority to decide if public investments in broadband infrastructure are wise.

H3508 is one of the worst pieces of legislation we have seen. States usually incorporate language that "grandfathers in" existing projects as a way to avoid legal challenge and federal scrutiny of their anti-competition legislation. In South Carolina, however, crafty drafting puts one county BTOP project in the cross hairs while permitting two other projects to continue.

Below is a roundup of media coverage of the bill. We will soon release our analysis of the supposed "exemptions" to this bill but in the meantime, this coverage explains several of the problems with South Carolina's latest Monopoly Protection Act.

Ars Technica's Cyrus Farivar contacted Jim Baller, a preeminent telecom attorney and expert in broadband issues:

"States have different ways to achieve the same end—discourage, delay, or derail public broadband initiatives," wrote Jim Baller, a telecom lawyer based in Washington, DC, in an e-mail to Ars on Thursday. He noted that similar bills were introduced in Minnesota and Georgia this year, the former of which has led to a "study bill," while the latter did not make it out of committee.

"In some ways, the South Carolina bill is worst of all because it does not grandfather existing projects and would retroactively undermine federal stimulus grants that Orangeburg and Oconee Counties have received,"  he added.

Ars Technica Logo

Farivar also looked into the chief author and found:

Public records show that in 2011, AT&T, itself an ALEC member, contributed $1,000 to the coffers of Michael Gambrell, South Carolina assembly member and lead author on the bill. Other sponsors of the bill, including Bill Sandifer, Bobby Harrell, and many of its supporters, also received donations from AT&T as well.

Gerry Smith, of the Huffington Post, also noted a correlation between H3508 and political support:

In South Carolina, AT&T, CenturyLink, and Time Warner contributed more than $146,000 to state lawmakers since last January who supported the bill, according to an analysis by The New Republic.

Last year, North Carolina also passed a law restricting local governments from building publicly owned broadband networks. Lawmakers who voted in favor of the bill received on average 76 percent more in donations from major cable and telecom companies than those who voted against it, according to the National Institute on Money in State Politics.

Smith sought out the chief author, who offered the number one AT&T/ALEC talking point:

"What this law does is level the playing field,” Mike Gambrell, a state lawmaker who sponsored the legislation, said in an interview.

But critics say AT&T, the major telecom company in the state, does not serve broadband to many rural areas where local governments could provide their own networks. In addition, they say the law leaves rural communities with sluggish Internet speeds because it defines a "served" area as one that can access internet speeds of least 190 kilobits per second, which is slower than the FCC's definition of broadband.

We address "level playing field" arguments here.

Catharine Rice, President of the SouthEast Association of Telecommunications Officers and Adviors (SEATOA), contacted us with a practical application of the bill's "served" versus "unserved" application:

This bill limits their [municipal networks] service areas to surrounding rural areas, and effectively prohibits any other communities in SC (and there are many) from filling the broadband gap created by the large private carriers.

Unserved areas are defined by census blocks. So you'd have to cull together tens of thousands to make a network viable, and all of them would have to qualify as unserved. According to the bill, an unserved area is a census block where 90% of the homes in the census block don't have access to 768 Kbps service. So if 11% of the homes have 768Kbps (not enough speed to even download a Netflix video), that Census block is "served." 

Bad, bad, and more bad

Hartsville seal

While two current Broadband Technology Opportunities Program (BTOP) projects, Orangeburg and the City of Hartsville, appear to fall into H3508's exemption and will be able to proceed, Oconee County faces special problems with their project, F.O.C.U.S (Fiber Optics Creating Unified Solutions). Jim Baller's legal analysis for Oconee County concludes that :

By requiring the County to show that “the middle-mile services it offers are used to actually provide communications services to end users in unserved areas,” ... would ... render the exemption useless to the County. That is so because it is impossible for the County to comply with H.3508’s prohibitions on an end-user-by-end-user basis. As a result, if even a single Community Anchor Institution served even a single end user outside an unserved area, the County would be subject to the full panoply of H.3508’s onerous prohibitions.

This type of project, focused on providing upgraded connections for anchor institutions, and not focusing on last mile connectivity, is one type of project encouraged by the National Broadband Plan.

The Plan also calls for Congress to make it clear that all communities have the authority to build their own networks. Since H3508 doesn't adequately grandfather in existing projects, which most states do, the bill is open to legal challenge. It is contrary to the letter and the spirit of the National Broadband Plan.

Baller also notes a potential Constitutionality issue. The United States legal system takes great pains to limit and avoid retroactive laws. This bill prevents Oconee County from honoring commitments and contracts with the federal government and with the private sector. With no insurance against retroactivity in the law, the economic drivers in our country are loathe to commit and shy to invest.

This bill is bad for communities, bad for the private sector, bad for people who want a real choice in broadband providers. Google, Alcatel-Lucent, NATOA, SEATOA, and other groups in the telecom industry advocated against H3508. South Carolina is near the bottom of adoption rate in the U.S. and has a higher than national average of residents living below the poverty line. With laws like this, those statistics are unlikely to change.

Opelika, Alabama Breaks Ground on New Fiber Network Hub Home

We have followed events in Opelika's network project for almost two years. In addition to creating a smart-grid for its municipal electric utility, the City plans to offer triple-play services. We previously covered Charter Cable's astroturf campaign to oppose the network and how the campaign failed when Opelikans passed the referendum.

This week, the 27,000 residents of Opelika saw their efforts begin to materialize at a ground breaking ceremony at the site of the new Opelika Power Services Facility. Chris Anthony, of the Opelika-Auburn News covered the story:

Site work is well under way on the $3.7 million facility, which leaders say will be an integral part of the fiber-optic network being built throughout the city. In addition to housing the administrative office and warehouse, the facility will also be the home of Opelika Power Services’ fiber hub.

Mayor Gary Fuller notes how the people of Opelika entered the business of municipal utilities over one hundred years ago, when the community purchased the then-private electric utility. He spoke about how the people of Opelika carry on that self-reliant streak with their new fiber network.

According to, Beth Ringley, Interim Director of Opelika Power, 90% of the fiber is installed underground throughout the city and should be nearly completed by the end of the summer. The $41 million project is scheduled for completion in the spring of 2013 and the first customers are expected to connect at that time.

“It’s a big, big day for the city of Opelika,” Mayor Gary Fuller said. “It’s important for our future.”

Two videos offer further coverage of this new community network.

Government Technology Video Focuses on Chattanooga Community Fiber

Government Technology interviews some local officials in Chattanooga about its network - the nation's first network offering 1 gigabit connections throughout the entire community. The slowest Internet connection available, 30/30 Mbps, is available in bundles that rival Comcast and AT&T in price. But the Comcast and AT&T services are pathetic in comparison - particularly when it comes to customer service.

We published an extensive case study explaining how Chattanooga EPB built its network.

Community Broadband Bits 3 - UTOPIA and XMission

For the third Community Broadband Bits podcast, we decided to do a double interview, perhaps making up for skipping last week due to our Independence Day holiday. In this show, we talk with Todd Marriott from the UTOPIA open access network in Utah. The second interview is with a provider on the network: Pete Ashdown, the founder of XMission.

The UTOPIA web site is here. If you want to learn more about UTOPIA, an excellent site is Free UTOPIA, run by Jesse Harris. And Pete Ashdown writes about broadband issues at Transmission.Xmission.com.

We continue to be interested in 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 twenty minutes long and can be played below on this page or you can subscribe via iTunes or via a different tool using this feed.

Thanks to Fit and the Conniptions for the music.

Independence and the Limits of Markets

A new book from Michael J Sandel asks, "What Isn't for Sale?" At least, that was the title of his article in the April Atlantic Monthly. The book is actually titled What Money Can't Buy: The Moral Limits of Markets and you can find it at your local bookstore.

Broadband policy often deals with the term "market." Given the strong natural-monopoly characteristics of broadband networks, we generally make two points.

1) The private sector will not create a competitive market for Internet services absent smart government policies. Private companies consolidate, gain scale advantages, and crush the competition absent at least strong antitrust policies.

2) We can have a market for broadband services if we separate the physical infrastructure from the services. In this scenario, a network owner would not be allowed to offer services directly to end users. Independent service providers would use the network (under equal terms) to offer services to businesses and residents. This is the wholesale-only model (most associated with UTOPIA) and the closest examples in other infrastructure is the streets or airports. However, federal policymakers are too beholden to big corporate interests to pursue these policies; if a community wants an open access broadband market, it has to build its own network.

Nevertheless, Sandel's discussion of markets and the insistence of some that markets can solve everything struck a cord with me. I'm a big believer in functioning markets -- which is why we work so hard to help communities that are stuck with only one or two distant corporations controlling all the broadband infrastructure. The refusal of big carriers to invest in communities skews many of the markets within those communities.

So we are careful when we talk about markets. Given present technology, both wired and wireless, it is foolish to believe markets alone can solve our broadband problem. Which is what brings me back to Sandel's article in the Atlanic:

The great missing debate in contemporary politics is about the role and reach of markets. Do we want a market economy, or a market society? What role should markets play in public life and personal relations? How can we decide which goods should be bought and sold, and which should be governed by nonmarket values? Where should money’s writ not run?

From our narrow broadband perspective, infrastructure should be governed by nonmarket values. Though it may cost more to build networks in rural America than in the metro, everyone should be connected with fast, affordable, and reliable networks that are responsive to their needs. The interesting result is that markets actually work much better than when many are denied participation by lack of modern infrastructure.

In a review of Sandel's work, Michael Ignatieff argues that Sandel misses some of the key issues that have deliberately led us to this place.

We did not drift into this new world of money or arrive here by accident. Powerful interests have carried us here, and it is up to the people acting together to take their republic back. A society is not a market. It is a political community. Restoring the virtue of its citizens demands a politics equal to the challenge of virtue’s enemies.

In short, we need to take the task of governing ourselves more seriously. We cannot allow moneyed interests to continue corrupting our legislatures. Community Broadband Networks is a project of the Institute for Local Self-Reliance, which offers a variety of solutions for communities that want to be independent and take the idea of self-determination very seriously.