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Chanute City Leaders Approve Financing Strategy for FTTH in Rural Kansas

Chanute's City Commission passed a motion this month to fund its planned FTTH project with revenue bonds, bringing the entire community closer to fast, affordable, reliable connectivity, reports the Chanute Tribune

In addition to authorizing a plan to secure $18.9 million in revenue bonds, the motion also included funds for a pre-deployment baseline analysis focused on economic development and funds to hire an attorney. The bonds include debt service reserve funds and additional funding to make early interest payments. The plan determines the city will pay off the investment in a little over 14 years, based on a 45 percent take rate.

The Kansas Corporation Commission (KCC) must approve the plan. The KCC is a state regulatory body with a variety of responsibilities, including regulating telecommunications utility rates. The KCC also handles rates for electricity, natural gas, and liquid pipeline services. They handle safety issues, licensing, energy conservation, etc. If the KCC does approve the plan, the bonds can be secured without a public vote unless the city receives any petitions. Chanute still plans on providing residential gig service for $40 per month.

According to the Tribune, 62 percent of 1,030 returned surveys indicated yes or maybe as to whether or not they would be interested in signing up for high-speed service at home or at work; 38 percent said no. City officials are optimistic that the project will blossom even beyond those figures:

“I think once it starts rolling out, a lot of people will see what type of services they’re getting through the city,” [Mayor Greg] Woodyard said, “and they’ll get those bundle packages and we’ll be able to offer them a better product than they’re currently getting at a cheaper price. I think more people will sign up for it in that point in time.”

Woodyard also noted that Chanute is setting an example for other Kansans suffering from poor connectivity:

“A lot of other communities are looking at starting to do this, possibly,” Woodyard said. “We are the trendsetters for the state of Kansas. Everybody’s looking at us to see how we go through the process of doing the fiber project.”

For the complete story on Chanute's network, download our 2012 report Chanute’s Gig: One Rural Kansas Community’s Tradition of Innovation Led to a Gigabit and Ubiquitous Wireless Coverage.

LPC Residential Gig Service in Longmont Has A New Name; Available November 3rd

Big changes are happening in Longmont as the LPC builds out its network expansion. In addition to new services and new pricing, LPC for residents has a new name - NextLight. At a recent city council meeting, LPC announced that a number of residents in south central Longmont will be able to enroll for NextLight services as soon as November 3rd.

Homeowners who sign up within the first three months that service is available in their area, will get 1 Gbps symmetrical service for about $50 per month or half the regular residential price. Those customers, considered Charter Members, will keep the introductory price as long as they keep their service and will take that rate to their new home while also reserving that rate for the home they leave. The Times Call reports:

And if a homeowner does not sign up in the first three months, they could still obtain a customer loyalty price after one year, knocking the regular price down from $100 a month to $60 a month.

The city will also offer a lesser speed of 25 megabits per second for both uploading and downloading for about $40 a month and that price is not discounted for charter members or 1-year-members.

 At the meeting, LPC Director Thomas Roiniotis explained the reason for the new brand:

NextLight was named with Longmont's original municipal electricity utility that the city acquired in 1912 in mind.

"What we're saying is now, today, with the same type of community support, we're building a network that uses beams of light to transmit information," Roiniotis said Monday.

Correcting Community Fiber Fallacies: Attacks on LUS Fiber

In just the last year the Lafayette Utility System (LUS) gigabit network has attracted 1300 high-tech jobsChairman Wheeler praises the network for doing what many communities hope to do, but cannot because of state laws limiting municipal broadband networks. Critics are desperate to discredit the network, using false statements and misinformation.

The Reason Foundation released a paper by Steven Titch in November, 2013, to discredit LUS Fiber. Here we offer a point-by-point rebuttal of the report. Titch makes numerous claims that he does not support with any evidence. Much of the evidence he uses in support of other claims is out of context or erroneous. And even then, his worst criticism is that the network may struggle in the future but is not currently failing.

Our critical response to Reason Foundation's report (called Lessons in Municipal Broadband from Lafayette, Louisiana) should be helpful to any community considering its own municipal network investment. This document is the first in a series of critical works that we are calling the "Correcting Community Fiber Fallacies" series.

The official page for Correcting Community Fiber Fallacies: LUS Fiber is here, but you can get the pdf directly if you prefer.

Don't forget that you can sign up for our weekly newsletter here - so you won't miss these important stories.

Community Broadband Networks is committed to helping policy makers understand the reality and challenges of community fiber. Correcting Community Fiber Fallacies (CCFF) is designed to correct myths surrounding municipal fiber, and provide the information needed to counter erroneous claims.

Steven Titch's original report can be found at reason.org.

New Report Details Local Government Efforts to Improve Minnesota Connectivity

In our latest report, All Hands On Deck: Minnesota Local Government Models for Expanding Fiber Internet Access, we analyze how local governments in 12 Minnesota communities are expanding 21st century Internet access to their citizens.

In 2010, the Minnesota legislature set a goal for 2015 - universal access to high speed broadband throughout the state. Even though we have the technology to make that vision a reality, large swaths of the state will not meet that goal. Nevertheless, local folks who have chosen to take control of their connectivity are finding a way to exceed expectations, surpassing the choices in many metropolitan regions.

Some of the communities we cover include:

  • Windom, which is one of the most advanced networks in the state, built their own network after their telephone company refused to invest in their community.
  • Dakota County showed how a coordinated excavation policy can reduce by more than 90 percent the cost of installing fiber.
  • Lac qui Parle County partnered with a telephone cooperative to bring high speed broadband to its most sparsely population communities.

We delved into networks in Anoka, Carver, Cook, Lake, and Scott Counties. The report also shares developments in the municipalities of Chaska, Buffalo, and Monticello. We tell the story of RS Fiber, located in Sibley and part of Renville County. These communities provide examples of municipal networks, a variety of public private partnerships, and "dig once" policies.

This week in Minnesota, the governor’s office began accepting applications for the state’s new $20 million initiative Border-to-Border program. We hope this new report will serve as a resource for potential applicants and other community leaders across the U.S. interested in taking charge of their broadband destinies.

Read and download the full report [PDF].

Three New Companies Move to the Silicon Bayou

In the past few months, Lafayette has drawn in three high tech companies that will create approximately 1,300 well-paying positions. In addition to the community's commitment to boost its high-tech workforce, better connectivity offered by LUS Fiber helped attract the new businesses.

According to a Daily World article, the most recent addition is Perficient, Inc. The information technology and management consulting company is based in St. Louis. Perficient will add 50 new positions by the end of 2015 and another 245 over the next 6 years; average annual salary will be $60,000. The area should also see 248 additional indirect jobs. Perficient leadership intends to recruit from South Louisiana Community College and University of Louisiana at Lafayette.

This past spring, CGI announced it would employ 400 high-tech employees in a new finance facility in Lafayette. CGI will also recruit from the local high-tech educational programs. James Peake from CGI told the Advocate that the company has made an effort to keep tech positions "onshore" rather than sending them overseas. From the article:

CGI Vice President Dave Henderson cited UL-Lafayette’s top-ranked computer science program and Lafayette’s growing workforce and fiber-optic network.

This past summer, start-up Enquero announced it would open a tech center in Lafayette. The Milpitas, California company plans to hire 350 new employees by the end of 2017. City officials also expect to see 354 new indirect positions. According to Bloomberg Business Week, Enquero executives considered New Orleans, Baton Rouge, and four other states.

From City-Parish President Joey Durel's official statement:

"These are exactly the kinds of jobs we had in mind when we launched Lafayette's fiber-optic initiative in 2004, so I am thrilled to see that companies are starting to recognize what Lafayette has to offer with its affordable, gigabit speeds...I know Enquero will not regret their decision to locate in Lafayette. This community’s investment in itself is paying off.”

The Guardian Visits Chattanooga

The Guardian recently ran an article covering Chattanooga EPB's fiber network. The article tells the story of the birth of the network, the challenges the community faced to get its gigabit service, and how the network has sculpted the community.

Reporter Dominic Rushe, mentioned how the city has faced legal opposition from incumbents that sued to stop the network. They continue to hound the EPB today, most recently by trying to stop the city's FCC petition to expand its services. But even in a fiercely competitive environment, EPB has succeeded. From the article:

The competitive disadvantage they face is clear. EPB now has about 60,000 residential and 4,500 business customers out of a potential 160,000 homes and businesses. Comcast hasn’t upgraded its network but it has gone on the offensive, offering cutthroat introductory offers and gift cards for people who switch back. “They have been worthy competitors,” said [Danna] Bailey,[vice president of EPB]. “They’ve been very aggressive.”

Rushe spoke with Chris:

"In DC there is often an attitude that the only way to solve our problems is to hand them over to big business. Chattanooga is a reminder that the best solutions are often local and work out better than handing over control to Comcast or AT&T to do whatever they want with us,” said Chris Mitchell, director of community broadband networks at advocacy group the Institute for Local Self-Reliance.

A key difference between a Comcast or an AT&T and EPB goes beyond the numbers. Rushe described the artistic renaissance happening in Chattanooga with the help of top notch service from EPB:

The city is making sure schools have access to devices for its children to get online. Fancy Rhino, a marketing and film production firm backed by Lamp Post, has been working with The Howard School, an inner-city school, to include them in the city’s renaissance.

...

Bailey said EPB could afford to be more community minded because of its structure. “We don’t have to worry about stockholders, our customers are our stockholders. We don’t have to worry about big salaries, about dividends. We get to wake up everyday and think about what, within business reason, is good for this community,” she said.

“The private sector doesn’t have that same motivation. It’s perfectly fair, they are motivated by profits and stockholders. they have a lot of capital already invested in existing infrastructure. It would be costly to overbuild themselves.”

The local business environment is, naturally, shifting toward a high tech center. Rushe checked in with one of the many incubators, Lamp Post, in the once abandoned downtown district:

“We’re not Silicon Valley. No one will ever replicate that,” says Allan Davis, one of Lamp Post’s partners. “But we don’t need to be and not everyone wants that. The expense, the hassle. You don’t need to be there to create great technology. You can do it here.”

Mayor Andy Berke addressed the community's drive to offer gig service:

Berke said they had no choice. “The Gig wasn’t coming here anytime soon without us doing it,” he said. “It was going to go a lot of places before it came to Chattanooga. For us, like a lot of cities, you either decide to do it yourself or you wait in line. We chose to do it ourselves.”

Vermont Draft Telecom Plan Fails to Deliver on Many Fronts

Last week, the Vermont Department of Public Service began a series of public hearings on the public comment draft of its State Telecommunications Plan. The plan is intended to asses the current state of the telecom landscape in Vermont, map out goals and benchmarks for the next 10 years, and provide recommendations for how to achieve them. The plan sets a target of 100 megabit per second symmetrical connections for every home and business in the state by 2024.

Oddly enough, achieving that even today would put them behind many metropolitan areas across the United States. The technology needed to deliver 100 Mbps connections is essentially the same that would be used to deliver 1 Gbps, begging the question why such a limited goal?

The 100/100 mbps symmetrical target is for 10 years into the future, but in the nearer term the plan calls for universal 4/1 Mbps coverage, raised to 10/1 Mbps coverage by 2020. While it may at first glance seem reasonable to set gradually rising targets, these long and short term goals actually have the potential to conflict with each other.

As pointed out by Vermont Public Radio, the 100/100 Mbps standard would likely require universal FTTH, or at least fiber to the node combined with other technological advances and investments. Meeting this goal would require a huge investment in next generation fiber optic infrastructure, yet the Telecommunications Plan calls for funding priorities to be focused on achieving universal 4/1 mbps coverage for the next 6 years. This lower standard will likely be met with a combination of last generation technologies like copper wire DSL and wireless that are incapable of meeting the 100/100 standard.

Continuing to build out older systems while deferring investments in fiber, which is adaptable to meet just about any future need, seems illogical. It’s a bit like saying you’re going to put all your expendable income for the next six years into repairing your VCR and buying tapes, while promising you’ll buy a DVD player immediately after. 

While the goal of first guaranteeing all Vermonters some basic level of coverage is admirable, Vermont can do better by setting higher goals for itself. However, a real plan would require Vermont to actually invest in better connections rather than continuing to award grants to pokey incumbent providers like Comcast and FairPoint.

EC Fiber Logo

Leslie Nulty, a former Project Coordinator with the locally-owned, open access EC Fiber Network in the eastern part of state, put it best in her scathing criticism of the plan:

The long-range vision is admirable, but unfortunately the plan has no guidance at all as to how to reach it. It’s near-term guidelines, on the other hand, assure that current public policy will hinder, if not completely block, achievement of the long-term “Vision.”

Another concerning piece of the Plan is its decidedly skeptical attitude toward public networks, or anything that deviates from the standard playbook of offering grants to incumbent provider to entice them to build. From page vii of the Telecommunications Plan:

7. Vermont policy makers should carefully consider the potential negative outcomes of state and municipalities directly competing with private firms in the provision of telecommunications services, especially in areas where consumers are adequately served. Vermont should refrain from policies, including financial incentives, that have the net effect of diminishing competitive choice in the marketplace.

There is no evidence that municipal networks diminish competititon while there is plenty of evidence that municipal networks have resulted in more competition and increased investment from incumbent providers. The idea that more competition results in less competition is worthy of an explanation from George Orwell. 

“Competitive choice” is another goal that sounds good, but in this context it is used primarily to discourage investment in local networks that allow communities to determine and meet their own needs. To communities that have limited or no broadband access, this in effect announces that the state has little interest in helping them build their own networks, they should just sit tight until they get an already obsolete 4/1 mbps connection from a private provider, subsidized by the state, sometime around 2017 or 2018. 

On the whole, this Telecommunications Plan offers minimalist requirements for “basic” broadband that are already obsolete, and completely ignores other important measures of quality connectivity, such as latency. It offers essentially no new funding to back up its promises, with only vague mentions of tapping “public and private sources” while using existing revenue streams to invest in meeting outdated standards through private providers. The list of recommendations mostly read like an endorsement of the status quo, which stands at odds with the headline grabbing pronouncements of long-term goals. In short, it seems like a plan designed to have the most public relations impact with the minimal expense of political, financial, or even intellectual capital. 

For a more detailed breakdown of the Vermont Telecommunications Plan’s failings from someone more versed in the local landscape, read the full testimony given by Leslie Nulty [pdf] at a public hearing on the issue. She touches on all the issues mentioned above and a variety of others, from the plan’s lack of support for open access network models to new funding mechanisms preferable to grants to incumbents, such as revolving loan funds to finance network buildouts. 

Center for Public Integrity Covers Big Telecom Attacks on Munis

The Center for Public Integrity recently published an excellent article worth sharing. In "How big telecom smothers city-run broadband," Allan Holmes describes the money-for-infleunce machine at the state level, connects the dollars, and reveals bedfellows. The article is part of a series investigating the political power of big cable and telecom companies.

If you are a regular at MuniNetworks.org or any other news source covering telecommunications, you are familiar with the renewed push to restore local telecommunications authority that began in January of this year. Holmes provides a little background on the court case that inspired FCC Chairman Wheeler to publicly state that the agency is serious about restoring local authority.

Since those developments, an increasing number of journalists have reported on how we came to have barriers to municipal networks in some 20 states. The revived interest has further revealed that state legislatures are big benefactors of campaign contributions from cable and telecom leaders. "Think tanks" aimed at protecting industry giants and conservative millionaires prove to be at the heart of this payola. Holmes does an excellent job of simplifying the web of political influen$e that dooms millions of people to dial-up, outdated DSL, and aging cable infrastructure.

Holmes follows the story of Janice Bowling, a state senator from Tennessee representing the district that is home to LightTUBe in Tullahoma. When she introduced a bill to allow LightTUBe to expand to serve surrounding communities, she did so because:

…I believe in capitalism and the free market. But when they won’t come in, then Tennesseans have an obligation to do it themselves.

When it appeared the bill might get some traction:

That’s when Joelle Phillips, president of AT&T’s Tennessee operations, leaned toward her across the table in a conference room next to the House caucus leader’s office and said tersely, “Well, I’d hate for this to end up in litigation,” Bowling recalls.

Holmes delves into the Herculean efforts by incumbents to quash municipal network projects in other communities, such as Lafayette, Louisiana. Millions of dollars have been spent on lobbying and lawsuits instead of upgrades to improve services or connect more potential customers.

For the next three years, Lafayette spent $4 million responding to three lawsuits and subsequent appeals from BellSouth, which AT&T bought in 2006, and Cox.

The article addresses the fact that better connectivity leads to better economic development. This is only one of many stories from Tullahoma:

Agisent Technologies Inc., which provides online records management for police departments and city jails, moved to Tullahoma in 2011 because it needed a fast reliable broadband network that had a backup if the connection failed, said David Lufty, the company’s president.

Charter and AT&T couldn’t offer redundancy, but LightTUBe could.

“Since we’ve been here, we haven’t had more than five minutes of downtime in almost three years,” Lufty said.

Holmes compares Tullahoma, where job growth outpaces the state average, to Fayetteville, North Carolina. Fayetteville, struggles to beat down unemployment. All the while existing fiber resources that could be used for local business and residents sits untapped due to a 2011 state law. When a Fayetteville Senator tried to exempt his community through legislative process, he was personally attacked in the Chambers. Fayetteville did not get its exemption.

For Steven Blanchard, chief executive of Fayetteville’s Public Works Commission, prohibiting Fayetteville residents from using the fiber network that’s already there doesn’t make sense.

“Why shouldn’t we be allowed to sell fiber if it runs by everyone’s house?” Blanchard said. “They are already paying for the fiber to be there, so why not allow them use it for telephone and Internet and capture back a lot of the cost they put in to have it there?”

The article offers some powerful graphics comparing services, state laws, and political influence dollars.

A must read! Don't miss it!

Sallisaw: The First Muni Fiber Network in Oklahoma - Community Broadband Bits Episode 114

Sallisaw is one of many small municipal FTTH networks that most people are not familiar with. For a decade, they have been quietly meeting their community's needs with DiamondNet. For this week's Community Broadband Bits, we learn more about it in a conversation with Assistant City Manager Keith Skelton and Network Communications Supervisor Danny Keith.

Sallisaw built their network after incumbents failed to provide broadband in the early 2000's, becoming the first triple play municipal fiber network in the state. Nearly 2 out of 3 people take service from DiamondNet, which is operated by municipal electric utility.

They pride themselves on doing much more for the community than the incumbent providers do - particularly responsive customer service and creating lots of local content. They are also building a wireless network to serve people outside of town who currently have limited Internet access.

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 17 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."

Austin, Minnesota Releases Fiber Network Feasibility Study Results

Austin has been thinking about getting a gig for a while now. The city of 25,000 near Minnesota’s southern border had campaigned to be picked for the initial Google Fiber deployment, but was disappointed when Google selected Kansas City instead in 2011. As with some other cities around the country, however, the high profile Google competition got Austin thinking about the benefits of a gigabit fiber network, and how they might bring it to their residents. Last month, a committee tasked with bringing such a network to every premises in Austin released a feasibility study they commissioned, with generally favorable results.    

The study recommended further exploration of a universal fiber optic network, but found the idea to be generally feasible. The cost of such a network was estimated at $35 million, and would cover the entire footprint of the Austin Public School District, which extends to rural addresses well beyond the city limits. The study recommended universal fiber-to-the-premises (FTTP) for many of the same reasons we’ve been talking about it for years: its nearly unlimited data capacity and speed, future-proof and damage-resistant properties, and reliability.  

The study was commissioned by the Community Wide Technology committee of the Vision2020 campaign, a broader planning movement to revitalize the greater Austin area. The Technology committee has since launched the GigAustin website and campaign to advocate for a FTTP network.

The GigAustin team has representation from the Austin Public School District, the city public power utility, private companies and foundations, and other potential anchor institutions. Hormel, the food products giant headquartered in Austin (and the people who brought you the SPAM Museum), is a major employer in the area and their presence on the GigAustin team and support of the feasibility study is notable.   

This is no slam dunk, however. The study did not recommend a specific funding source, and there appears to be little appetite for significant public expenditure

Committee members say the project could be funded in large part by state and federal grants and don’t currently plan to seek local tax dollars to pay for Gig Austin.

...The FCC set $100 million aside for broadband projects on July 11. In addition, Minnesota created the Office of Broadband Development in 2013 and budgeted $20 million to it earlier this year.

Securing grant funding from outside sources is nice, but not always possible - particularly when much of the community already has DSL and cable available. Given that the Austin network alone is projected to cost $35 million, it is easy to see how quickly $20 million or even $100 million could dry up on a statewide or federal scale. There are also hopes in Austin for securing grants from private nonprofits, which also seems like a long shot to make a significant dent in project costs. It is worth noting, however, that the funding for the feasibility study itself came from private sources: the Blandin Foundation, Hormel Foundation, and Ag Star Financial. 

There also does not appear to be any consensus yet on an ownership model, with both public and private options on the table. The public power utility, while participating in the GigAustin campaign, does not appear interested in ownership:

Austin Utilities General Manager Mark Nibaur said the company will likely partner with Vision 2020 and may contribute dollars to Gig Austin, but the utilities board may decide not to operate the fiber network.

“I don’t think there’s any interest in ownership,” he said.

While leaving the governance and ownership structures as an open question, the study did note that private providers were unlikely to build such a FTTP network any time in the foreseeable future (a finding that will surprise exactly no one). 

The next step in the process is a survey of Austin area residents to determine the level of interest in ultra high speed connectivity. The feasibility study estimated a take rate of 40-50% would be necessary for the network to be sustainable. The survey got under way in July, and should be completed in August or September.