Wireless

I've often wondered what it would look like if a reporter wrote about a Wi-Fi network without any ideological baggage to slam it. Now you can see - Mollee Francisco wrote a lengthy and fair article for a local paper in Chaska, a suburb of Minneapolis.

Like so many publicly owned citywide Wi-Fi networks, Chaska.Net accomplished many goals but was a disappointment for others. In particular, it was more expensive and the technology was more difficult than expected, but it introduced faster broadband than was available at the time.

It continues to service 2100 customers, one of which is a household with close friends of mine. They love having the option of taking service from the City - they've been happy with the customer support and lower prices. That the speeds are slower than what cable networks offer doesn't bother them, they prefer to save the money.

The article also discusses the wireless network in Buffalo, Minnesota, a city further away from the metro than Chaska that sees a brighter future for its public wireless network.

As we have noted previously, Longmont, Colorado, has seen a number of private companies attempt to offer Wi-Fi broadband and then go out of business. As Colorado preempts local authority by requiring a referendum by the city before it can offer services itself, Longmont recently had a vote to authorize telecommunications services. Voters defeated the option.

As is common in these referendums, voters were blanketed with reasons to vote against it as incumbents (Qwest and Comcast) spent $200,000 opposing competition whereas the city is prevented by law from advocating for a ballot measure.

Now the Wi-Fi network will be auctioned off in pieces because it cannot pay taxes.

Ohio-based DHB Networks owes the Boulder County treasurer’s office $87,000 in unpaid business personal property tax, and the county demanded the company cease operations unless it pays those taxes.

DHB also owes the city of Longmont. Longmont-based RidgeviewTel is running the network, at least until the Wi-Fi equipment is auctioned off Thursday — at which point, 400 to 600 customers will be without Internet access, RidgeviewTel CEO Vince Jordan said.

Though the city already has fiber assets that could be used for backhaul as well as other expertise it could use in continuing to run the network, it cannot step in to run a network that would be useful to the community:

While the city can step in and operate the system, it would be only for municipal needs — such as police, fire and utility services — and not to provide Wi-Fi to customers.

“Our hands were always tied,” Roiniotis said. “We could buy the system and operate it, but only for our own purposes. We can’t provide the retail part of it.”

The city’s hands also were tied when it came to campaigning. State law bans governments from spending public money to campaign for or against local ballot questions.

Though 400-600 people may not seem like a lot of people to leave stranded, many of those on the network were the ones that needed a low cost alternative. This is one of the reason some hoped for a last minute resolution to the impending auction.

The city doesn’t plan to bid on the Wi-Fi equipment because owning the equipment doesn’t make sense if the city can’t operate an wireless service — or even partner with a private company to provide it, director of Longmont Power & Communications Tom Roiniotis said after the council meeting Tuesday night.

Several residents told the council Tuesday night that they rely on wireless Internet service as a less-expensive alternative to Qwest’s DSL or Comcast’s cable broadband.

Some may believe a required referendum to offer retail telecommunications services is a good idea or at least a relatively harmless barrier as local officials should be able to demonstrate public support for such a significant investment (and Colorado's majority-support referendum is certainly less onerous than Minnesota's 65% super majority requirement).

While it is true that local officials should be able to demonstrate strong community support, the reality is also that a referendum allows absentee opponents a great opportunity to dump a lot of money into the community to confuse and obfuscate the issue while supporters are outspent (often on the order of between 10:1 to 25:1) and City Hall is prevented by law from supporting the referendum.

For this reason, we oppose such referendum requirement -- remember that these decisions remain accountable to the public via the democratic process. Additionally, many communities already place requirements for referendum on communities when they are financing the network, providing an additional check once they have developed a plan.

UPDATE: As for Longmont, the wireless network has found a new private buyer that will be investing in WiMAX apparently.

Many have held up the CyberSpot Wi-Fi network in Florida's Saint Cloud as a successful example of public provisioning of wireless. From my perspective, the network was always interesting in that it did not attempt to pay for itself out of network revenues. The city built the network and provided services over the 15 square miles for free - they viewed it as a public service.

The network start-up cost was $2.5 million and was funded by the Economic Development Fund. It cost another $370,000 each year in operating costs - some $30,000 a month. Some 77% of the city used the network within half a year according to Free Press. St. Cloud has some 30,000 people and had at least 8500 unique devices connect to it monthly in recent months - due to NAT routers (non-geeks, ignore this) we can safely assume that there are more than 8500 devices using the network.

In order to keep the local taxes level, the City Council decided to cut Cyberspot along with a number of a other programs. Popular outrage led to another meeting in which many people testified that they wanted the network to remain funded. The Orlando Sentinel covered the extension of the city service for 3 more months and public reaction:

Scores of angry residents packed commission chambers Thursday, demanding that the city not pull the plug. " St. Cloud is not a hick town anymore," said resident Keith Harris. "We're country folks, but we're not backwards. One of the reasons for that is our Internet."

One of the people (in part 2 - the second video below) noted that the cost to him for raising taxes to cover CyberSpot would be a few dollars a month. The cost of eliminating CyberSpot to him is far greater - he will now have to pay ten times as much to get an Internet connection.

I watched the first half hour of the meeting and found the public comments quite interesting. The rest are probably interesting as well - you can find all the videos here.

Update: The network stopped offering public service on February 16, 2010.

On Tuesday, September 15, EPB, the public power utility serving Chattanooga and nearby communities in Tennessee, rolled out fully fiber-powered triple-play services to 17,000, a number expected to grow by July 2010, when services will be available to some 100,000 people and businesses. It will take three years before all 160,000 potential subscribers are passed.

Chattanooga has had a relatively rough time creating the network due to the litigious nature of its incumbents, who have filed 4 lawsuits to stop the project only to have each of them dismissed by the courts. (This is a predictable outcome, many of these companies file frivolous lawsuits to intimidate communities with lost time and legal fees - leading to a no-lose situation for companies that invest more in lawyers than in the networks communities need in the modern economy.)

The Tennessee Cable and Telecommunications Association kicked off the lawsuits in 2007 and Comcast chimed in a year later. As has been done in other communities, the private companies alleged the power utility was cross-subsidizing its triple-play telecom offering with revenues from the electric side. Aside from this just being a poor business practice, the companies say such cross-subsidization would be unfair to them even as major carriers routinely cross-subsidize from community to community - overcharging in non-competitive markets to make up for keeping prices low in competitive markets.

Nonetheless, public power companies and other public agencies have learned to keep meticulous books to show they are not cross-subsidizing, something courts recognize each time their time is wasted by lawsuit-happy incumbent providers.

EPB has long offered some telecom services. Starting nearly 10 years ago, the power utility stepped up to ensure businesses had access to the telephone and broadband networks they needed. Those services clearly scratched an itch as they had more than 2,300 customers before beginning to expand the network to everyone.

EPB's footprint includes over 168,000 electrical customers scattered over 600 sq. miles that reach into northern Georgia. As the fiber network expands to cover the full territory, it will quickly become the largest publicly owned fiber network in the country - making Chattanooga the envy of larger cities. A recent article in Business TN made just this point:

Josiah Roe of Medium, formerly Coptix, a Web graphic design company, cites the ability to upload and transfer large files with the "comprehensibly better product" as an advantage for his company. "When I go to Chicago or larger cities and they hear we have [FTTH], they're just amazed to see a city of our size doing something like that," Roe says. He adds that, "Chattanooga is very progressive and forward-thinking" in its fiber initiative.

One of the reasons publicly owned fiber networks are commonly built by public power companies is because power companies already need fiber to reliably transmit data in real-time to monitor many areas of the grid. This fiber network will be used extensively for electrical uses, which is why the electricity side of EPB is paying for $160 million of the $220 million expected expense. EPB has applied for $111 million from a Department of Energy smart-grid stimulus grant.

Though many utilities are turning to wireless for smart-grid data transmittal, EPB fears its topology will interfere with long-range wireless solutions. Fiber is considerably more reliable, but the upfront costs are indeed higher. EPB is not actually running fiber to every home for smart-grid applications, just those who are taking telecommunications services. Those who do not take telecom services will have an electric meter wirelessly connect to a mesh network that uses a nearby fiber-connected home to send and receive usage data.

Some have claimed the electrical side of EPB should pay less for the fiber network but the Electric Power Research Institute (EPRI) has validated the EPB numbers. Additionally, people in the smart-grid pilot project are already seeing benefits. From that article:

EPB hopes to recoup its investment primarily from not having to continue to manually read its 160,000 meters, cutting the theft of power from altered older-design meters and generating extra revenues from new video and telecommunications services made possible by the fiber-optic network.

Over the next 3 years, EPB expects to sign up at least 35% of its footprint for its telephone, Internet, or television services. Comcast has made now Chattanooga a priority for investment, offering its "up to" 50Mbps down cable network (often paired with a paltry 5Mbps upstream connection). As usual Comcast will advertise its "introductory" rates that increase dramatically after a set period of time; I have yet to find a publicly owned network that uses such annoying gimmicks.

Katie Espeseth, vice President of EPB Fiber Optics, explained why:

“We’re entering the market with a consistent and clear price — it is not a temporary, promotional price,” Ms. Espeseth said. “Because of our fiber-optic infrastructure, our picture quality is clearer and more consistent and our ‘Fi-speed’ Internet service is consistent and more reliable.”

They offer the handiest package picker I have ever seen from a service provider (though I confess I am not an expert in that). It shows you all the different options and lets you customize your bundle, constantly updating the price. Like other publicly owned networks, EPB wants to offer as much local content as possible. Compare this to major cable companies, that often refuse to live up to their franchise requirements and must occasionally be sued to meet their obligations. EPB is actively looking for local content to put on the television, including things like youth sports that they will put on video-on-demand.

From what I can tell from afar, it looks like EPB is pursuing a strategy of "upping the ante." Rather than try to beat Comcast just on prices, they are offering faster services at existing prices (not necessarily the "intro" pricing used by many carriers to hide the actual cost of services). Note that the slowest broadband connection is 15Mbps/15Mbps - speeds that are faster than the best speeds in most communities around the country. EPB is offering services that will ensure any subscriber can use multiple modern applications simultaneously - an increasingly common need as households continue getting more bandwidth-hungry devices.

Chattanooga's network is exciting and looks to be a great investment for the community. Community Networks generally have no problem of signing up 20% in the first year or two, so getting to 35% in three years should not be difficult. In the meantime, the network is already creating jobs. EPB has hired 70 full-time installers and more temporary workers in order to add 100 subscribers a day to the network.

Espeseth has estimated 2,600 new jobs will be created in the greater Chattanooga area from the fiber network and resulting economic development. Another article puts a number on the projected economic development, expecting "almost $850 million in value from both communications and smart grid services, including things like jobs and energy savings."