In the case of muni systems, which are not-for-profit enterprises, one measure of “success” is defined as the level of their “take rate” – that is, the percentage of potential subscribers who are offered the service that actually do subscribe. Nationwide, the take rates for retail municipal systems after one to four years of operation averages 54 percent. This is much higher than larger incumbent service provider take rates, and is also well above the typical FTTH business plan usually requiring a 30-40 percent take rate to “break even” with payback periods.
Pole Issue Means More Delay For Lake County Project
Lake County, a rural area on the north side of Minnesota's portion of Lake Superior, has long suffered with just dial up and satellite, with slow cable connections available in some of the towns. After receiving a stimulus project to build a county-owned FTTH project connecting everyone, many thought their broadband troubles were over.
But Mediacom attacked first, with unsubstantiated allegations of rules violations that investigators found to be lacking in merit. When Mediacom announced it would not further delay the project with a lawsuit, we again thought the project would proceed.
But now a dispute over who owns some of the poles is holding up the project. The Lake County News reports that Frontier asserts ownership of some poles on which aerial fiber optic cables sit as the project nears completion of Phase One. From the article:
There have been questions over the ownership of these poles in recent weeks. The poles, many of which Lake Connections has already utilized for attaching fiber, are within Two Harbors city limits. Frontier, a telecommunications provider in Lake County, said Lake Connections connected to their poles without submitting permit applications.
In an earlier report (reprinted here on mobilitytechzone.com and edited to include comments from Frontier), Mayor Randy Bolen declined to take an official position on the dispute between Frontier Communications and the install company, Lake Connections.
According to that October 25th report, there was a pole agreement between the two, but the agreement did not approach the issue of pole ownership. Rather than bring up the issue during negotiations, Frontier has waited until now to raise the challenge. Also from the article:
Jeff Roiland, project manager for Lake Connections, said the city has been maintaining the poles in question for years and wonders why ownership is an issue. Two Harbors Mayor Randy Bolen conceded that the city has been maintaining and replacing the poles as needed, but he said the question of ownership never came up before the fiber project. Frontier said they didn't authorize this city-performed maintenance on their poles.
This is yet another case where ownership is important. Whoever owns the poles calls the shots. In communities where a public power company operates, the public owns the poles and can avoid difficulties in attaching radios or fiber. But where the poles are owned by another entity, as with Frontier, the community has to obtain permission to attach radios and fiber.
And after permission is obtained, the community often has to wait. Because attaching new things to poles sometimes requires other things to be moved to create the space, a process called "make ready." Companies like AT&T have long used the power over the poles to delay and harm competitors -- not by stopping them outright, but by charing high make-ready costs and taking a very long time to complete the process.
Frontier is also upset about where the fiber has been placed. From the same article:
Frontier has also challenged hierarchy, which determines where lines from different services are strung on poles. [Frontier Communications general manager in Northern Minnesota Kirk] Lehman stated that Lake Connections attached to their poles "without following industry standards that specify where the facilities of different entities are to be attached." Roiland said ownership must be determined before hierarchy can be challenged.
Though we are not about to take Frontier's word that Lake County violated any standards, it does raise another interesting point. The lowest wire on the poles is the first to be snagged by trucks or otherwise torn down in the event of accidents. So no operator wants to be the lowest line on the poles -- being higher on the pole means fewer interruption and lower operating costs.