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Wilson's Greenlight Leads North Carolina in Fast Internet

Publication Date: 
December 5, 2012
Author(s): 
Todd O'Boyle, Common Cause
Author(s): 
Christopher Mitchell, Institute for Local Self-Reliance

Following the collapse of key industries, a town of 50,000 in eastern North Carolina had to make a hard choice. It wanted to support existing businesses and attract new ones but the cable and telephone companies were not interested in upgrading their networks for cutting edge capacity.

So Wilson decided to build its own fiber optic network, now one of the fastest in the nation, earning praise from local businesses that have a new edge over competitors in the digital economy. In response, Time Warner Cable lowered its prices and modestly boosted available Internet speeds, contributing to the $1 million saved by the community each year.

Download Carolina's Connected Community: Wilson Gives Greenlight to Fast Internet here.

The Institute for Local Self-Reliance and Common Cause have just released a case study of how and why Wilson built Greenlight, a citywide next-generation fiber-to-the-home network that set the standard for connectivity in North Carolina. The report is authored by Todd O'Boyle of Common Cause and Christopher Mitchell of the Institute for Local Self-Reliance.

The network, owned and operated by the municipal utility, offer telephone, television, and Internet services to every resident or business in the city. Over 6,000 households and businesses have subscribed, a take rate of over 30% and growing. Additionally, the network has connected all of the schools with at least 100 Mbps connections. Downtown has free Wi-Fi and the library has benefited with a higher capacity connection for people looking for jobs and taking computer classes.

The Federal Communications Commission ranks North Carolina last in the nation in percentage of households subscribing to at least a "basic broadband" service, largely because Time Warner Cable, CenturyLink, and AT&T have declined to upgrade their networks to modern standards. Only 13% subscribe to a connection that is at least 4 Mbps downstream and 1 Mbps upstream -- the minimum required to take advantage of basic Internet applications according to the FCC.

This story was originally posted on the ILSR website.

This report is the first of two. The second will be published shortly and will feature a discussion of how Time Warner Cable reacted, pushing legislation through the General Assembly to block other communities from copying Wilson's success.

New Video: Community Fiber Networks Better than Phone, Cable Networks

Update: You can also watch the video over at the Huffington Post, in our first post as a HuffPo blogger.

While we were battling Time Warner Cable to preserve local authority in North Carolina, we developed a video comparing community fiber networks to incumbent DSL and cable networks to demonstration the incredible superiority of community networks.

We have updated the video for a national audience rather than a North Carolina-specific approach because community fiber networks around the country are similarly superior to incumbent offerings. And community networks around the country are threatened by massive corporations lobbying them out of existence in state legislatures.

Feel free to send feedback - especially suggestions for improvement - to broadband@muninetworks.org.

Without further ado, here is the new video comparing community fiber networks to big incumbent providers:

Video: 
See video

Public Testimony in Senate Finance Committee Against Time Warner Cable bill in North Carolina

We have again isolated individual comments from the arguments around Time Warner Cable's bill to strip local authorities of the right to build broadband networks vastly superior to their services. On April 13, the Senate Finance Committee allowed public comment on TWC's H129 bill. Craig Settles has posted an extended story about a small business struggling to get by with the existing paucity of service in her community.

There was no hope that I could efficiently communicate, collaborate, and share online documents and applications with clients and peer professionals. I couldn’t even buy a functional phone line. For years I paid for a level of service from Centurylink that I can only describe as absolutely embarrassing.

This bill will make it vastly harder, if not impossible, for communities to build the necessary infrastructure to succeed in the digital economy. Listening to those pushing the bill, it is very clear they have no conception of the vast difference between barely broadband DSL from CenturyLink and Wilson's Greenlight community fiber network -- essentially the difference between a hang glider and a Boeing 747. And many in North Carolina don't even have access to the hang glider! Yet the Legislature cares more about protecting the monopoly of powerful companies that contribute to their campaigns than ensuring all residents and businesses have access to the fast, affordable, and reliable broadband they need to flourish.

Thanks to Voter Radio for making audio from the hearing available.  Each of the following comments is approximately 2 minutes long.

With New Hope, North Carolina Broadband Struggle Continues

On Wednesday morning, March 22, the House Finance Committee will again consider H 129, a bill from Time Warner Cable to make it all but impossible for communities to build their own broadband networks. But now, as noted by Craig Settles, the momentum is shifting.

Last week, advocates had a big victory when Representatives Faison and Warren successfully amended the bill (each with his own amendment) to make it less deleterious to communities. Unlike the sham voice vote in the Public Utility Committee, Chairman Setzer of the Finance Committee had a recorded vote, allowing citizens to hold their representatives accountable.

After these amendments passed, the TWC lobbyist signaled for an aide. Shortly thereafter, the committee decided to table the matter until this week -- when TWC will undoubtedly try to remove or nullify those amendments.

In the meantime, AT&T has announced bandwidth caps, yet another reason the state is foolish to pin its broadband future on cable and DSL companies.

Compare AT&T's movement to less-broadband with Wilson Greenlight's recent dramatic price decreases in its ridiculously fast broadband network, causing at least one couple to move there! Greenlight is owned and operated by the public power company owned by the city.

Greenlight has signed up its first residential customers with the highest Internet speed available in Wilson.

Vince and Linda Worthington, former Johnston County residents, moved to Wilson after finding out that they could have access to 40 Megabits per second Internet speeds at a lower cost than what they were previously paying.

"We always wanted the 100Mbps service," she said. "When the price came down, we jumped on it." Greenlight, the city of Wilson's fiber-optic broadband network, has close to 5,600 cable, Internet and telephone subscribers. Greenlight sells its 100 Mbps symmetrical service, with the same upload and download speeds, starting at $149.95 per month as part of a package. Greenlight's 60 Mbps start at $99.95, 40 Mbps at $74.95, 20 Mbps at $54.95 and 10 Mbps at $34.95. Greenlight's 40 Mbps is becoming increasingly popular with customers, said Brian Bowman, Wilson's public affairs manager.

To recap, the publicly owned networks are investing in faster and lower-priced networks while private companies are simply trying to maximize their income from the old networks. Good deal if you can convince the Legislature to outlaw your competition....

TWC and its proxy in the Legislature, Representative Avila, wanted this bill to fly through as quickly as possible -- which is why the Public Utilities Committee cut off discussion with a sham voice vote long before most members were ready. But as the public has learned more, they are opposing TWC's power grab quite loudly. This from a Winston-Salem Journal editorial:

Internet-service providers can't have it both ways. They can't delay bringing high-speed service to North Carolina communities but then turn around and lobby the legislature to deny local governments the authority to establish municipal service if their residents want it.

….

Had the private companies tried to make their argument 15 years ago, they might have deserved some sympathy. But not in 2011. The Internet and high-speed access to it have now been available in North Carolina homes for well more than a decade.
They ignored a market, and local governments stepped in to provide a critical service. The legislature should kill this bill.

In an op-ed, Mark Turner recalls the crucial role of non-commercial coops electrifying the state when private companies saw no profit in it. An excellent read

Mark Turner dot Net

Citing the economics, private Internet providers have been slow to invest in the high-speed infrastructure that would connect these rural communities. That has a lot to do with why North Carolina ranks a paltry 41st in the nation for broadband access, according to Census Bureau statistics.
Having been snubbed by the private providers, some communities like Wilson and Salisbury have taken the same approach as they did 66 years ago: opting to build their own state-of-the-art systems when the commercial providers refused. Now the General Assembly, through a bill sponsored by Rep. Marilyn Avila, R-Raleigh, aims to throw substantial roadblocks in the way of communities seeking to serve themselves.

Columnist Scott Mooneyham also recognized the similarities to electrification:

In many ways, the issues involved aren’t very different from when investor-owned electricity providers were unwilling to bring service to small town and rural North Carolina early in the 20th century.

By the 1930s, the federal and state government were taking steps to encourage rural electrification and the formation of electric co-ops, including providing loans needed for the construction of the systems.

One of the first electric co-ops in the country was formed by Edgecombe County farmers.

Perhaps North Carolina legislators ought to contemplate what the state might look like today if their predecessors had quashed the aspirations of those farmers, rather than giving them tax breaks.

For a more substantive review of what folks in North Carolina are saying about this bill, Stop the Cap! has a great run-down.

What can we expect in the hearings tomorrow? Well, more lies from the cable industry, as recently quoted in an article about the bill:

"I am confident, at some point, that the state law will address this," said Marcus Trathen, an attorney with the [cable] association. "We have never said that cities should be prohibited. If they compete, they should be subject to the same rules as private companies."

We have already detailed (at the bottom of this post) the many ways this bill will introduce bigger barriers and unique regulation for public networks that do not apply to companies like TWC, but let's quickly refresh with two examples.

  1. If Trathen wants the same rules, then TWC will abide by the open meetings laws and publish budgets, business plans, etc., for the public to review. And communities get to vote on kicking TWC out of town.
  2. This bill must be redrafted not to prohibit communities from offering service outside town. NC law makes it very easy for TWC to offer state-wide service and communities should not have a barrier to do similar.

There you go, anyone reporting the lie that this is "level playing field" legislation should be confronted with the facts.

Things are looking way up in terms of preserving local authority to build these networks. Thanks to the rapid and enormous public outcry (making phone calls to state Reps can make a big difference!), the bill was slowed down so the public could get a better sense of exactly what TWC and Avila were conspiring.

Salisbury's Fibrant, realized this bill posed an existential threat to its future (despite the public lies of Rep Avila who claimed it did not target existing networks) because the bondholders need to be repaid regardless of whether TWC convinces the Legislature to shut Fibrant down. They hired a lobbyist. This came after their Mayor worked long and hard to get the Legislature to understand what it was messing with.

At $5,000/month, the cost is a pittance compared to the damage of allowing TWC's bill to shut down Fibrant (to clarify, the bill currently does not threaten Fibrant due to Rep Warren's amendment -- but TWC will do everything it can to remove that amendment).

We have long maintained that these issues have little to do with partisan politics and Salisbury's new lobbyist proves that point.

Council committed to use Fetzer, the outgoing N.C. Republican Party chairman and a former mayor of Raleigh, for one month and could retain him throughout the legislative session, which ends in July.

Preserving local authority cuts across Republican/Democratic Party lines. What often matters far more is how much cable and telephone companies have contributed to election funds for candidates.

And finally, another opportunity to promote the video we produced showing why community networks are so important in North Carolina.

Video: 
See video

Whose Internet? NC Communities Should Defend Freedom to Build Networks

Durham's Herald Sun published our op-ed about community broadband networks in North Carolina. Reposted here:

Who should decide the future of broadband access in towns across North Carolina? Citizens and businesses in towns across the state, or a handful of large cable and phone companies? The new General Assembly will almost certainly be asked to address that question.

Fed up with poor customer service, overpriced plans and unreliable broadband access, Wilson and Salisbury decided to build their own next-generation networks. Faced with the prospect of real competition in the telecom sector, phone and cable companies have aggressively lobbied the General Assembly to abolish the right of other cities to follow in Wilson and Salisbury's pioneering footsteps.

The decision by Wilson and Salisbury to build their own networks is reminiscent of the decision by many communities 100 years ago to build their own electrical grids when private electric companies refused to provide them inexpensive, reliable service.

An analysis by the Institute for Local Self-Reliance (http://tiny.cc/MuniNetworks) compares the speed and price of broadband from incumbent providers in North Carolina to that offered by municipally owned Greenlight in Wilson and Fibrant in Salisbury.

Wilson and Salisbury offer much faster connections at similar price points, delivering more value for the dollar while keeping those dollars in the community. For instance, the introductory broadband tiers from Wilson (10 downstream/10 upstream Mbps) and Salisbury (15/15 Mbps) beat the fastest advertised tiers in Raleigh of AT&T (6/.5 Mbps) and TWC (10/.768 Mbps). And by building state-of-the-art fiber-optic networks, subscribers actually receive the speeds promised in advertisements. DSL and cable connections, for a variety of reasons, rarely achieve the speeds promised.

Curbing innovation

The Research Triangle is a hub of innovation but is stuck with last-century broadband delivered by telephone lines and cable connections. In the Triangle, as in most of the United States, broadband subscribers choose between slow DSL from the incumbent telephone company and faster but by no means adequate cable broadband from the incumbent cable company.

A few DSL subscribers may have access to U-Verse, but most are waiting for someone in Texas (AT&T's headquarters) to authorize the upgrade to U-Verse (faster than typical DSL but much slower than full fiber-optics). On the cable side, someone in New York (Time Warner Cable's headquarters) decided to force subscribers in the Triangle to wait for cable upgrades long after many cities had received them.

Perhaps by the end of 2011, all businesses and residents in the Triangle will have access to the best broadband TWC and AT&T have to offer -- which is still inferior to that offered by Wilson, Salisbury, any community with Verizon's FiOS, and just about every major city in Europe or Asia.

The opposition

Under state law, communities can organize and build their own broadband networks to ensure their citizens have world-class access to the Internet. The argument for preempting this local authority features two diametrically opposed claims:

  • Communities should not build these networks because they always fail.
  • Communities should not compete with the private sector because they will drive the existing provider(s) out of business.

Interestingly, the preponderance of evidence actually weighs against both claims. The vast majority of community fiber networks have performed extremely well against great odds. After winning the costly, frivolous lawsuits filed against communities by incumbents, community networks have successfully competed against temporary, artificially low prices by competitors who use profits from non-competitive areas to subsidize their efforts to deny any subscribers to a new network.

The few community fiber networks that have struggled against these odds are presented as the norm by industry-funded think tanks that try to scare any community considering a broadband investment.

A public monopoly?

There are few, if any, instances where community networks have driven incumbents out of business. It is true that once a community network begins operating, incumbent profits decline, often because they lower prices and increase investments -- each of which greatly benefits the community. But even if that were not true, why should a local government in North Carolina care more for the profits of two massive out-of-state companies than for what is best for their citizens and the future of the community?

The incumbent lobbyists will say that local governments can just raise taxes to unfairly cross-subsidize the networks. The reality is that citizens enjoy having their taxes raised about as much as having their cable rates raised. Citizens have little recourse when cable companies raise their rates, but they can directly express their dissatisfaction with elected officials who arbitrarily raise their taxes, by voting them out of office.

Local control

Remember though, the argument here is not about whether any given community should build a network. Right now, communities make that choice themselves. For years, lobbyists have pushed the General Assembly to take that decision away, either directly or by creating a web of contrived obstacles.

On matters of essential infrastructure, communities should be free to decide whether they will build it or depend on others. For years, Mooresville and Davidson relied on Adelphia for cable access while the network fell into disrepair. In the wake of Adelphia's bankruptcy, they chose to take it over to avoid continued similar problems from TWC. In taking it over, they found it in even worse shape than expected, resulting in higher costs to fix it. This situation, fixing the failure of the private sector, is actually used by telecom companies to argue against public ownership.

There is a very good reason so many communities are considering a variety of broadband investments: private providers are not meeting their needs. The question is whether the General Assembly wants to let communities move forward as they choose, or let out-of-state companies decide the competitiveness of the state.

Interview with Wilson's Greenlight Community Fiber Network

This is a good 5 minute interview discussing what Wilson has done to build the first citywide FTTH network in North Carolina. Greenlight has a business customer taking 1Gbps -- something that would undoubtedly have been totally cost-prohibitive (and possibly just unavailable) if the City had not made its broadband infrastructure investment.

Toward the end, Brian Bowman is asked if he recommends all communities build a similar network. His answer is very wise: all communities should have the right to do it and they should decide for themselves based on their situation. That is our position as well.

Wilson's Greenlight Puts Election Debate on TV

When a debate between candidates for Wilson's sheriff proved too popular by far for the scheduled venue, Greenlight stepped in to televise it.

Jon Jimison, Wilson Times editor, said his phone has been ringing off the hook since the debate at Fike High School was announced. Fike holds a little more than 900 people. With the tickets snapped up on the first day of availability, televising the debate was what Jimison wanted.

"We're very happy the city and Greenlight are partnering with us on this event," Jimison said. "By having the debate aired on Greenlight it exponentially increases access to the debate so more residents can see it for themselves."

Greenlight is the community fiber network built by Wilson's public power company and is owned by the City.

Wilson is fortunate to have a publicly owned network able to step in and televise the network. In many towns, the incumbent is a private company that has little interest in helping out in such a situation. Thousands of towns do not even have a local cable presence they can call on if they were in this situation -- big carriers continuously consolidate and shut down local service centers to save money.

I recently visited Sibley County, Minnesota, where they are considering a publicly owned fiber-to-the-farm network. The programming they see on their TV comes from another state - Iowa! This is yet another reason communities should have networks that are directly accountable to them.

Wilson's Greenlight Ahead of Schedule, Deals with TWC Predatory Pricing

Wilson's Greenlight community fiber network is ahead of schedule. They continue to operate ahead of the business plan, despite a few difficulties that offer lessons to up and coming community networks.

We recently covered the fallout from their application to the broadband stimulus program where they had to disclose network information to their competitors.

Fortunately, that was not the only news last month from North Carolina's first all-fiber citywide network. They also surpassed 5000 subscribers and remain 6-9 months ahead of their business plan in take rate, according to the Wilson Times.

The number of customers is expected to reach 5,300 by the end of the fiscal year if the current trend continues, according to Dathan Shows, assistant city manager for Broadband and Technical Services. The city's current business plan calls for Greenlight to reach 5,000 customers by the end of the third full year of operation, which will be June 2011.

This is not the first time the network has exceeded projections; the network was built faster than expected and quickly jumped out ahead of take rate expectations.

One of the reasons Greenlight may be growing is its attention to local needs, as illustrated by the network finding a way to televise local football matches that otherwise would not have been available.

However, the Wilson Times story goes into much greater detail regarding the competition from Time Warner Cable. As we regularly see, Time Warner Cable is engaging in what appears to be predatory pricing to retain customers and starve Greenlight of new subscribers.

A lesson to other community networks, Wilson is documenting the deals TWC uses to keep subscribers. All communities should keep these records.

"Time Warner Cable's market tactics include anti-competitive pricing that interferes with Wilson's ability to secure customers through normal marketing," the application [for broadband stimulus] states. "TWC offers below-market rates to customers seeking to switch to Greenlight, locking them into multi-year deals in exchange for name-your-price rates that are not advertised and made on an ad hoc basis when customers call to switch to Greenlight."

Running the numbers of these discounts leads to a total community savings of over $1million a year that subscribers to Time Warner Cable are saving over what they would be paying in absence of a community network.

The article goes on to quote Catharine Rice, someone who has a very strong grasp on the reality of broadband in communities across the country.

Rice describes what Time Warner Cable is doing as "cross-subsidizing" and charging higher rates elsewhere so it can offer lower rates in Wilson. Rice said Time Warner Cable is keeping pricing below cost in Wilson to try to drive Greenlight out of business.

"Somebody has to start looking at what Time Warner is doing in Wilson," Rice said. "When I step back and look at this whole thing, it's clear as a bell what's going on. Time Warner doesn't want to upgrade its cable plant."

Let's take a look at the broadband Time Warner Cable offers and compare it to Greenlight. All speeds in Mbps. Time Warner Cable does not make it easy to understand what the upstream speeds are, so I tried to piece it together from a variety of sources.

TWC has much slower options, from a .768/.384 package up to a "turbo" 15/1 (for $56.90). Wilson offers only one internet-only package - a 20/20 connection for $59.95. If bundling, Wilson has 5 packages from 10/10 at $34.95/month to 100/100 for $300/month.

It should be noted that the 15Mbps down TWC offer is faster that what TWC offers in nearby communities, suggesting they either upgraded their Wilson plant slightly or they are just being more bold in exaggerating their services. Either way, I'm willing to bet that the actual TWC "up to" 15 Mbps is slower than the 10Mbps service from Greenlight.

It is hard to compare TWC to Greenlight, much like comparing a Vespa to a Ducati. Nonetheless, TWC's size and market power allow it to try to run competition out of the market.

Finishing up, another lesson to communities who are planning to build their own next-generation network: be aware that you will have to deal with people who do not pay their bills. Wilson has had to deal with what seems to be an abnormally high number of these:

To date, Greenlight has disconnected just over 1,000 customers due to nonpayment. Shows said these are customers who received Greenlight service but never paid a bill. As a result, the city has had to "tighten standards," Shows said, on deposits. How much a customer pays for a deposit is based on their credit rating and on the services to which they subscribe. The city's finance department handles collections for Greenlight.

An Unlevel Playing Field: Wilson Forced to Disclose Network Information to Competitors

I recently heard that the only place one finds a free lunch is in a mouse trap. As we sift through the lessons from the broadband stimulus programs, we have learned that the federal government preferred funding private projects rather than those that are structurally accountable to the community.

Before the first round of stimulus applications were due, many communities recognized the costs of applying were too high for them. Now, some are recognizing the high costs of complying with the many federal rules that come with accepting federal grants and loans (as detailed by Craig Settles).

And now, North Carolina's city of Wilson has found that applying for the broadband stimulus may have disadvantaged its FTTH network. Though the application was not accepted, the city has had to turn over its full application (chock full with proprietary information) to its competitors.

This is yet another example of ways in which the "playing field" is tilted against the public. The Wilson Times explained the situation and settlement.

The application included a proposed expansion of the network to provide reduced-cost or no-cost broadband lines to homes of Wilson County school children, a health network, increased lines for police and other improvements that would enhance the network in the city, Goings said.

When the North Carolina Telecommunications Association (with prominent member Time Warner Cable - incumbent cable provider competing with Wilson's Greenlight) asked to see the full application, the City refused to turn it over -- even after a court ruled against the City. The City argued the application contained key information regarding the policy and utilities that should not be made public for security reasons. When the Department of Homeland Security ignored the City's requests to intervene, the City was compelled to release the documents.

This is a particularly interesting juxtaposition as privately owned telcos and cablecos regularly argue against having to disclose any information about about their networks as a security concern. In this case, they are on record arguing the same information should be in the public domain.

As reported in the Wilson Times article,

"We have known from the very beginning that, if we built a fiber-optic network, it would basically be a situation where we'll constantly be in court with Time Warner," Goings said. "We're not surprised. I think this won't be the last time we have a court case with Time Warner."

I have been told by many community owned network operators that they have to deal with constant requests for information from the private competitors as a form of harassment and a means to get all kinds of data they would never share themselves. I first became aware of this Wilson lawsuit when reading an editorial in the Salisbury Post regarding transparency and the Fibrant network.

This is one of the big challenges a municipal system faces. It has to play by different rules than private enterprise does. While Time Warner can plan expansions in private, Fibrant and the city have to be open to public scrutiny, and competitors are part of the public.

If Federal programs want to create a "level playing field," they must require all applications are equally available to competitors. In the meantime, this is just another example of the ways in which privately owned massive incumbent providers have most of the advantages in offering broadband services.

Update: Our story kicked off greater tech coverage from DSL Reports and Ars Technica.

Wilson's Greenlight Releases Video Interviews with Satisfied Subscribers

Kudos to Wilson's Greenlight fiber network in North Carolina. They are featuring some interviews with people who like their services, two of which are embedded below.

Video: