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Rural Utilities Building Broadband Networks - Community Broadband Bits Podcast Episode 109

If you have doubts that we can or will connect rural America with high quality Internet connections, listen to our show today. Alyssa Clemsen-Roberts, the Industry Affairs Manager at the Utilities Telecom Council, joins me to talk about how utilities are investing in the Internet connections that their communities need.

Many of these utilities are providing great connections, meaning that some of the folks living in rural America have better -- faster and more affordable -- Internet access than residents of San Francisco and New York City.

We discuss the demand for better Internet access and the incredible take rates resulting from investment in some of the communities that rural electric cooperatives are serving.

UTC has a been a strong ally of our efforts to prevent states from revoking local authority to build community networks. Within UTC, the Rural Broadband Council is an independent operating unit.

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."

Another Colorado Community May Reclaim Local Telecommunications Authority

Boulder's City Council is considering November ballot question to restore local authority for municipal telecommunications services. The measure, if passed, will create an exemption to the 2005 Colorado law allowing Boulder to better use its existing fiber optic infrastructure.

Apparently, the Boulder community has a self-reliant streak. This is not the first time the Institute for Local Self-Reliance has reported on the community of 97,000. John Farrell, Director of the Democratic Energy initiative, has followed the grassroots campaign to establish a city-owned electric utility in Boulder.

The Daily Camera reports that City Council staff, in a memo to Members, recommend the community seek authority to make use of existing assets. The City owns an extensive network of conduit that it began developing in the 1990s. Boulder has aggressively expanded the network, leasing it to private partners and using the space for a fiber I-Net to connect over 50 municipal facilities.

The Boulder Research and Administration Network (BRAN) serves the City, the University of Colorado, the U.S. Department of Commerce, and the University Corporation for Atmospheric Research. Each of the four entities shared equally in funding the $1.2 million eleven mile network. Boulder is an administering partner for BRAN and hopes to capitalize on that relationship even further.

Approximately 10% of Boulder's residents have home-based businesses, reports City Council staff. The community ranks high in the concentration of software engineers, innovators, and scientists. Businesses with less than 100 employees comprise 97% of firms in Boulder. Local surveys indicate the business community is hungry for better services. From the Daily Camera article:

[Director of Information Technology Don] Ingle said the city has no concrete plans in place to pursue partners, but he believes there will be a lot of interest if Boulder can get the authority.

"The broadband capacity currently offered by the private sector is not large enough," he said. "Given all the business innovation going on with the tech center, that level of connectivity would be a huge asset."

In the past, City leaders hoped to catch Google's attention but the election successes in Longmont, Centennial, and Montrose have inspired Boulder to take action rather than wait indefinitely. Boulder policy advisor Carl Castillo, told the Daily Camera city leaders believe the 2005 law poisoned the city's chances of becoming a Google Fiber community.

"The way we look at it is that our taxpayers have paid for these assets, and we're not able to leverage these assets to offer higher-speed Internet at lower cost," Castillo said. "Right now, we can't really engage in these discussions. We're really going to be behind the ball if we don't have this authority."

Erwin, Tennessee Bringing Fiber to Businesses, Residents

Erwin, population 6,000, is planning a pilot project to bring fiber to downtown homes and businesses, reports local media. The project may be lit by November, serving approximately 1,200 premises.

According to the Johnson City Press, Erwin Utilities has already developed a plan to offer Internet and phone service:

The network would offer customers high-speed broadband Internet and telephone services. [Erwin Utilities General Manager Lee] Brown said the project would offer initial Internet of 100 Mbps with the future potential of providing up to 1 Gbps. Brown said a service such as the one Erwin Utilities intends to offer is typically only available in large metropolitan areas.

“Our beginning package is basically the equivalent of what the fastest speed available is currently,” he said.

Erwin Utilities will use the infrastructure for electric system demand response, meter reading, outage reporting, improved communications and operations of electric, wastewater and water equipment, and future load management. If customers are happy with the service in the pilot project area, Erwin Utilities hopes to deploy the technology throughout its entire service area.

Brown told the Press that the municipal utility began investigating the possibility of municipal broadband about 15 years ago, but until now the community could not afford the investment. Costs have gone down bringing the project to approximately $925,000.

The Erwin Utilities Board approved the plan but the Tennessee Comptroller needs to review it. Next the community will hold a public hearing then on to final approval by the Board of Mayor and Alderman.

Alabama City Exploring Fiber Options for Local Business

The people of Huntsville recently decided to delve into the possibility of deploying a fiber network. According to AL.com, the City Council approved funding for a feasibility study to look at ways to better use existing fiber assets.

Huntsville, with 180,000 people is located in Madison County in the extreme north central region of the state. The county seat, known for generations as a cotton producer, later became known as "The Rocket City." In the 1950s, the U.S. army developed missiles at its facilities there, setting the stage for our space program.

A recent unscientific poll by AL.com revealed that a countywide high-speed network is a high priority for locals. The online poll suggested potential projects for the community; 40% of respondents ranked a network at the top of the list.

Huntsville Utilities offers electric, water, and gas services to the community. The municipal utility owns a small amount of fiber for its own data purposes. At this point, local leaders want the study to focus on the possibility of expanding that network to serve the business community. 

Mayor Tommy Battle said it is crucial to take a serious look at citywide, high-speed, fiber-optic Internet service, whether it is provided by Huntsville Utilities or a private company. Dozens of U.S. cities are already wired for speed, including Chattanooga and Opelika.

Battle called high-speed fiber "the infrastructure of the future" and said it will eventually be as important as roads, water and sewer lines.

APPA Adopts Policy Resolution Supporting Municipal Broadband Services

As the FCC considers its next move in the question of local telecommunications authority, a growing number of organizations are expressing their official support. The American Public Power Association (APPA) recently passed a resolution supporting the doctrine that local communities should not be precluded by states from investing in telecommunications infrastructure.

The APPA official resolution, approved by members on June 17, urges Congress, the FCC, and the Obama Administration to officially support the ability for public power utilities to provide advanced communications services. The resolution states:

That Congress should state in clear and unequivocal language that it supports the ability of local governments, including public power utilities, to provide advanced communications services that meet essential community needs and promote economic development and regional and global competitiveness. 

You can read the entire resolution, calling for updates to the Telecomunications Act of 1996, at the APPA website.

Chanute City Commission Approves FTTH Plan

Chanute City Commission decided on June 9th to take the next step to bring ftth to the community; Commissioners voted unanimously to pursue and finalize funding to deploy a municipal network.

The City's current fiber network provides connectivity to schools, hospitals, electric utility and municipal facilities, the local college, and several businesses. Chanute has worked since 1984 to incrementally grow its network with no borrowing or bonding. Plans to expand the publicly owned infrastructure to every property on the electric grid began to take shape last year.

At a work session in May, Director of Utilities Larry Gates presented several possible scenarios, associated costs, and a variety of payback periods. The favored scenario includes Internet only from the City, with video and voice to be offered by a third party via the network. Residential symmetrical gigabit service will range from $40 - $50 depending on whether or not the subscriber lives in the city limits. Commercial service will be $75 per month. Advanced metering infrastructure will also be an integral part of the network.

The Commission authorized the pursuit of up to $14 million to get the project rolling.

Plan for FTTH in Chanute Looking Positive in Kansas

Chanute has been exploring available options for a citywide FTTH network. In addition to offering residential service, city leaders want to expand the business use of its municipal fiber network. A limited number of businesses currently join schools, government, and utilities on the fiber infrastructure.

The community incrementally built a fiber network to serve government, utilities, and schools with no borrowing or bonding. The broadband utility continues to expand and uses WiMAX for public safety and to connect several businesses. For the full story of this central Kansas community, download our case study Chanute’s Gig: One Rural Kansas Community’s Tradition of Innovation Led to a Gigabit and Ubiquitous Wireless Coverage

As we reported previously, the City Council began reviewing potential scenarios to bring fiber to each premise. The Wichita Eagle reported that Utilities Director Larry Gates recently presented price and speed estimates to a City Council study session:

When complete, the city system will offer service at a speed of one gigabit per second.

City residents will pay $40 a month; it will cost $50 outside the city limits and $75 for businesses.

To put that in perspective, Chanute will offer the same ultra-fast connection speed as the Google Fiber system being rolled out across the Kansas City metropolitan area, but 42 percent cheaper than Google’s $70-a-month charge.

Or, to use another comparison, Chanute’s fiber-to-home system will be 14 times faster and cost 60 percent less than the best Internet service the town’s residents can get today.

Wow! And recall that this would not be possible if the cable lobbyists had their way earlier this year in the Kansas legislature. Kansas briefly considered making it impossible for communities to build their own networks and will likely take up the matter again next year.

We contacted Gates, who elaborated on Chanute's plan. The City will provide Internet only; a third party provider would use the network to offer voice and video. The service area will include the Utilities' three mile territory outside of the city limits.

The community is especially interested in bringing access to unserved students in the community and to patients who need access to telehealth from home. Seventeen percent of area students cannot afford or do not have access to the Internet from home. USD 413 and Neosho Memorial Regional Medical Center are each working with Chanute Utilities to develop solutions using the muncipal network.

Businesses have expressed their frustration with service from the existing cable and DSL service on many occasions. The City's network serves a limited number of commercial clients and others have asked to be connected. City Commissioner Martha McCoy is also a local business owner; she owns and operates a downtown antique and home-decor business. She told the Eagle:

“What I have today (at home), I can hardly ever get on,” she said. “And then I watch the ads they have on TV: Oh, we have super streaming and everything. It just isn’t happening here.”

The service at her business is “better, but it’s still not good,” she said. “It still knocks me off, so I still get upset with that. I have a lot of work to do and I don’t have time to wait.”

The Eagle reports that community leaders supported the initiative at the study session. The City Council formerly votes on June 9th whether to move forward.

In Kansas, Chanute Explores FTTH Options

Last December, we reported on Chanute's decision to move forward with plans for a FTTH network. The community has a fiber and wireless network in place that serves utilities, public facilities such as libraries and schools, and several businesses. The network also provides free Wi-Fi across the community. As we discussed in our 2012 case study, Chanute developed its network incrementally over two decades with no borrowing or bonding.

In a City Commission work session on May 5, officials reviewed several options for an FTTH network. In a nutshell, the City is contemplating their involvement in the operation of the future network.

Utilities Director Larry Gates presented several options, reported the Chanute Tribune. Two choices stood out for the working group members:

Scenario C calls for the build out of city provided fiber optic-to-home broadband internet services. Service drops would only be provided to homes that want the internet services.

Under Scenario C, the initial investment would be about $10,926,842 to build the fiber core. The city would need $9,468,033 in funding to complete the project. The project would become cash-flow positive in two years, one month. It would take five years, nine months to pay back financing for the project. The 20-year net present value for the entire system would be an estimated $40,623,151.

Scenario D calls for a build out of the fiber optic-to-the-home system for private communications companies to pay a fee to the city to lease the network and provide services to residential customers. The city would seek private companies for voice, video and internet services.

Under Scenario D, the initial investment would be about $13,906,416 to complete the build out. The city would need $9,468,033 in funding to complete the project. The project would become cash-flow positive in one year, seven months. It would take eight years, 10 months to pay back financing for the project. The -20 year net present value for the entire system would be an estimated $25,667,301.

Under an altered Scenario D, the City would lease out the network for five years to a private company that would offer triple-play services to residents. At the end of the time period, the City would take over.

Several city officials expressed an aversion to city run video services.

“There is not much profit in video,” Gates said. “Provisioners are pretty much naming the price on that.”

“From a business standpoint, providing video is going to cost us more,” [Mayor Greg] Woodyard said. “We’re not going to be able to see a return on that investment.”

An April Tribune article reported on an outreach meeting held by City Commissioners. Brian Inbody, president of local Neosho Community College shared his experience with the network:

“It is as necessary to us as electricity, water and gas,” Inbody said. “We save about $30,000 year over what we were paying through AT&T to provide that service."

Local schools Superintendent James Hardy also spoke to the value of the publicly owned fiber infrastructure:

“If we didn’t have fiber, we couldn’t have school anymore,” Hardy said. “When we’re buying text books and we have text book rotation, half of what we pay for a text book is web-based material. When those teachers turn on their smart boards that are hooked to a computer, everything they are pulling down is off websites, because everything is web-based.”

At the public meeting in April, commissioners addressed concerns about a five percent franchise fee that commenced in December 2013. The network serves public telecommunications and utility operations and now needs relacement equipment. The franchise the fee will cover the costs.

“We were talking about being short money for equipment,” [Senior City Commissioner Tim] Egner said. “We were trying to figure out a way, without raising mill levies, how to come up with this money. With the franchise fee you’re going out over a larger area. You’re going outside the city. With the franchise fee, you can choose how much electricity you use. You can choose how much gas you use.”

The lack of upgrading maintenance has caught up with the city, Egner said.

“When we cut mill levies,” Egner said, “we had to adjust. We had to stop buying things. We stop putting money back for equipment. At some point that catches up with you. So, we had to figure out the best way to do it.”

The working group will meet again later in May to continue the discussion.

Michael Powell said What?? Why Everyone Should Ignore the Cable Lobby

Stop and think for a second. Would you regard the electricity grid and water system as an abysmal failure or success? If you are lobbying for cable companies in DC, you apparently think they are monumental failures.

Michael Powell, former Chairman of the FCC must be dizzy after his trip through the revolving door on his way to heading the national cable lobbying association. From his remarks at their cable show [pdf]:

It is the Internet’s essential nature that fuels a very heated policy debate that the network cannot be left in private hands and should instead be regulated as a public utility, following the example of the interstate highway system, the electric grid and drinking water. The intuitive appeal of this argument is understandable, but the potholes visible through your windshield, the shiver you feel in a cold house after a snowstorm knocks out the power, and the water main breaks along your commute should restrain one from embracing the illusory virtues of public utility regulation.

Pause for a second and think of the last time your water rate went up. Think of what you were paying 10 years ago for water and what you pay now. Compare that to anything you get from a cable company.

His point seems to be that because more regulated utilities like water and electricity are not PERFECT, regulation has failed and we should just let the private sector handle that. Well, some communities have privatized their water systems and the results have been disastrous - see a company called American Water in David Cay Johnston's book The Fine Print and also explored here.

Let's imagine if electricity was not tightly regulated and the market set the rates. How much would you pay for illumination at night? A refrigerator? Probably 10 times what you do now if that was your only option. Maybe 100 times after a few Minnesota winter nights. Market-based pricing for electricity would at least encourage conservation and efficiency, I'll give it that.

Public utility regulation is far from perfect but the alternative is far scarier. There is no "market" for these services over the long term. There is monopoly. And unregulated monopoly means Wall Street sucking the resources out of Main Street - and using some of them to employ former regulators as chief lobbyists who argue that regulation doesn't work.

I'm not convinced that Tom Wheeler is the disaster that some are now claiming he is, but it is long past time that top regulators are chosen from among major donors and fund raisers from the winning presidential candidate. Frankly, Wheeler is a helluva lot better than the last guy and we could have done a lot worse.

We need to change the system, but in the meantime, no one should be listening to any fool that claims our electrical or water systems would be better off with less regulation. After all, it isn't that long since we tried it. Enron, remember?

Communities that wisely don't want to put their trust either in DC regulators or a few massive corporations that care only to meet Wall Streeet's desires should choose to be locally self-reliant. Build your own network and take charge of your future.

Voters Approve Local Telecommunications Authority in Montrose, Colorado

By a 3,982 in favor and 1,397 opposed, the voters in Montrose decided on April 1st to take back local authority for telecommunications services. The state revoked the community's ability to establish a telecommunications utility in 2005. 

Jim Branscome covered the election results in the Daily Yonder. Branscome, a resident of Montrose, knows the local broadband situation:

Internet service here is currently a hodgepodge. Some of us depend on broadcast towers, some on DSL from CenturyLink and some on cable service from Charter. Service is generally at less than 10MB. It’s expensive, and customer service is erratic.

Community leaders state that they want to encourage fair competition and ensure every one has the opportunity to fast, reliable, affordable connectivity. 

In addition to ensuring that local businesses are in a position to compete with any large corporations that might attempt to establish a major share of the market, Turner said the city also wanted measures to enable lower income households to benefit from the advantages of gigabit speeds and capacity. “We don’t want to create two levels of society here, those who are connected and those who are not,” he said.

While Montrose is a long way from getting every person connected, the community is discussing the idea of financing a network with revenue bonds. 

This election result demonstrates Montrose's desire to be in control of their own connectivity. They understand the need to think of the future. From the Daily Yonder article:

It used to be that if a town wanted to prosper, it needed a river, then a railroad, then an Eisenhower Interstate highway, and then a cell phone tower. Today it needs to be a “gigabit city.”