The following stories have been tagged washington ← Back to All Tags

October Events in Washington State All About Community Broadband

Two events in October will bring Chris and other telecommunications policy leaders to the State of Washington. 

On October 8th, the Seattle Citizens' Telecommunications and Technology Advisory Board is hosting Lunch & Learn: Chris Mitchell on community-owned networks and municipal broadband in Seattle. The free event will be held in Seattle City Hall at noon; you can register online at the website.

There will also be an evening forum, also located in City Hall, that runs from 6:30 - 8:30 p.m. You can still register online for the free evening session, titled Exploring Municipal Broadband in Seattle with Chris Mitchell.

As our readers know, Seattle has pursued better connectivity for some time and the idea of publicly owned infrastructure is not a new idea in the Emerald City. Chris will be presenting his thoughts on the possibility of a municipal network.

The next day, Chris visits Mount Vernon for the Connect with the World event. The October 9th conference focuses on creating a tech friendly environment for economic development, better educational opportunities, and improved healthcare. The full agenda [PDF] is available online and registration is still open. The program runs from 10 a.m. - 3:30 p.m. at Skagit Valley College.

Mount Vernon's open access network provides an infrastructure for several ISPs. The network slashes the community's telecommunications costs and attracts employers in fields such as healthcare, aerospace, and engineering. The network also serves the communities of Burlington and the Port of Skagit.

Ellensburg Considers Muni Fiber Network Expansion

Last year, we covered this central Washington city’s first foray into publicly owned fiber optics. The local incumbent, Charter Communications, began charging the city $10,000 per month for services it had been providing for free for a decade as part of its franchise agreement. Ellensburg officials did some quick math and realized that they could save money building their own network.

They ultimately awarded a contract for $960,000 to build 13 miles of fiber connecting various public facilities throughout the city including the police department and Central Washington University. Thanks to Charter’s high rates, the direct cost savings alone could pay for the entire project in about eight years, leaving aside all the other direct and indirect benefits of public network ownership. 

Now, with the original construction project not even quite complete, Ellensburg is already considering expanding to serve residents and the local business community. According to the local Daily Recorder newspaper, the city council has unanimously voted to issue a request for qualifications from contractors for a long term strategic plan.

“Typically, for this type of an activity, (a strategic plan) would include a strengths, weaknesses, opportunities and threats analysis for the telecom utility,” city Energy Services Director Larry Dunbar said. “We would look at different business cases for different service opportunities like providing Internet access to perhaps commercial businesses, perhaps Internet access to the general public. A variety of other service opportunities are possible.”

The new strategic plan is expected to be finished before construction on the current institutional network ends. The construction plan for the institutional network was designed to be “future-ready,” with contingency funds set aside for possible later alterations or expansions. It seems those funds may be tapped sooner rather than later.

The Ellensburg Business Development Authority has been a major advocate of the city’s fiber network, pushing the city to expand it to new areas, offer service to businesses, and look into how it could compete with Charter Communications. As city councilmember Tony Aronica put it:

“It impacts Ellensburg at the business level but also at the consumer level, because there’s not really any other options,” he said. “I think it’s responsible of us to do this.”  

While nothing has been decided yet, Ellensburg’s discussion of expanding municipal network services is already turning envious heads in Spokane and other nearby cities. Ellensburg itself consulted with Tacoma, which has operated a city cable utility for years, in crafting its institutional network construction plan. It's always encouraging to see expertise and ideas spread from one local community to another, shortening the learning curve for small cities seeking to get out from under the local cable incumbent's thumb. 

Local Media Sees Need for Municipal Network in Olympia, Washington

Local news editors seem inspired by the current network neutrality debate at the FCC. Newsrooms considering the prospect of paid prioritization are reassessing the value of municipal networks.

Not long ago, the Olympian ran an editorial offering the basics of municipal networks. Editors mentioned NoaNet, the statewide fiber project that brings access to a series of community anchor insitutions and approximately 260,000 people. The piece also acknowledges that port authorities and some Public Utility Districts (PUDs) offer fiber connections in several regions of the state. We have reported on a number of them, including Benton, Okanogan, and Chelan.

The editorial points out that the cities of Lacey, Olympia, and Tumwater have fiber and conduit they use for government operations. The cities share the fiber and conduit with the state Department of Transportation. The Olympian also notes that if a city wants to provide telecommunications services, its location is critical:

Republican Sen. Trent Lott championed a 1996 bill that prohibited states from blocking any entity that provides telecommunications services. Despite that far-sighted bill, big provider lobbyists have persuaded 20 states to pass legislation making open access difficult. 

As suggested by other editors, The Olympian advocates for a municipal approach to curtail damage that will result if network neutrality disappears:

If approved, individual consumers in the South Sound and other U.S. communities can expect slower speeds for smaller services, nonprofits and independent content creators. Why pay for the “HOT” lane, unless traffic is backed up on the main line?

...

If the FCC votes to effectively end net neutrality, residents of the South Sound do have a potential alternative that is gaining traction elsewhere: turning to local Internet service providers who ride on municipally-owned fiber optic networks.

Paid prioritization and the proposed Comcast Time Warner Cable merger may result in further degredation of broadband in American. On the bright side, more people realize that municipal networks are a better option.

"Connect With the World" in Mount Vernon on October 9

Plan on spending Thursday, October 9 in Mount Vernon, Washington. Chris will speak with three other experts on creating a local environment attractive to the tech industry. 

The "Connect With The World" event will occur at Skagit Valley College's MacIntyre Hall from 10 a.m. - 3:30 p.m. PDT. Other speakers will be:

Mark Anderson: One of FORTUNE's “100 Smartest People We Know,” Mark is a frequently sought after speaker around the world. His long- running weekly newsletter, Strategic News Service (SNS), counts a stellar readership, including the likes of Michael Dell, Bill Gates and Steve Ballmer.

Susannah Malarkey: Executive Director of the Technology Alliance, a statewide organization of leaders from technology businesses and research institutions dedicated to Washington’s long-term economic success.

Craig Settles: Municipal broadband expert for journalists at CNN, the Wall Street Journal, New York Times, Time Magazine and a host of business, technology and local media outlets.

Mount Vernon's municipal open access fiber network serves public entities and businesses within the City, in nearby Burlington, and in the Port Skagit area. The community began the project in 1995 and developed the network incrementally. We spoke with Kim Kleppe, Information Systems Director, and Jana Hansen, Community & Economic Development Director, in episode 38 of the Community Broadband Bits podcast.

For more on the event, contact Jana at (360)336-6214 or email her at:  janah@mountvernonwa.gov.

Seattleites Want More Than Rhetoric in Quest for Better Broadband

In a recent SLOG post from the Stranger, Ansel Herz commented on Mayor Ed Murray's recent statement on broadband in Seattle. Murray's statement included:

Finding a job, getting a competitive education, participating in our democracy, or even going to work for some, requires high speed internet access. I have seen people say online, "I don’t need a road to get to work, I need high speed internet." Seattle would never leave the construction of roads up to a private monopoly, nor should we allow the City’s internet access to be constructed and managed by a private monopoly.

It is incredibly clear to me and residents throughout the City of Seattle, that the City’s current high speed internet options are not dependable enough, are cost prohibitive for many, and have few (if any) competitive options.

The Mayor also hinted that if the City needs a municipal broadband network, he would "help lead the way."

As a Seattleite, Herz knows firsthand about the lack of connectivity options in the area. Herz writes:

This is both encouraging and disappointingly tentative language from the mayor. It seems to cast municipal broadband as a last resort. Municipal broadband is a no-f*cking-brainer. [our *]

Herz turned to Chris for perspective:

"I have seen this from many Mayors who talk about how someone should do something but we don't always see concrete actions because of the difficulty and the immense opposition from some powerful companies like Comcast," Christopher Mitchell, the Director of the Telecommunications as Commons Initiative, who's worked with cities across the country on this question, tells me.

Seattle doesn't know what to expect from a Mayor that Comcast tried to buy (we suspect they did not succeed but have nonetheless sent a loud message). It is encouraging to see that the issue has not simply disappeared, but Herz and his neighbors want more:

What are you waiting for, Ed? Progressive rhetoric (and retweeting people who want to see municipal broadband happen) is great, but commitment and action are even better.

New York Times Covers Fiber and Economic Development

In a recent New York Times article, reporter Kate Murphy shined a light on fiber's increasing role in economic development. Murphy discussed several of the same networks we have followed: Wilson, NC; Chattanooga, TN; Lafayette, LA; and Mount Vernon, WA.

Murphy acknowledged that successful companies are moving from major metropolitan areas to less populated communities out of necessity:

These digital carpetbaggers aren’t just leaving behind jittery Netflix streams and aggravating waits for Twitter feeds to refresh. They are positioning themselves to be more globally competitive and connected.

Murphy notes that countries where governments have invested in critical infrastructure offer more choice, better services, and lower rates. She also points to successful local initiatives, often in less populated communities where large private interests have not invested:

Stepping into the void have been a smattering of municipalities that have public rather than private utility infrastructures. Muninetworks.org has a map that pinpoints many of these communities. They are primarily rural towns that were ignored when the nation’s electrical infrastructure was installed 100 years ago and had to build their own.

Murphy spoke with several business owners that moved from large metropolitan areas to smaller communities because they needed fiber. For a growing number of establishments, fiber networks are the only kind that offer the capacity needed for day-to-day operations. Information security firm, Blank Law and Technology, moved to Mount Vernon to take advantage of its open access fiber network. It helps when customer service representatives live in your neighborhood:

“We investigate computer malfeasance and have to sift through terabytes of data for a single case,” Mr. Blank said. “The fiber connection is the only reason we are in Mount Vernon and the customer service isn’t bad because all you have to do is walk down the street and knock on the door at City Hall.”

Seattle, Gigabit Squared, the Challenge of Private Sector Cable Competition

This the second in a series of posts exploring lessons learned from the Seattle Gigabit Squared project, which now appears unlikely to be built. The first post is available here and focuses on the benefits massive cable companies already have as well as the limits of conduit and fiber in spurring new competition.

This post focuses on business challenges an entity like Gigabit Squared would face in building the network it envisioned. I am not representing that this is what Gigabit Squared faced but these issues arise with any new provider in that circumstance. I aim to explain why the private sector has not and generally will not provide competition to companies Comcast and Time Warner Cable.

Gigabit Squared planned to deliver voice, television, and Internet access to subscribers. Voice can be a bit of hassle due to the many regulatory requirements and Internet access is comparatively simple. But television, that is a headache. I've been told by some munis that 90% of the problems and difficulties they experience is with television services.

Before you can deliver ESPN, the Family Channel, or Comedy Central, you have to come to agreement with big channel owners like Disney, Viacom, and others. Even massive companies like Comcast have to pay the channel owners more each year despite its over 10 million subscribers, so you can imagine how difficult it can be for a small firm to negotiate these contracts. Some channel owners may only negotiate with a provider after it has a few thousand subscribers - but getting a few thousand subscribers without good content is a challenge.

Many small firms (including most munis) join a buyer cooperative called the National Cable Television Cooperative (NCTC) that has many of the contracts available. But even with that substantial help, building a channel lineup is incredibly difficult and the new competitor will almost certainly be paying more for the same channels as a competitor like Comcast or Time Warner Cable. And some munis, like Lafayette, faced steep barriers in just joining the coop.

FCC Logo

(An aside: if we are going to pretend that competition can work in the telecommunications space, Congress and/or the FCC have to ensure that small providers can access content on reasonable terms or the ever-consolidating big providers will be all but unassailable by any but the likes of Google. Such regulations should include rigorous anti-monopoly enforcement on a variety of levels.)

Assuming a new provider can secure a reasonable channel lineup, it now needs to deliver that to the subscribers and this is more complicated than one might imagine. From satellite dishes to industrial strength encryption to set-top boxes, delivering Hollywood content is incredibly complicated.

When confronted with this challenge for its Kansas City network, Google evaluated all the options and decided the only option was to build its own technology for delivering television signals to subscribers. Google has the some of the best engineers on the planet and even they encountered significant challenges, suggesting that route is ill-advised for new companies. Even if Google were willing to share their approach, it was written for the Google eco-system and would need significant porting to work for other firms.

Several of the recent triple-play municipal FTTH networks used Mediaroom, a technology developed by Microsoft that was recently sold to Ericsson, which has strong connections with AT&T. All of which suggests that delivering television channels is not becoming easier for small, local networks.

From the tremendous challenges of securing television channels to the difficulty of delivering them to subscribers, investors are aware of the mountain a new entrant has to climb before even starting to compete with a massive firm like Comcast.

Longmont Power and Communications Logo

It remains to be seen whether a network delivering only Internet access (or with telephone as well) will succeed today, but most have believed that television is needed to effectively compete for subscribers (and generate enough revenue to pay for the network). Longmont is bucking that wisdom in deploying a gigabit and phone network throughout its footprint north of Denver and many are watching intently to see how it fares (our coverage here).

The main lesson from Part II of our Seattle Gigabit Squared analysis is the difficulty of a small firm competing against a massive cable company like Comcast and the subsequent reluctance of most investors to fund such firms.

This is not to say it is impossible for small entities to compete, especially entities that can handle a distant break-even point or justify its network by the many indirect benefits created by such an investment - including more jobs, lower prices for telecommunications services, and improved educational opportunities to name three (see our recent podcast on this subject). In most cases, the kinds of entities that are willing to include indirect benefits on their balance sheets in addition to cash revenues are nonprofit entities.

We strongly support the right of communities to decide for themselves how to ensure their residents and businesses have the connections they need to thrive in the 21st century. We also recognize that many cities, particularly the larger metro areas, would prefer not to directly compete with some of the most powerful firms on the planet, even if they are also tops among the most hated. Few local governments relish the opportunity to take on such a new challenge and understandably search for firms like Gigabit Squared that can assist them, reduce the risks of building a network, and shield them from charges of being godless communists by think tanks funded by the cable and telephone companies.

However, we are not optimistic that many communities will find success with this public-private-partnership approach. Indeed, with recent news suggesting that Gigabit Squared left at least $50,000 in unpaid bills behind, the risks of going with such a solution may indeed be greater than previously appreciated.

It is for the above reasons that we continue to believe most communities will be best served by building and operating their own networks, though some may choose to do so on an open access basis where multiple ISPs operate on the network.

That is where we will turn in the final segment of this series. Read that post here.

Big City Community Networks: Lessons from Seattle and Gigabit Squared

A few weeks ago, a Geekwire interview with outgoing Seattle Mayor Mike McGinn announced that the Gigabit Squared project there was in jeopardy. Gigabit Squared has had difficulty raising all the necessary capital for its project, building Fiber-to-the-Home to several neighborhoods in part by using City owned fiber to reduce the cost of building its trunk lines.

There are a number of important lessons, none of them new, that we should take away from this disappointing news. This is the first of a series of posts on the subject.

But first, some facts. Gigabit Squared is continuing to work on projects in Chicago and Gainsville, Florida. There has been a shake-up at the company among founders and it is not clear what it will do next. Gigabit Squared was not the only vendor responding to Seattle's RFP, just the highest profile one.

Gigabit Squared hoped to raise some $20 million for its Seattle project (for which the website is still live). The original announcement suggested twelve neighborhoods with at least 50,000 households and businesses would be connected. The project is not officially dead, but few have high hopes for it given the change in mayor and many challenges thus far.

The first lesson to draw from this is what we say repeatedly: the broadband market is seriously broken and there is no panacea to fix it. The big cable firms, while beating up on DSL, refuse to compete with each other. They are protected by a moat made up of advantages over potential competitors that includes vast economies of scale allowing them to pay less for advertising, content, and equipment; large existing networks already amortized; vast capacity for predatory pricing by cross-subsidizing from non-competitive areas; and much more.

So if you are an investor with $20 million in cash lying around, why would you ever want to bet against Comcast - especially by investing in an unknown entity that cannot withstand a multi-year price war? You wouldn't and they generally don't. The private sector invests for a return and overbuilding Comcast with fiber almost certainly requires many years before breaking even. In fact, Wall Street loves Comcast's position, as penned in an investor love letter on SeekingAlpha:

We're big fans of the firm's Video and High-Speed Internet businesses because both are either monopolies or duopolies in their respective markets.

Seattle Conduit

Seattle has done what we believe many communities should be doing - investing in conduit and fiber that it can use internally and lease out to other entities. This is a good idea, but should not be oversold - these kinds of conduit and fiber projects are typically deploying among major corridors, where the fiber trunk lines are needed. But networks require far more investment in the distribution part of the network, which runs down each street to connect subscribers. With this heavy investment comes the modern day reality that whoever owns the distribution network owns the subscriber - that owner decides who subscribers can take service from. (We have more conduit tips from previous Seattle coverage.)

Additionally, different conduit and fiber segments may be owned by various entities, including different departments within a city. This may introduce administrative delays in leasing it, suggesting that local governments should devise a way of dealing with it before a network is actually being deployed.

Even if a city wanted to lay conduit everywhere for the entire network (trunk and distribution), it would need to have a network design first. Different companies build different networks that require different layouts for fiber, huts, vaults, etc. Some networks may use far more fiber than other designs depending on the network architect preference. The result is a limit on just how much conduit can/should be deployed with the hope of enticing an independent ISP to build in the community.

In deciding the size of conduit and where to lay it, different types of fiber network approaches are either enabled or disabled (e.g. GPON vs Active Ethernet). In turn, that can limit who is willing to build a fiber network in the community. The same can be true of aerial fiber, attached to utility poles.

Investing in conduit and/or fiber along major corridors may go a long way to connect local businesses and some residents but almost certainly will not change the calculations for whether another company can suddenly compete against a massive firm like Comcast.

And paradoxically, beginning to connect some businesses with fiber and a private partner could make a citywide system less feasible. The firms that are prepared to meet the needs of local businesses may not have the capacity nor inclination to connect everyone. But without the high margin business customers among neighborhoods, a firm that wants to connect neighbors may struggle to build a successful business plan. Additionally, some firms may only be interested in serving high end neighborhoods rather than low income areas.

Community BB Logo

This is a major consideration in our continued advocacy for community owned networks. They have an interest in connecting businesses as the first step in connecting the entire community. An independent ISP may only find it profitable to focus on the businesses, though some ISPs share our values of ensuring everyone has access.

In the first Geekwire interview, Mayor McGinn returned to his original position when campaigning - that the City itself should be playing a larger role and investing its own resources rather than pinning its hopes on distant firms.

McGinn noted that “we haven’t given up on the private sector,” but said that if he were continuing as mayor, he’d start garnering political support to build a municipal fiber utility. That’s actually something the mayor considered back in 2010, after a consultant recommended that the City find a way to build an open-access fiber-to-the-premises communication infrastructure to meet Seattle's goals and objectives.

A feasibility study looking at one particular way of building an open access fiber network put the cost at $700-$800 million. However, there were other alternatives that they did not pursue, opting instead for a far less risky (and with far less payoff) public-private-partnership with Gigabit Squared.

Over the next few days, I will explore other lessons. A review of lessons from today:

  • Comcast and other cable companies have tremendous advantages that other would-be competitors in the private sector will generally fail to overcome
  • City owned conduit and fiber helps to encourage competition but is subject to significant limitations
  • Communities should invest in conduit in conjunction with other capital projects but should not inadvertantly weaken the business case for universal access

Update: The Gigabit Squared deal with Seattle is officially dead. Part II of this series is available here.

Ellensburg Pursues Its Fiber Project in Washington

Ellensburg is quickly moving forward as it make plans to build a publicly owned fiber optic network. The City Council approved a contract with Canon Construction  on December 16th, reports the Daily Record.

From the article:

Canon Construction of Milton won the contract to lay 13 miles of above- and underground fiber optic cables for the city with a $961,000 bid.

Multiple public organizations, including Central Washington University and Kittitas Valley Fire and Rescue, contract with the city for cable Internet services through the city.

We recently reported on the City Council decision to establish a telecommunications utility serving municipal needs. At the December 16th meeting, they also approved an ordinance needed to move ahead with the utility.

The community network will replace the Institutional Network supplied by Charter Communications. Charter and the City have been negotiating a new franchise agreement with little success. Charter wants to charge $10,000 per month to provide the service that it previously offered at no charge beyond the incredibly valuable access to the public's right-of-way. The City determined building a network was more economical and we suspect the City will also achieve greater reliability and have access to better technology than Charter would have installed.

Charter Prices Inspire Washington City to Consider its Own Network

Ellensburg, located in central Washington, is considering the pros and cons of a municipal fiber network. A big pro for the community of 18,000 is the ability to predict costs rather than depend on Charter Communications. Charter wants to begin charging $10,300 per month for municipal connectivity it previously supplied at no cost in return for access to the public rights-of-way.

The Ellensburg Daily Record recently reported that the City Council unanimously passed the first reading of an ordinance that will allow the city to establish a telecommunications utility. The city began using Charter's fiber optic network in 1997 as part of the city's franchise agreement. Educational institutions, public safety, and the county public utilities district also use the network. Ellensburg owns and operates its own electric and natural gas utilities. Energy Services Director Larry Dunbar was quoted:

“It’s clearly in the city’s best interest to just build it on its own and own it, compared to leasing it,” he said.

The community needs approximately 15 miles of fiber optic network to replace Charter's institutional network. The two parties are still negotiating and may still reach an agreement for a new contract although the article reports:

In June, Council directed the city to solicit vendor proposals for building a city network, and Dunbar said the city is close to granting the contract.

He declined to share a total cost because contract negotiations are ongoing, but said it makes more sense for the city to build the network now rather than pay in perpetuity, he said.

“A telecommunications network is like a 35-year endeavor,” he said. “If we would have done a lease, we could have bought two or three networks over 35 years.”

Local median KIMA TV recently covered the story:

We would go further and note the many more advantages of owning rather than leasing. When the city owns the fiber network, it can expand it to connect local businesses and/or residents who feel that Charter is not meeting their needs. The network can be expanded at low cost over time in conjunction with other projects, for instance as part of an effort to create a new commercial or industrial park. Owning provides much more flexibility than leasing, particularly with a massive and inflexible corporation like Charter.