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

Catching Up with the RS Fiber Coop in Minnesota - Community Broadband Bits Podcast #99

In the nearly two years since we launched this podcast with an interview from Minnesota's rural Sibley County, the project has evolved significantly but the need for better Internet access remains a constant.

Today, we interview Coop Vice-Chair Cindy Gerholz and Winthrop Town Manager Mark Erickson to get an update on the fiber-to-the-farm project. The Renville-Sibley Fiber project has transitioned from a municipal project to a cooperative. Local towns and a sizeable majority of townships will together issue an economic development bond to provide seed capital to the coop.

We discuss the project, financing arrangements, and the need to make sure that no one is left behind. Stay up to date with the project on their website and Facebook.

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 20 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 Valley Lodge for the music, licensed using Creative Commons. The song is "Sweet Elizabeth."

Sun Prairie Ponders Fiber Network Investment in Wisconsin

The Sun Prairie City Council met on January 14th to discuss a possible investment in a municipal fiber network. Thank you to local resident Jonathan Kleinow for alerting us to developments in the south central Wisconsin town.

The Star published an article about the meeting in which The Motive Group presented information to the Committee of the Whole. According to the story, the consulting firm has been working with Sun Prairie Utilities for a year to find ways to improve local connectivity and spur economic development with fiber. The community is considering the possibilities of a triple-play FTTH network for the areas 30,000 residents.

Sun Prairie Utilities solicited responses to a community survey. They received 700 responses with 88% in favor of a fiber investment. 

From the article:

The recommended plan put for[th] by The Motive Group has a total cost of near $27 million, with $21 million of that as year-one capital expenditures to serve roughly 13,550 homes and businesses in the city.

Budgeted in the initial year's expense total is $11 million for aerial and underground construction and equipment.

Once the fiber system is operational and available for customers, [The Motive Group's Beth] Ringley said projections show $9.97 million in annual operating revenue by year 20 of the system to go along with expenses of $1.26 million.

By year 20, total assets are projected to be at $27.16 million, with total cash at $12.56 million.

Councilman Jon Freund commented that he was opposed to the idea at first but that he now believes Sun Prairie Utilities and the City could partner to distinguish the community. From the article:

“Technology has become a greater and greater need for both businesses and residents,” Freund continued. “This is an opportunity for us to basically differentiate Sun Prairie from all the other communities in Dane County.”

...

He added that fiber installation would “put Sun Prairie on the leading edge” for economic development and local and long-distance education opportunities.

Sun Prairie Wisconsin Logo

The Star also reported on Jaunary 25th that city officials want to provide ample opportunity to incumbents:

“The worst they can say is ‘No’ and we say ‘Thank you for your time‘ and we come back to this body and say we've ruled that out,” [Mayor John] Murray remarked.

Freund said he and others spoke Tuesday with Frontier representatives and the provider expressed little interest.

“It was a good conversation and certainly as we looked at partners they would be the most likely partner in the community, but it was pretty clear that they weren't interested in taking this project on themselves and providing us this service at no cost to the city,” Freund said.

City Council members plan to reach out to the people of Sun Prairie through informational meetings. The first is scheduled for March 4th.

“My hope is that we continue to put additional information out over the next month to continue to educate the public,” Freund said.

Sun Prairie is located about an hour southeast of Reedsburg, where the community has benefitted from a community network since 1998. Reedsburg recently began offering gigabit service for less than $300 per month.

A local news story notes that an existing beer distributor is already using the utility's fiber and it has been important to its business:

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.

Frontier Logo

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.

In Minnesota, Rural Fiber to the Farm Project Expands

A rural Fiber-to-the-Farm project that started in Sibley County has added three new towns to its potential territory due to the extremely high interest in fast, affordable, and reliable connections to the Internet. The current providers aren't getting the job done and few expect that to change given the cost of improving services.

An article last year reported on present difficulties for many in Sibley:

Soeffker, who farms with her husband in rural Sibley County, said the dish receiver they must use works fine in good weather but balks during heavy rain and snowstorms.

Meantime, her husband struggles with a lagging Internet speed of .6 megabits a second that falls short of meeting his business needs when he’s selling commodities.

The committee organizing the network set a goal for demonstrating the interest of something like 50% of the population in the target area. There has been some confusion as to exactly how many they should have before committing to the project but with just two mass mailings, they have received nearly 3,000 positive responses (of the over 8000 households that could be served). This is a very strong response.

To keep the public informed, they have had numerous public meetings in each of the communities that will be involved. To be as open as possible, they would often have three meetings in a town per day -- a morning, afternoon, and evening meeting to accomodate everyone's schedule. As this project moves forward, no one can claim the group has been anything but open with the plan.

On January 19, they had a major meeting with over 100 people attending, including many elected officials from the towns. For over two and a half hours, they had five presentations and numerous questions. MPR's Jennifer Vogel was there and wrote about the project shortly afterward.

Participating communities--which include Renville County, Sibley County, Fairfax, Gibbon, Winthrop, Gaylord, Arlington, New Auburn, Green Isle, Buffalo Lake, Steward, Brownton and Lafayette--have been asked to decide by early March whether to continue with the project and release additional funds for marketing and administration.

Previously, the project included 7 potential towns. But some nearby towns in Nicollet County have expressed interest in joining and their density would make the project more viable. Most in Sibley have been dedicated to serving every household - town and farm alike. While the principle of equity is noble, it ultimately makes the project harder to finance due to the higher fixed costs required to serve the least dense areas. Bringing in a few more towns benefits everyone.

Unfortunately, the people around the those towns are frustrated that they are not slated for connections in the current plan -- see some of the discussions on their vibrant facebook page. They will have to draw the line somewhere but will undoubtedly be interested in expanding the network once they have built out in initial territory.

Minnesota law has a barrier to municipal networks and as a matter of law, it is not clear that it applies to a county-owned project. Under law, if a municipality wishes to own or operate a telephone exchance, it must have a successful 65% referendum -- an incredibly high bar given the imbalance of spending power in such contests. Incumbent providers can spend a lot to oppose a referendum whereas local governments cannot take a position and grassroots groups are limited in their financial resources.

Renville Sibley Fiber Network

However, as this network plans to neither own nor operate a telephone exchange, it should not have to pass a referendum. It seems as though the project is leaning toward a partnership with Hiawatha Broadband Communications, a well liked private firm from southeastern Minnesota. HBC already operates the muni-owned Monticello FTTH network.

While no financial plans are yet finalized, the most likely option appears to be non-recourse revenue bonds for nearly $70 million. These are bonds that are issued to private investors and will be repaid with revenues from the subscribers. If the network were to fail to produce enough revenue to make the debt payments, the towns and county would have the option of making up the difference from tax revenues but would be under no obligation to do so.

From Jennifer Vogel:

There would be some public obligation to the project, in the form of what McGinley called a "debt service reserve fund." In order to make the project appealing to investors, he said, the participating communities would be required to establish and replenish if necessary a $4.5 million rainy day fund that would cover any shortfalls. They also would have to cover the contributions of any communities that ducked out of the project down the road or couldn't pay into the fund.

If one town, Winthrop for example, decided not to ante up for the debt service reserve fund, other communities could cover the difference. As the network generates net income (perhaps 5-6 years down the road), the money comes back proportionally to those towns that created the reserve fund.

It bears noting that these people are not asking for any handouts. Whereas Frontier and other providers in the towns are incredibly unlikely to expand their networks absent taxpayer subsidies, the Sibley County Fiber Project will be locally self-reliant.

Legislation Alert: Washington Considers Community Broadband Bill

Last year we noted that a bill to expand local authority to invest in publicly owned broadband networks would return in 2012. HB 1711 is in Committee and causing a bit of a stir. "A bit of a stir" is good -- such a reaction means it has a chance at passing and giving Washington's residents a greater opportunity to have fast, affordable, and reliable access to the Internet.

Washington's law presently allows Public Utility Districts to build fiber-optic networks but they cannot offer retail services. They are limited to providing wholesale services only -- working with independent service providers to bring telecom services to the public.

Unfortunately, this approach can be financially debilitating, particularly in rural areas. Building next generation networks in very low density areas is hard enough without being forced to split the revenues with third parties.

Last year, House Bill 2601 created a study to examine telecommunications reform, including the possibilty of municipality and public utility district provisioning. The University of Washington School of Law examined the issues and released a report [pdf] that recognizes the important role public sector investments can play:

U Washington Law School

Broadband infrastructure is this century’s interstate highway system: a public investment in an infrastructure that will rapidly connect Washington’s citizens statewide, nationally, and internationally; fuelling growth, competition, and innovation. Like highway access, the path to universal broadband access varies with the needs of the local community.

Our primary goal is to expand broadband access. We believe allowing municipalities and PUDs to provide broadband services addresses the most significant hurdles to broadband expansion: the high cost of infrastructure. In conjunction with a state USF, PUDs and municipalities are well placed to address the needs of their consumers.

A secondary goal is to promote a competitive marketplace. We believe that empowering PUDs and municipalities will spur competition which will drive innovation and improved service.

The analysis recognized the weakness of those arguing that only the private sector should be allowed to build this essential infrastructure:

To be successful private providers need to be able to generate profit for their shareholders. However, when an effective competitive marketplace does not exist, private providers only have a weak incentive to expand access to broadband services. In fact, the scarcity of service justifies the collection of high rates from users. In Washington’s urban areas, the barriers to entry are so high that incumbent providers have little trouble keeping new providers from entering the marketplace. Qwest (soon to be CenturyLink) and Comcast, merely vie for existing users, rather than expanding the overall number of ratepayers. In contrast Washington’s rural areas are characterized by low population density and large geographical distances between communities. The lack of concentrated business consumers in a given area translates into weak or non-existent business case for providers to build broadband infrastructure in rural areas. Arguably, rural areas are poised to reap the biggest rewards from broadband expansion, quickly integrating communities into existing networks of private and public service.

Chelan PUD

Not all public utility districts are pushing for this law to be changed. I asked the Chelan Public Utility District (one of the oldest and largest public services providers in the state, which we have previously covered here) about their position on the legislation. Chelan is not interested in offering retail services but does not oppose changes that would allow other PUDs to do so. They rightly oppose any law that would require PUDs to offer retail services -- something with which we strongly agree. State legislatures should not be telling communities what business model they have to use.

Getting back to HB 1711, it is presently in the Technology, Energy, and Communications Committee. The bill's author, Representative John McCoy has taken the arguments of opponents into account by limiting the impacted public utility districts to those in a county with 300,000 people or fewer. To build a network and offer retail services, a public utility district (or rural port district) would have to gain the approval of its governing board after a public meeting and be subject to state regulation for the services it offers.

The original bill also granted the authority to municipalities to build retail networks -- a right that munis appear to have presently but it is not clear (inviting expensive litigation from big anti-competitive providers). That provision has been removed from the present bill.

Opposition

The bill's opponents may be separated into two groups. The first is the usual gang of big, absentee corporations like CenturyLink, Frontier, and Comcast that typically oppose any legislation that could create competition to their services. They have a ton of lobbying power and very little desire or capacity to solve the rural broadband problem in Washington state.

The second group is more interesting. It is a collection of local businesses that are actually rooted in the community. Many are ISPs that operate on existing wholesale-only networks owned by public utility districts. They are afraid of either being kicked off the network or having to compete against the PUD itself in provisioning services. These are certainly legitimate fears.

Unfortunately, the small providers are also limited in the capacity to build the necessary networks needed to bring modern connections to everyone in the state. Offering service on an existing PUD network requires far less capital than building their own network. If the state wants to move toward a Washington where all residents and businesses have fast, affordable, and reliable access to the Internet, it has to risk upsetting the small ISPs. They do not have the capacity to connect rural Washington; the public utility districts and local governments have not just the capacity, but also the responsibility. It is time for the state to stop making it all but impossible for them to do so.

Get Involved

Local communities must have the freedom to build the networks they need without interference from federal or state capitals. Quoting from the Federal Communication Commissions' National Broadband Plan: "Congress should make it clear that Tribal, state, regional, and local governments can build broadband networks."

This bill will not succeed without a grassroots effort. People in Washington should contact their representatives (you can find them here), particularly those on the Committee:

make-the-call.jpg

Representative Room Phone
McCoy, John (D) Chair LEG 132A (360) 786-7864
Eddy, Deb (D) Vice Chair LEG 132D (360) 786-7848
Crouse, Larry (R) * LEG 425A (360) 786-7820
Short, Shelly (R) ** JLOB 436 (360) 786-7908
Anderson, Glenn (R) LEG 122A (360) 786-7876
Billig, Andy (D) LEG 122H (360) 786-7888
Carlyle, Reuven (D) JLOB 325 (360) 786-7814
Dahlquist, Cathy (R) JLOB 426 (360) 786-7846
Haler, Larry (R) LEG 122D (360) 786-7986
Harris, Paul (R) JLOB 427 (360) 786-7976
Hasegawa, Bob (D) JLOB 322 (360) 786-7862
Hudgins, Zack (D) LEG 438A (360) 786-7956
Kelley, Troy (D) JLOB 334 (360) 786-7890
Kristiansen, Dan (R) LEG 427A (360) 786-7967
Liias, Marko (D) JLOB 414 (360) 786-7972
McCune, Jim (R) JLOB 405 (360) 786-7824
Morris, Jeff (D) LEG 436A (360) 786-7970
Nealey, Terry (R) JLOB 404 (360) 786-7828
Wylie, Sharon (D) JLOB 417 (360) 786-7924

Former FCC Commissioner Copps recently said, "So it is regrettable that some states are considering, and even passing, legislation that could hinder local solutions to bring the benefits of broadband to their communities. It's exactly the wrong way to go."

Washington is smart to expand local authority in this matter. Local citizens are the best judge of whether a network is necessary and desirable as well as the most responsible business model.

New Year, Same Lame Cable and DSL Monopolies

It's a new year, but most of us are still stuck with the same old DSL and cable monopolies. Though many communities have built their own networks to create competition and numerous other benefits, nearly half of the 50 states have enacted legislation to make it harder for communities to build their own networks.

Fortunately, this practice has increasingly come under scrutiny. Unfortunately, we expect to see massive cable and telephone corporations use their unrivaled lobbying power to pass more laws in 2012 like the North Carolina law pushed by Time Warner Cable to essentially stop new community broadband networks.

The FCC's National Broadband Plan calls for all local governments to be free of state barriers (created by big cable and phone companies trying to limit competition). Recommendation 8.19: Congress should make clear that Tribal, state, regional and local governments can build broadband networks.

But modern day railroad barons like Time Warner Cable, AT&T, etc., have a stranglehold on a Congress that depends on their campaign contributions and a national capital built on the lobbying largesse of dominant industries that want to throttle any threats to their businesses. (Hat tip to the Rootstrikers that are trying to fix that mess.)

We occasionally put together a list of notable achievements of these few companies that dominate access to the Internet across the United States. The last one is available here.

FCC Logo

As you read this, remember that the FCC's National Broadband Plan largely places the future of Internet access in the hands of these corporations. On the few occasions the FCC tries to defend the public from their schemes to rip-off broadband subscribers, Republicans (joined by a number of Democrats) threaten to overrule what is supposed to be an independent agency to defend the corporations that just happen to be donors to their campaigns.

Back when most assumed AT&T would be able to push its horribly anti-competitive takeover with T-Mobile through an impotent federal government, a few stories exposed the tip of the iceberg of AT&T's astroturf efforts, as with this report from the Center for Public Integrity:

“It is important that we, as Christians, never stop working on behalf of the underserved and forgotten,” the Rev. R. Henry Martin, director of the clinic, wrote to FCC Chairman Julius Genachowski in June. “It might seem like an out-of-place endorsement, but I am writing today in order to convey our support for the AT&T/T-Mobile merger.”

...

Not included in Martin’s letter to the FCC was the fact that his organization had received a $50,000 donation from AT&T just five months earlier. Indeed the Shreveport-Bossier Mission is one of at least two-dozen charities that were recipients of AT&T’s largesse and have written in support of the T-Mobile buyout, which will cut the number of national wireless companies from four to three.

When AT&T's wasn't able to buy enough influence with legitimate groups willing to sell out the interests of their members (who would pay more for their communications in a less competitive environment), it would simply create its own groups to push its interests:

AT&T Logo

Tallahassee Mayor John Marks brought an Atlanta nonprofit to the city as a partner in a $1.6-million federal-grant project, saying it would put high-speed Internet into the hands of poor people.

What he didn't say, and now says he didn't know, was that the Alliance for Digital Equality (ADE), in its first three years of existence, was nearly 100-percent funded by AT&T and spent most of its money — four of every five dollars — to pay board members, consultants, lawyers and media companies to push the global communication giant's positions on Internet and wireless regulation. Nor did Marks disclose, initially, that ADE had paid him $86,000 over several years as a member of its board of advisers.

We continue to see these massive companies abuse their market power to increase their prices, knowing that their lobbying arms will continue pushing legislation to stop communities from building their own networks.
Time Warner Cable hiked its rates in North Carolina immediately after passing its legislation to stop communities from building networks. Mediacom raised its prices while it attempts to sabotage efforts in rural Minnesota to build networks in unserved areas. And invented new fees to rip off its subscribers while trying to disrupt a rural fiber-to-the-farm initiative that slightly overlapped some territory in which they have long refused to invest.

Even as profits on cable broadband services approach Exxon proportions, Time Warner Cable has pushed for usage-based pricing to further overcharge subscribers, but mostly to strangle enormously popular competitors like Netflix. CenturyLink is not far behind, with usage caps prioritizing its own video content over competitors.

Verizon Wireless tried to sneak a new fee past subscribers by announcing it just before Christmas but backed down after outraged consumers reacted. One has to wonder whether it would have backed down in a world where AT&T took over T-Mobile, resulting in 3 out of 4 wireless customers being with Verizon Wireless and AT&T. Four competitors isn't the robust competition envisioned by Adam Smith, but it still beats the duopoly dynamic that results from even less competition.

Verizon Logo

Speaking of less competition, the recent deal between Verizon and cable companies is troubling. We already knew that FiOS was all but dead, but this deal truly puts a fork in it:

I'll assume that neither cable operators or Verizon are going to let us see the deal fine print to confirm the Times guess, but the logic fits Verizon's strategy. Verizon already cherry picked the most valuable FTTH upgrade markets, and has shown total disinterest in further upgrades. This deal allows them to save money on FTTH upgrade costs, instead soaking up remaining customers with LTE -- which we noted was the plan some time ago. This deal is very bad news to the rural telcos without the cash for large-scale upgrades (CenturyLink, Frontier, Fairpoint, two of which Verizon sold aging DSL networks to), and for satellite broadband providers.

The future of next-generation networks is now only community networks, cooperatives, and some small private networks.

We've long argued that phone and cable companies have systematically overstated their coverage in mapping efforts as part of their effort to blunt any sensible public policy that would result in all Americans having a choice between fast, affordable, and reliable connections to the Internet. The New England disaster called FairPoint is back in the news for overstating the number of subscribers that have access to DSL. The company has not met the requirements it agreed to when purchasing Verizon's lines a few years ago.

Comcast Logo

And in the continuing saga of Comcast's growing domination over the information people can access, Bloomberg TV is fighting Comcast's practice of discriminating against channels in which it has no ownership stake. Comcast has long strongly encouraged those who want to put television channels on its lineup to give Comcast a piece of the action, not unlike a mobster encouraging a small business to pay protection money. It wants to continue expanding its role as a gatekeeper to the Internet, particularly in the many areas where people have no real choice from other high speed providers.

And perhaps the best example of why we should not trust these massive corporations to run essential infrastructure is the revelation that AT&T defunded 9-11 call centers in Tennessee to gain a market advantage over competitors, a practice they were previously caught doing, leading to settlements out of court.

These corporations are not evil, they are following a sensible mandate to maximize their shareholder value. It is our government that is not sensible -- entrusting them with the future of Internet access without even bothering to enact the most basic regulations. Communities must continue to wise up and ensure they have the access they need to modern communications -- access that reponds to their needs, not those of distant shareholders.

A Survey of National Private Sector Broadband Providers

When it comes to expanding access to the Internet across the US, the federal government has long looked first to the private sector, ignoring hundreds of years of experience showing that unaccountable private companies cannot be trusted to sufficiently invest in or govern essential infrastructure.

Inevitably, they price access to high and invest too little as they maxmize their profits -- thereby minimizing the profits of all other parts of the economy.

So let's take a little survey of the progress we see from these companies.

We have long railed against the Verizon -> FairPoint fiasco in New England that left Verizon much richer at the expense of residents and businesses in rural Vermont, New Hampshire, and Maine particularly. Well, FairPoint creditors have realized the depth of Verizon's scam and are suing Verizon for $2 billion. Read the complaint [pdf].

According to the complaint (pdf), Verizon not only made out like a financial bandit up front, but took advantage of regulatory delays to strip mine the assets of anything of value, including core IP network components, business services, and localized billing and support assets required to support the three states. Verizon then billed out their support assistance for millions per month during the very rocky transition, during which time 911 and other services saw repeated outages, resulting in millions more in refund penalties.

Karl Bode is right to criticize the state authorities that allowed this fiasco to occur. Their inability to regulate in the public interest has hurt everyone stuck in the mess. While we can expect powerful companies like Verizon to try to game the system at every opportunity, there is no excuse for making it so easy for them.

Frontier Logo

As long as we are talking about Verizon shedding its rural investments, let's take a look at how Frontier is doing since it inherited thousands upon thousands of FiOS customers as part of its recent deal with Verizon. Frontier has decided the best approach is to transition those customers from the next-generation FTTH network to an older, slower, less reliable, DSL alternative. Find me another country where a major company is moving customers away from fiber-optic connections. This is a national embarrassment.

Rather than investing in better technology, Frontier has literally doubled down on DSL by marketing a second DSL line to customers. Connect one computer to one line and the TV/video game unit to another one. Of course, it turns out they are lying (or incompetent) when it comes to how much they are charging for it...

In other words, that $13.50 1.5 Mbps (if you're lucky) DSL line is actually closer to a $50 1.5 Mbps DSL line once Frontier gets done slamming you with additional fees. These kinds of below-the-line fees have been a mainstay at phone companies for decades, essentially allowing them to engage in false advertising and covertly jack up the advertised price post sale. It's a practice that has yet to see any real attention of regulators, even those ceaselessly professing dedication to "transparency." It helps that Frontier serves a lot of uncompetitive markets where users have no other options, resulting in "deals" like this one.

Let's move on to the nation's largest cable company, Comcast. We recently noted Comcast's dubious distinction as the least trusted company in America. It was simultaneously the second least trusted. I'm guessing we won't see that award plastered on the side of the vehicles their poorly compensated contractors drive around.

Comcast Logo

Occupy Philly, the City of Brotherly Love offshoot of Occupy Wall Street, recently demonstrated at the Comcast Center to bring attention to Comcast's corporate tax dodging. Hey -- I thought Comcast routinely said it wasn't fair that non-profit entities don't pay taxes!

Finally, the big cable companies in general have been singled out in a study showing that Americans lost $38 billion in wages last year while waiting for technicians and delivery people. Cable companies were the worst at making people wait - prompting one person to say "SCAMCAST should be their name."

There is plenty more of examples like the above, but I'm done writing about them today. Just recall that the federal government prefers that this group of unaccountable corporations build, own, and operate the most important utility of the 21st century. We prefer local ownership that is accountable to communities. Time Warner Cable has actually been sued for its terrible customer service!

AT&T CEO Admits DSL is Obsolete

In a Q&A following a speech at the National Association of Regulatory Utility Commissioners, AT&T CEO Randal Stephenson candidly called DSL obsolete. This echoes not only our view, but that of hundreds of communities who have built their own networks upon realizing they cannot be competitive in the modern world with DSL.

Interestingly, AT&T still has millions of customers that use its DSL product. And it has announced its super-DSL offering called U-Verse is finished -- no doubt surprising many state-house policymakers that AT&T had convinced they would invest in communities.

The context of his comment was that DSL is no longer competitive with cable in broadband capacity (and often reliability) -- something we documented in our video comparing different types of networks. We would argue that U-Verse itself is not competitive with cable due to its greatly constrained upstream speeds -- even worse than cable networks typically experience.

So, to recap -- we have yet another admission from the private sector that it is delivering obsolete broadband services to our communities. How can there be any surprise that so many more communities are considering building their own networks to create economic develop, increase quality of life, and generally be competitive in the digital economy.

If AT&T can barely keep up with the investment necessary for our communities, how can far less profitable companies like CenturyLink and Frontier? They can't. But that doesn't stop them from advertising the hell out of their obsolete networks. Smart communities will choose self-determination rather than betting on last-generation networks run by distant, unaccountable corporations.

Minnesota's Northeast Service Cooperative Middle Mile Network Breaks Ground

Thanks to Minnesota Public Radio for an update on stimulus broadband projects in NE MN. A massive non-profit middle-mile project called the NorthEast Service Cooperative will finally provide redundancy and modern connections to an area long neglected by Qwest.

Hundreds of miles of fiber optic cables will bring faster Internet access to the Arrowhead region of Minnesota by the end of this summer. Ground for a broadband network stretching 915 miles was broken yesterday. Sen. Al Franken (D-MN) and other politicians were on hand to tout the long-term economic significance of this federally funded project.

Soon, entire counties will not have to fear disastrous meltdowns from Qwest's inability to offer reliable services, as when they went 12 hours without any telecommunications, meaning police could not run background checks or run plates, credit cards and ATMs went offline, and border security had to use Canadian comms.

Northland News offered greater coverage as well as a video that would not embed here for reasons unknown.

The 915 miles of fiber optic network will stretch across eight counties in the Arrowhead Region and bring world class web speeds to the area.

State lawmakers were also on hand at the ceremony and say this type of technology is pivotal to economic development.

"I want this to be the next step in people realizing that economic diversification on the Iron Range can be done because we are wired, we're ready to go, and we have a work force that is second to none," said state Sen. David Tomassoni.

We have to wonder how many of these legislators will support removing barriers in Minnesota law to communities building their own networks.

Note that the the NE Service Coop is a middle-mile network and that Frontier will be using it to improve their services.

Video: 
See video

WindomNet Saves Jobs, Provides Stellar Customer Service

Minnesota Public Radio, as part of its Ground Level Broadband Coverage has profiled WindomNet with a piece called "Who should build the next generation of high-speed networks?"

Dan Olsen, who runs the municipal broadband service in Windom, was just about to leave work for the night when he got a call. The muckety-mucks at Fortune Transportation, a trucking company on the outskirts of town, were considering shuttering their office and leaving the area.

"They said, Dan, you need to get your butt out here now," Olsen recalls. "I got there and they said, 'You need to build fiber out here. What would it take for you to do it?'"

Fortune, which employs 47 people in the town of 4,600, two and a half hours southwest of the Twin Cities, relies on plenty of high-tech gadgetry. Broadband Internet access figures into how the company bids for jobs, communicates with road-bound truckers, controls the temperatures in its refrigerated trucks and remotely views its office in Roswell, New Mexico. Fortune even uses the Internet to monitor where and to what extent drivers fill their gas tanks in order to save money.

Yet, when it was time to upgrade company systems three years ago, Fortune's private provider couldn't offer sufficient speeds.

That's where Windomnet came in. Though Fortune was a mile outside the municipal provider's service area, "We jumped through the hoops and made it happen," recalls Olsen. "The council said, "Do it and we'll figure out how to pay for it.' We got a plow and a local crew. We had it built in 30 days."

I have thought about this story frequently when I hear claims that publicly owned networks are failures. For years, lobbyists for cable and phone companies have told everyone in the state what a failure WindomNet has been - they crow about debt service exceeding revenue while ignoring the fact that all networks -- public and private -- take many years of losses before they break even because nearly all the costs of the network are paid upfront.

Toward the end of the article (which should be read in its entirely rather than in the snippets I repost here), Dan puts the matter in context:

Dan Olsen retorts that Windomnet was never designed to make money; one of the benefits of a municipal system is that nobody takes profits out of it. He says the plan was to break even by year five, which arrived in 2010, and it looks like they'll come within $50,000 of doing so.

"We don't charge enough to make money," says Olsen, noting that Windomnet serves the vast majority of the town's 2,000 homes with internet, phone, cable or all three. They also provide free service to city buildings and the library. "The point is not to make money, but to break even," Olsen says. "The number one goal of the system is to provide broadband to the residents of Windom."

And the vast majority of residents take service from WindomNet. With a population of 4600, meaning probably 2000 households, the network has 1846 fiber drops that are active with at least one service. They have people working for companies in South Dakota but able to work from home regularly due to the Internet connection. Compare that to Sibley County, where Qwest has not even bothered to offer DSL in the county seat of Gaylord!

And the customer service comes highly recommended. Again, from the MPR article:

For his part, Dale Rothstein, who runs the IT systems at Fortune in Windom, says, "I get three calls per month from people trying to get me to convert. I say 'no.' Dan and Windomnet took care of us. I'm not going anywhere. It's a great relationship. When there is a problem, I call and it's taken care of. It's great to have a local company to deal with."

Major providers, like Frontier (famous for some of the worst DSL in the nation) pretend to be reasonable on the issue by claiming that publicly owned networks will make it harder to reach the highest cost households. This must be why Frontier is trying to derail the Sibley County project from building fiber-to-the-farm when Frontier can't even provide reliable slow DSL across all of its phone lines in the area. Not only does Frontier have no plan to connect these farmers, they have no reason to as such an investment would not generate sufficient return for them to be interested.

FiberNet Monticello

TDS has been the king of BS in this arena, putting out patently absurd press statements that reporters feel compelled to repeat no matter how implausible. Regarding Monticello, MN, which built a FTTH network compelling TDS to upgrade their poor DSL service (while also delaying the Monticello network with a year-long frivolous lawsuit that was eventually tossed out of court):

Fast forward to today, a city with two fiber networks. Andrew Petersen, director of external affairs for TDS, acknowledges "the importance of broadband to stimulate economic development in urban and rural communities" and says his company would have built a fiber network eventually, without prodding from the city. He believes the network may be somewhat ahead of its time, though.

Ha! Monticello begged TDS to invest in a modern network and TDS refused, saying that their DSL was perfectly suitable for what Monticello needed. They suddenly changed their mind when the City decided to build their own network to ensure not only faster, more reliable connections, but a LOCAL option.

Keep an eye on this MPR coverage of broadband - they have several of the few reporters in the state that have developed a good background in telecom and can get beyond the soundbites too common in broadband coverage. Well done.

This article led to a great response on Connected Planet Online by Joan Engebretson:

Take this quote from a Frontier executive cited in the MPR story. “Simply pouring money into projects that overbuild and compete with networks built by private investment discourages private investment and does not help reach those highest cost households,” the exec said. “Duplication of the network is no guarantee of success, and is often simply a waste of both public and private resources.”

This argument, of course, ignores the fact that if the new facilities truly were simply a “duplication” of what was already there, there would be no need for them and local municipalities would not be taking on the task of building the new higher-speed networks.

Exactly.