The following stories have been tagged at&t ← Back to All Tags

Auburn Essential Services; A Workhorse in Northeast Indiana Saves Jobs, Serves Public

In 1985, Auburn Electric became one of the first communities in the midwest to deploy fiber. At the time, the purpose was to improve electric and voice systems substation communications within the municipal utility. That investment laid the foundation for a municipal network that now encourages economic development and saves public dollars while enhancing services.

Auburn expanded its fiber network beyond electric systems in 1998. The utility began using the network to serve city and county government operations. It is not well known, but Auburn offered gigabit service to its public sector customers way back in 1998.

The benefits from the deployment prompted community leaders to develop an Information Technology Master Plan in 1998 that would answer the question of what other ways the fiber could serve the community? As part of the Master Plan, Auburn leaders collected information from other communities that were capitalizing on their own local fiber. While Auburn made no immediate plans, they kept an open mind, waiting until the time was right.

In 2004, Cooper Tire and Rubber (now Cooper Standard) was about to be sold from its parent company. The $1.6 billion auto component manufacturer needed a data center but bandwidth was insufficient and inconsistent in Auburn. Cooper considered leaving because the incumbents, Mediacom and AT&T, could not or would not provide the broadband capacity the company needed. If Cooper left town, an estimated $7 million in wages and benefits from 75 high-paying tech jobs would also leave. At the time, Auburn was home to 12,500 people.

County Courthouse in Auburn, Indiana

According to Schweitzer, the City tried to persuade the telephone company to find a solution with Cooper but the two could not reach an agreement. Rather than lose Cooper, the City of Auburn stepped in to fill the connectivity gap in 2005.

In a 2007 interview with Public Power magazine, Schweitzer noted advantages in Auburn that facilitated the project:

“We also had a major tier-one Internet provider with a point of presence in Auburn, so we had some primary pieces in place to affordably and quickly extend business-class Internet service to this customer. We were preparing for this growth, but the trigger was this company that was going to leave unless we could serve them,” Schweitzer said. 

Shortly after connecting Cooper Standard, Auburn began serving several other businesses. The success of the venture lead to a feasibility study which included a market survey. The results showed residential and commercial interest in a municipal network, encouraging Auburn Electric to ask the community for guidance on how to proceed. From the 2007 interview:

“Our town hall meetings were very open,” said Schweitzer. “This broadband effort is about our community, and our community has told us we need to pursue this important project. We have tried to do a thorough job of communicating with customers to determine their needs as we moved forward.”

In pursuing the high-speed broadband project, the city follows the same philosophy it has used for other city infrastructure projects, Schweitzer said.

“We have good communication with the community, as this is a grass roots effort, rather than a top-down approach,” Schweitzer said. “We are also doing due diligence in all new areas we encounter. We aren’t making any assumptions on this project. The only thing we would like to do differently is to move more quickly on the project, but we know our steady approach will serve us well.”

Auburn Electric, the owner of the network, operates and maintains the fiber infrastructure. The utility expanded the network incrementally to serve its core business. The network is approximately 205 miles and cost approximately $12 million for fiber and electronics. Auburn Electric uses the network for Advanced Metering, SCADA, and smart grid applications. Auburn Essential Services (AES) leases fiber from Auburn Electric to offer customers data, voice, and video services.

Auburn Essential Services Map

The electric utility created AES as a sub-department to operate the electronics that provide telecommunications services. In order to purchase the electronics to light up the network, AES borrowed $2.5 million from Auburn Electric via an interdepartmental loan in 2005. Within seven months, AES was cash flow positive.

By 2007, AES was also serving small business and residential Internet and phone needs. In 2012, the utility started offering television service. The network has passed approximately 6,500 properties after eight years of incremental expansion.

In a recent interview on the Broadband Bits podcast, Schweitzer told Chris Mitchell the network has helped keep local prices in check. Residential Internet prices vary from $22.95 (1.5 Mbps/512 Kbps) to $169.95 (55 Mbps/10 Mbps) per month. AES does not use pricing gimmicks, reinforcing the philosophy that every customer matters. From the podcast interview:

"We are not going out there trying to lure customers with the lowest price," says Schweitzer,"we going out there to serve the community with a healthy, sustainable, quality product."

AES kept the public informed of how the build was proceeding with interactive maps, available here. This kind of transparency is well in keeping with the traditional of community ownership of infrastructure.

LightTUBe Financially Secure in Tennessee

Tullahoma Utilities Board's triple-play FTTH LightTUBe, began serving Tullahoma in 2009. The fiber network utility is paying off its city bond debt on schedule reports the Tullahoma News.

The network's income during the first four months of fiscal year 2014 is a positive $58,939. General Manager Brian Skelton spoke with Chris Mitchell in July 2013 and expressed confidence that that network will continue to operate in the black. The News reported on our podcast interview with Skelton and provided some recent updates:

With an estimated potential customer base of 9,000 in the TUB service area, LightTUBe services 3,201 fiber customers. That number is slightly ahead of goal (3,186) and represents nearly 36 percent market penetration against primary competitor Charter Communications.

Tullahoma deployed its network to encourage economic development. In 2011, we reported on J2 Software Solutions. The company located its headquarters in Tullahoma because LightTUBe offered fast, reliable, affordable service. 

According to the News article, expenditures on Internet service remain consistent while subscriptions grow. The Tullahoma Utilities Board (TUB) only recently approved a $7 rate increase for video service due to an increase in the cost of television content. When content rates rose in the past, TUB chose to absorb the increase but the cost of content continues to increase for all providers. Since 2009, TUB increased Internet service speeds five times without increasing prices. From the article:

”LightTUBe is in a very comfortable position from a financial perspective. Our biggest concern at this point is the unreasonable price increases that we (and others in the video business) are seeing from many of our channel providers,” said Skelton.

That comfortable financial position appears to rest largely on the shoulders of LightTUBe’s Internet service.

While video and telephone services together generate enough income to offset the system’s net maintenance and depreciation costs, Internet services generate enough income to offset its additional customer service, sales, administration and debt costs.

Unlike the private providers it competes against, Tullahoma is limited in where it can offer service. State law prevents it from serving customers outside its electrical territory - something AT&T and Comcast lobbyists have preserved year after year by killing bills that would remove this damaging law. Across Tennessee, local businesses, residents, and anchor institutions are stuck with slower, less reliable connections despite desiring expansion from the nearby utility but they are denied.

Because Tennessee law prohibits municipal utilities from providing their fiber services outside of their electric service territory, LightTUBe cannot offer its 1G Internet to – for example – the Coffee County Joint Industrial Park, which is serviced by Duck River Electrical Membership Cooperative (DREMC). The joint park, located five miles northeast of Tullahoma and outside of TUB’s service area, has cable-based Internet service.

Dublin, Georgia: Offering Connectivity to Businesses, Schools, Government Since 1999

Dublin, home to 16,000 people, is also home to a network that snakes through the city and parts of Laurens County. In addition to a natural gas utility that serves the region, the city provides connectivity to two area school districts and local businesses. We contacted Guy Mullis, IT Director for the City of Dublin.

The fiber optic network was installed in 1999 to provide connectivity for the two separate school systems in the community, Laurens County Schools and Dublin City Schools. The school districts needed better connectivity because dial-up was the only option at the time. The school districts could not afford the cost of installing their own fiber networks.

The City used its own funds to construct a network that is 85% aerial. Mullis was not an employee of the City at the time, but he estimates the network cost approximately $1.5 - $2 million. He also believes the funds were a combination of capital improvement funds and economic development funds. From the start, the plan has been to serve the schools but also to provide connectivity to spur economic development.

Eight city school facilities and six county school facilities use the network today for connections between buildings. Dublin City Schools have 10 Gbps speeds between facilities; Laurens County Schools have equipment in place for 1 Gbps connections between schools. Both school districts use the Georgia Technology Authority for Internet access.

Once the network was in place, AT&T and Charter Communications began building in Dublin. Mullis says he does not believe AT&T and Charter would have invested in Dublin in 2000 if not for the presence of the community network. He notes that AT&T begin installing DSL in areas of town within a year of the fiber network deployment. 

During the first few years, the City connected its network to the Internet with a 45 Mbps AT&T connection but needs quickly outgrew capacity. The City looked for alternate ways to connect to the Internet. City staff discovered that a major dark fiber backbone ran through Dublin from Atlanta to Jacksonville, Florida. The company that owned the line (the company has since been purchsed by Level 3) allowed Dublin to splice into the dark fiber to connect to Atlanta. The opportunity allowed Dublin to buy bandwidth at Atlanta prices rather than being stuck with massive markups by the few firms that can provide access. The City has since spliced another line to the backbone to achieve redundancy.

In 2006, the City received a grant through the Georgia Telecommunications Authority to expand wi-fi in the community. With matching funds, the community installed over forty wireless access points and now provide wi-fi hotspots within the City. The presence of the fiber network for backhaul helped secure the grant.

Dublin Wi-Fi Logo

Twelve Laurens County and Dublin City facilities connect to the network. The City also uses the network for voice between city facilities, saving significantly by avoiding dedicated phone lines to each building. When new companies consider moving to the community, the ability to work beyond agency silos is a positive factor, says Mullis. Businesses recognize that cooperative government helps them achieve their goals.

There are forty-five business customers including YKK fastening and architectural products and  Farmer's Home Furniture. The network serves a variety of businesses, including banks, CPA firms, law firms, and hospitals. Prior to the deployment, incumbents could not offer the high-speed connections businesses needed. Since the deployment, cable and DSL have come to Dublin, but the City's commercial customers stick with their City service. Mullis believes local businesses appreciate working with a local provider. When a customer calls with an issue, they know exactly who will address the problem. "They are going to talk to me," says Mullis.

The City currently supplies 200 Mbps for Internet traffic; business and government customers share the bandwidth. Businesses with multiple offices in the area like being able to use the network for local traffic rather than sending sensitive data across the open Internet.

We have reported on many Georgia communities in the past (e.g. MonroeLaGrange, and Thomasville). Unlike the states that surround it, the Peach State does not presently impose barriers on local communities that consider publicly owned networks.  In 2013, ALEC affiliated legislators sponsored sponsored HB 282 but failed to revoke local authority. We anticipate the fight will continue into 2014 and beyond.

AT&T and Charter did not get the job done in Dublin so the community took care of themselves. If large incumbents do not find value in a community like Dublin, it is of course their choice to limit investment. But they should not be able to prevent a community from investing in itself.

Franklin County, Alabama, Task Force Investigates Internet Options

In a reminder of just how poor telecommunications can be in this country, Franklin County in rural northwest Alabama has formed a Task Force to investigate how it can get something better than dialup.

“The Internet has become an important as having electricity and water,” said Cole, an extension agent in Franklin County. “For our businesses to attract customers and to attract other businesses to come in here, we have to have broadband Internet access.”

But it turns out that they don't even have access to modern telephones in some instances:

Some Franklin County residents have access to dial-up Internet, which is slower than broadband high-speed Internet service. However, some Franklin residents still have a “party line” for phone service.

Who has refused to invest in these exchanges? AT&T is the major provider in the area (followed by CenturyLink) and it came to a Task Force meeting to talk about what "needs to be done to bring high-speed Internet to the county."

Unfortunately the report doesn't note what the ideas were but we would be surprised to learn it doesn't involve some form of federal or local subsidy to get AT&T to invest in this area. There is not much profit to be made, so AT&T is more likely to push these people into expensive 4G LTE wireless solutions than anything that would compete with modern connections.

This is not the first such meeting - as noted by a previous article:

Commission Chairman Barry Moore said meetings were previously held to discuss the lack of high-speed Internet, but nothing materialized.

When it comes to local governments solving their problems by investing in themselves, AT&T falls over itself to stop them - even if it means an area will remain unserved.

We read of a conservative Republican holding out hope for federal grants to subsidize such a project.

In addition, Kreg Kennedy, a district field representative for U.S. Rep Robert Aderholt, R-Haleyville, discussed the possibility of federal grants to help get the project underway.

It is a fascinating situation when AT&T angling for taxpayer money from the federal government is seen by many as the "private sector" in action while local governments building networks without any use of taxpayer dollars (as the vast majority are) is cast as an illegitimate intervention in the sacred market.

Solving problems locally whenever possible is a wiser decision. When it comes to better access to the Internet, local governments should be investing in their own community, not trying to bribe companies to expand that have a history of terrible customer service and reluctance to invest in next-generation networks.

If Franklin County really wants to solve its problem, it should look to the community networks in Tennessee or the new network in Opelika, Alabama.

AT&T Fails Big in Dallas, Makes Big Claims for Austin

Even though I regularly read examples of terrible customer service from the massive corporations like AT&T, Time Warner Cable, CenturyLink, and more, I apparently retain the capacity to be surprised as how bad they are. The Dallas Morning News recently ran this piece: "AT&T Never Misses An Opportunity to Miss An Opportunity."

In a neighborhood with poor access to satellite services and miserable with Time Warner Cable, people were thrilled when AT&T proclaimed it would be investing in U-Verse. Even though U-Verse is an amped-up DSL service that barely competes with cable connections, people who are fed up with Time Warner Cable were excited for a choice.

Lo and behold, right in the thick of the CBS-Time Warner fight, I received notices from AT&T that Uverse was now available in my neighborhood. This is something I’ve waited more than two years for. I was thrilled. Finally, there’s choice! Since receiving my first notice from AT&T in early August, I’ve been inundated with AT&T offers. Dozens of pieces of mail have arrived in my mailbox. Clearly, AT&T wanted my business.

And I wanted badly to give it to them. I phoned one day after receiving my first notice. I signed up immediately for service. The friendly sales person told me because of high demand, she couldn’t set an installation date for sooner than two weeks. Whatever. Fine. We agreed on August 19, somewhere between 9 and 11 a.m. I couldn’t wait.

Only they didn't show. They cancelled. And they cancelled the next appointment and put him off time and time again. But now he has a date of when he will be able to take service ... and I'm not making this up. 12/31/2036.

Those familiar with AT&T's announcement in Austin may think that it will take 23 years to upgrade Dallas because the massive corporation is focusing so much attention on Austin where they are kind of promising a gig.

Karl Bode has long been covering what he calls Fiber to the Press Release from AT&T.

The company has made it repeatedly clear that they aren't interested in investing a huge amount of money in fixed-line networks when the real money is in wireless and $15 per gigabyte LTE overages. While the company has made much of "Project VIP" network investment project, their investment numbers for that project have been a lot of smoke, mirrors and very fuzzy math.

However, local folks tell me that AT&T is indeed pulling permits and doing something differently - so this is not entirely smoke and mirrors. Just mostly.

And over at Stop the Cap, Phil Dampier has a deeper dive into AT&T's pool of obfuscation:

The five-county Austin–Round Rock metropolitan area has a population of 1,834,303 residents. Assuming AT&T managed to offer fiber service to 100,000 residents — and that is a generous figure, that represents only 5.5% of Greater Austin. The old U-verse is still a work in progress in several Texas cities, so it could take years for AT&T to deploy fiber in Austin. Expect AT&T to start with the low-hanging fruit — multi-dwelling units such as apartments, condos, and other similar buildings, some that already have existing fiber connections in place.

We still have no idea what AT&T is going to charge for its "Gig" ... which will start at 300 Mbps. Don't count on AT&T to suddenly invest in FTTH in your town - much better to take action however you can to solve your problems locally.

Locally Owned Networks Protect Privacy and Limit Consumer Surveillance

Since the story broke about the NSA domestic spying practices, debate among concerned citizens has revolved around the Big Brother surveillance model. Most of us shudder at the thought of our federal agencies from DC watching, noting, and recording our actions. However, there is another type of Internet surveillance that largely escapes notice and likewise threatens our liberty. 

Both types of surveillance are perversely encouraged by a poorly regularly market that allows big corporations to profit from violating our privacy.

We have long known that our online habits are being recorded and combined with other personal data that allows companies to show us personalized ads. But Free Press recently offering a compelling explanation for how this model can harm us. From the Dana Floberg article:

And about those “personalized ads” — this isn’t about Facebook learning you prefer Coke over Pepsi. This is about corporations targeting us where we’re vulnerable. This is about your Latina neighbor who sees ads for risky high-interest credit cards. This is about your cousin who just got laid off and now sees ad after ad selling him dangerous fast-cash offers and subprime mortgages. This is about your friend who lives in a rougher part of town and sees higher prices whenever he shops online. This is about all of us.

These ads aren’t personalized — they’re predatory.

Floberg goes on to describe how shopping sites alter prices based on income and location so more affluent shoppers can access better prices and coupons. These sites both use and reinforce stereotypes as they take advantage of the most vulnerable in our society.

Without laws to protect consumers, there is little we can do to stop this predatory behavior. Just as the market encourages corporations to violate our privacy to sell its goods, big corporations are also profiting in their work with law enforcement at all levels.

An AP article by Anne Flaherty notes that AT&T charges $325 to activate a wiretap and $10 per day to maintain it. Verizon charges the government $775 for the first month and $500 per month after that to continue it. It is hard to believe these charges are in line with actual costs. 

Meanwhile, the other massive providers are undoubtedly aware of what allegedly happened when Qwest CEO Nacchio refused to help the NSA illegally spy on Americans - the NSA cancelled a lucrative contract with Qwest. This provides a major disincentive to follow the law, particularly when they can expect retroactive immunity after violating the law for years.

What would become of any provider who dared to say "no" to the NSA? We found out when Xmission, serving consumers via UTOPIA said "no" - absolutely nothing happened. No fearful complicity at local Xmission. Xmission is focused on serving its customers, not Wall Street.

Massive corporations collect information from millions of customers; the more data, the higher the value. Even if a municipal network tried to collect and sell private data, the opportunity to profit would be limited because their reach is localized. 

Community owned networks, whose focus is on serving the community rather than maximizing profit, have no reason to collect and sell data. In fact, it is a revenue source to avoid. With a local customer base and more accountability, selling data would violate the trust that gives their brand a competitive edge. When it comes to protecting privacy, supporting smaller scale providers that are rooted in the community is a far better protection than anything Washington, DC, can or will provide.

AT&T and American Eagle spying image created by the Electronic Frontier Foundation and available via Wikimedia Commons.

Shafter Network Expands To Serve Local Businesses in California

The community of Shafter enjoys savings, better public safety, and more educational opportunities with the municipal fiber network that we wrote about two weeks ago and discussed in last week's podcast. In 2006, Shafter spent $200,000 on its I-Net to serve local schools and government in the core of the downtown area. While the community had originally planned to build a FTTH network, the tumultuous economy dictated otherwise and the community adjusted its course.

The community is now expanding infrastructure to several areas closer to the edge of town in order to serve local business. With next-generation fiber infrastructure in place, Shafter expects to attract several providers interested in serving businesses over its open access network. Completion is scheduled for the fall of 2013.

A 25 mile fiber backbone ring is now under construction and will loop to two industrial areas near the edge of town. Both complexes sit very close to the two main railroad lines that run through the town and provide easy access to transport. In addition to the larger loop, one of the industrial areas, will contain a 10 gigabit ring and the city will light two separate commercial rings to provide 1 gigabit service. This phase of Shafter's project will cost $1.5 million and required equipment will cost another $600,000. The network is underground, with 99% in city road rights-of-way. The entire path travels through greenfield areas so there is almost no infrastructure to avoid or remediate. General fund dollars, rather than bonding, borrowing, or grants paid for the entire open access network.

We learned from IT Director Scott Hurlbert that oilfield services company, Baker Hughes, invested $70 million to build a campus in Shafter. AT&T serves the company now with copper lines but "they don't like it," says Hurlbert. A 2.1 million square feet Target distribution center sits nearby waiting to switch to the Shafter fiber network.

Ross Dress-for-Less is now developing a 1.7 million square feet distribution center in the area and will likely take service from AT&T and from a different provider over the Shafter fiber for redundancy. CenturyLink's longhaul fiber runs through the Union Pacific railroad line and Shafter's network will link to it for external connections. 

Hurlbert told us there will also be a separate ring in one industrial area that is only for city security cameras, traffic control and for commercial customers specifically requesting a redundant diverse path.

In California, Tough Economic Times Led Shafter To Adjust Network Plan

In the 1990s, the community of Shafter, California, began developing its strategic plan; the move would eventually lead them to build a municipal broadband network. The town of 17,000 still depended primarily on agriculture but manufacturers were relocating to the community, drawn by its proximity to the railroad and its open space. Potential employers increasingly focused on broadband access as a priority and Shafter realized broadband would be critical to continued growth.

Shafter’s Assistant City Manager Scott Hurlbert recently explained to us how the community built its own fiber network to serve commercial clients, local government, and schools. This incremental approach is not unique but Shafter has no municipal electric nor gas utility, which does puts it in the company of Santa Monica, Mount Vernon, and a few other communities that have built networks without having a municipal power company.

Shafter’s City Council examined its strengths and its weaknesses and found a way to build a network with no borrowing or bonding. The community continues to expand its fiber network, attracting businesses and improving quality of life in this central California town.

In the 1990s AT&T was the main business services provider and it would only improve business telecommunications on an order-by-order basis. Companies that wanted to build beyond the developed town had to pay for the installation themselves, often waiting months to get connected. Prices were "obscene" and the delays almost killed several commercial deals. Even today AT&T takes the same approach in Shafter.

When he joined the City in 2005 as the IT Director, Hurlbert and his staff researched wireless technologies but determined that fiber-optic deployment would be the best option. At that time, the bandwidth demand was already intense and a wireless network would need fiber for backhaul. Hurlbert and staff also investigated other communities, including Chelan, Washington, to look for workable models.

In 2006, three master planned residential subdivisions were approved for expansion of the City of Shafter. The city saw this as an opportunity to start a large-scale FTTH network to serve both business and homes. They developed a triple play model, planning to connect to each of the 11,000 future homes. The city would use revenue from the FTTH network to expand out to surrounding areas for more industrial customers and build a new network for government, schools, and public safety. But when faced with a troubled economy in 2008, plans for the subdivisions evaporated and the FTTH plan was also put on hold.

The community decided to adjust course with a focus on economic development, improving municipal connectivity, and improving public safety. “Jobs, education, safety” became the new mantra. “It’s a cycle,” Hurlbert says, “and if you break that chain the whole thing starts to fall apart.” Community leaders wanted to create a broadband network to draw in more local businesses, serve students, and generate public savings.

Shafter City Seal

At the time the City spent $6,000 per month for six T1 connections. In 2006, Shafter asked AT&T for a quote to connect City Hall to a nearby correctional facility. The relatively small fiber upgrade would have cost $140,000 to build and up to $5,000 per month to lease for a 100 Mbps connection. Rather than depend on AT&T, Shafter decided it was time to start investing in community fiber infrastructure. Budgeting would be predictable and the City would control a network that would provide more capacity.

With less than $200,000 from the general fund, Shafter built fiber connections to city government offices, police offices, the county library, volunteer fire department facilities, the veterans’ hall, the county court house, a local youth center, school district facilities, and a fiber-to-fiber connection with the county sheriff's private network. The city also connected the correctional facility that is now no longer in use. From the day they lit the network, they have never experienced a failure. The existing fiber network consists of four miles in the city core and provides 10 gigabit capacity between its municipal facilities.

Prior to the connecting to the network, the school district used a T1 connection for its main campus and wireless connections to a second campus. Hurlbert tells us that the county superintendent provided multimedia courseware and the T1 lines were sufficient, but the wireless connection did not support it. A large segment of the student body could not access the material, putting any Shafter students behind the learning curve.

Hurlbert established E-rate provider status for the city, and now supplies a dark fiber connection for the school at a $1,000 per month. Shafter’s school district qualifies for a 90% E-rate reimbursement, so the school district actually pays $1,200 per year for 1 gigabit connectivity between facilities. Hurlbert says the city recouped the cost of the expansion in three years and increased the network’s footprint for future expansion.

The City later received a grant from Homeland Security to build a communications tower, which connects to the network. Security cameras on the tower have prevented theft and documented criminal activity at a relatively remote industrial campus. The next phase for the network will include increased public safety applications such as traffic light control and more cameras in industrial areas. 

Shafter has not abandoned its dream of an extensive FTTH network. Hurlbert tells us they have a "guinea pig" subdivision where the developer installed conduit to each property. As the network continues to grow, he sees the "jobs, security, education" chain expanding along with it. Hurlbert says a patient community willing to stick to its long-term vision is critical for success. 

AT&T Lobbying Likely to Increase Wisconsin School, Library Telecom Costs

The University of Wisconsin recently withdrew from its contract with WiscNet, threatening the future of the network. Stop the Cap! reports the University bowed under pressure from Republican lawmakers and threats of litigation from the likes of AT&T, CenturyLink, and the Wisconsin State Telecom Association (WSTA). Costly litigation could interrupt UW's research and educational work and UW must consider its relationship with the legislature and the future of state funding.

Once again Republican legislators chose the powerful telecom lobby over taxpayers. WiscNet is a buyer coop that allows schools and libraries to keep their telecom costs lower by working together. Weakening WiscNet means the schools and libraries may have to pay higher fees just to maintain the same level of service. 

The telecom industry makes generous contributions to most Wisconsin lawmakers, but Republicans in particular have been enthusiastic about knee-capping any perceived threat to AT&T's monopoly in much of the state. With WiscNet in the cross hairs, ALEC legislators in Wisconsin can expect renewed campaign support. Senator Paul Farrow and Representative Dean Knudson, spearheading efforts to dismantle WiscNet, receive sizeable donations from WSTA, CenturyLink and TDS Telecom.

If WiscNet cannot recover from the loss of UW, local taxpayers will be the ultimate losers as they have to pay more to keep essential institutions connected. WiscNet provides economical broadband service to members all across the state and ample evidence suggest higher rates accompany private service. From the Stop the Cap! article:

Many of WiscNet’s members report that “going private” for Internet connectivity will more than double their costs. This was confirmed by Wisconsin’s Legislative Audit Bureau, which reported a member paying WiscNet $500 month for Internet service would face bills of $1,100 or more if provided by AT&T or other telecom companies.

But the benefits of WiscNet go far beyond higher costs (which are substantially higher than the example cited for larger institutions). WiscNet has enabled all manner of cost-sharing, including centralizing data storage. These are examples of how local governments and institutions can be responsible stewards of public dollars; unfortunately a majority of Wisconsin Legislators seem to believe the best use of public money is to pad the profits of AT&T.

We've written about these efforts in past years but it seems that AT&T is closer than ever to expanding its revenue from the taxpayers of Wisconsin, all with the blessing of state legislators who scream about wasted taxpayer dollars.

Consultant Argues Never Used Financing Mechanism Also Won't Work in Palo Alto

I was troubled to see Broadband Communities publish an odd and misleading story about Palo Alto in the May-June issue [pdf]. Authored by Stephen Blum of Tellus Venture Associates, a consultant that has been hired by Palo Alto in the past, it showed a remarkable level of ignorance about community owned fiber networks and broadband more generally.

The title alone, "Can FTTP Work in Palo Alto?" is just odd. Why exactly would FTTP not work in Palo Alto? It works in hundreds of other cities and towns, most of whom are less well positioned than Palo Alto for such a venture. A more honest title would have been "Consultant Argues Never Used Financing Mechanism Also Won't Work in Palo Alto." Blum made a very good case for that narrow argument but fails to lay out any convincing evidence that a variety of other models are doomed.

Parts of the article can only be called cable and DSL boosterism - such as repeating the talking point that AT&T's U-Verse and Comcast already offer "high levels of service at competitive rates." Competitive to what? Neither can deliver the speeds offered by modern fiber networks and are only "competitive" if one ignores the much slower upstream speeds, higher prices, lesser reliability, problems of oversubscription, and poor customer service one gets from those providers.

Reminds me of "Slick Sam" from Lafayette and the "functional equivalence" between DSL and FTTH.

Blum apparently knows better - that Palo Alto residents are "happy" with the existing services because they have not spontaneously marched down El Camino Real demanding faster speeds at lower prices. This is the wrong measure - reminiscent of the now oft-quoted Henry Ford line that if he asked people what they wanted, they would have said "faster horses."

The number of specific errors in this piece are many, and have been well documented by those familiar with the history of Palo Alto's studies. I want to focus on just a few. Let's start here:

Overall, 79 percent of households would have to pay $3,000 apiece to fully fund FTTP construction costs.

YIKES! Cue the foreboding music! Palo Alto has something like 25,000 households. If 20,000 of them paid $3,000 then the City would have $60 million in addition to its present $14 million dark fiber reserve - a staggering $74 million of theoretical money that has nothing to do with anything. I know of no network that has been built in this manner.

This is an absurd measure for whether a network is feasible. Networks are not financed in this way, partially because, as the author adroitly notes, it doesn't appear likely to work. Community owned networks are financed using a few common methods, most often revenue bonds issued by the utility. Palo Alto's past studies of this approach reflected a desire to avoid that path and the results of those studies in no way determine whether a city owned FTTH network is feasible in 2013 given the present assets and environment.

The user-financed model remains a peculiarity and quite possibly will have a role to play in the future (though almost certainly not to finance the entirety of a system). Palo Alto would be crazy to hinge its decision of whether to invest solely on the feasibility of each home owner paying its full connection cost up front.

Palo Alto Logo

In examining the likelihood of success for Palo Alto, it makes sense to consider similar communities that have made the investment:

Although there were some apparent FTTP successes (for example Bristol, Va., and Cedar Falls, Iowa), cities that had more in common with Palo Alto, such as Alameda and Provo, Utah, were failing.

There is nothing "apparently" successful about Cedar Falls or Bristol. They are unambiguously stunning successes, with take rates north of 70 percent and have led to thousands of jobs. And both can deliver a gigabit anywhere in town at a moments notice at rates a fraction of what major carriers charge. But he believes Alameda (with an older HFC cable system) and Provo (having to deal with strict state laws not present in California) are more relevant comparisons. There are some 140 other citywide networks that might be more relevant, but Blum ignores them.


He ultimately concludes that Google's experience in Provo will somehow inform local government decisions around network investments. This is some of the worst advice I have read. First of all, Google's costs are different than any other firm, let alone a local government because it already runs one of the largest fiber networks on the planet (possibly the largest). The most brilliant engineers on the planet work for Google. It doesn't publish its costs and is a private sector firm with far different motivations and incentives than a local government.

In short, there might not be a worse comparison than Google for a local government evaluating its own plan for meeting long term telecommunications needs.

All of this being said, Palo Alto could rationally choose not to invest in a FTTH network. It would have to compete against Comcast and AT&T, who engage in predatory tactics while federal regulators ignore potential Sherman Anti-Trust violations.

Given the many wonderful aspects of the community, particularly for people who don't like winter, maybe DSL and Comcast cable will be good enough for the heart of Silicon Valley. That is their choice, not mine (my wife and I love Minnesota winter). I just hate to see such an imbalanced and inaccurate case made suggesting it could not work.