Steuben, Chemung, and Schuyler counties have joined with fiber-optic cable manufacturer Corning to announce a middle-mile network connecting community anchor institutions, wireless towers, etc. Corning picked up the lion's share of the network, $10 million of the $12.2 million price tag.

Local governments, educational institutions, health care organizations and other commercial/industrial businesses also stand to benefit greatly, said Marcia Weber, Southern Tier Central executive director.

Possible applications include “distance learning” between college campus branches and “telemedicine” between rural clinics and major hospitals, Weber said.

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The project has been a top priority for Southern Tier Central in recent years. Weber, who called it “her passion,” was very disappointed when a major federal stimulus grant was narrowly missed last year.

The counties’ share (Steuben, $1.23 million; Chemung, $790,000; Schuyler, $188,000) will fund a non-profit, to be called Southern Tier Network, that has been created to oversee and maintain the network.

The project starts this year and expects to be finished by 2013. In 2014, the project is expected to become self-sustainable -- being funded by the fees it charges for access to the infrastructure.

A fact sheet on the project [pdf] explains the governing structure:

Southern Tier Network is a new not-for-profit, local development corporation (LDC) established to own, build and manage a $12.2 million regional fiber optic backbone that will enable access to the highest speed broadband connectivity available in Chemung, Schuyler and Steuben Counties. Articles of Incorporation for Southern Tier Network have been filed with New York State, and a board of directors is in place, comprised of representatives from the three counties and other community stakeholders.

The fact sheet also explains the idea of Middle Mile and Open Access (referencing Axcess Ontario, a similar project funded by Ontario County):

Southern Tier Network will supply access to the new telecommunications network, not Internet connectivity itself. It will lease network capacity to telecommunication carriers, governments, educational institutions and healthcare organizations, as well as other commercial and industrial businesses. The initiative will focus on partnerships with service providers and encourage the use of the optical fiber backbone to expand competitive services throughout the region, including more rural areas. The optical fiber backbone will be open to any viable entity for use in supporting the creation and delivery of technologies and services. The network is meant to complement the established carrier infrastructure and not to devalue existing investments in the community.

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The Southern Tier Network ultimately will connect to other regional open access networks. STN’s business plan mirrors the successful and nationally-recognized model now operational in Ontario County, N.Y. The Ontario County fiber ring is a model for rural communities seeking broadband access, and was implemented and facilitated by ECC Technologies, Inc., STC’s technical advisor in the Southern Tier Network initiative.

A Frequently Asked Questions handout [pdf] notes that the counties failed to secure federal support through the broadband stimulus program and grew tired of hoping that Google would solve their problems for them.

The Southern Tier Central Regional Planning and Development Board (STC) has been working for several years to make fiber available in our region. As part of those efforts, STC applied for federal funding from the National Telecommunications and Information Administration (NTIA), but received disappointing news in September 2010. STC’s bid for funding, which had reached the final stages, was denied because NTIA did not have sufficient resources to fund the project. In addition, an application to Google’s 2010 “Think Big with a Gig” Fiber for Communities grant program has been put on hold by Google. In the wake of these events, the planning board decided to move forward with its plan to create a fiber optic infrastructure. STC continued its efforts to secure the funding and partners necessary to launch the initiative, and has been joined by Chemung, Schuyler and Steuben Counties, ECC Technologies, Inc., and Corning Incorporated to form Southern Tier Network. Today, a board of directors is in place, comprised of representatives from the three counties and other community stakeholders.

Ontario County was working on a publicly owned solution to Middle Mile long before the broadband stimulus approach made it popular. And now, before most of the stimulus money has been disbursed, they have completed an expanded version of their initial plan.

To date, Axcess Ontario has signed master agreements with eight telecom and broadband companies, including Verizon Wireless and national broadband provider tw telecom. Axcess Ontario is in continual discussions with other service providers, and is working aggressively on its next goal of luring a fiber-to-the-home (FTTH) service provider to Ontario County.

With the fiber ring complete, businesses and municipalities now have access to faster and less expensive broadband, as well as bandwidth equal to global broadband leaders. Businesses can gain access to the ring simply by contacting any of the eight service providers that work with Axcess Ontario.

Residents do not yet have access to faster and less expensive broadband, but they will once a FTTH service provider is secured. Axcess Ontario has been working to lure a FTTH provider for more than a year, including submitting an application on behalf of Ontario County, NY, to Google's "Fiber for Communities" ultrafast broadband project earlier this year. More than 1,100 communities nationwide responded to that project, and Google just announced last week that it was postponing its selection of winning communities to early 2011.

We will be interested to see if they can lure a FTTH provider -- though middle mile can lower the operating costs of providing such a service, the capital costs are not significantly changed. And with the robust middle mile already connecting community anchor institutions, a new FTTH provider cannot count on those high-revenue customers. We have seen this previously in Alberta, Canada.

Axcess Ontario is an example of a good public-private partnership - as noted in Telecompetitor:

Axcess Ontario credits much of its $2 million cost savings to a lease agreement with Ontario Telephone Co., an incumbent local carrier.

This is contrasting with bad public-private partnerships -- where the public bears the costs and risks but the private sector receives the lion-share of benefits.

Stop the Cap! has the authored the most recent of several articles examining a unique middle mile broadband approach in the Finger Lakes region of New York. Their title summarizes the motivation: Ontario County, NY: We Need Fiber So Badly, We Just Did It Ourselves. That story includes a video clip of a recent CNBC Power Lunch 2 minute piece about the Axcess Ontario initiative (complete with the factual error that "no provider offers 100Mbps;" in fact, several community broadband networks offer 100Mbps and Chattanooga has moved beyond with a 150Mbps offering).

Ontario County has a population of some 100,000. To stay relevant in the modern era, they determined the County had to do something to improve broadband availability, so they created a nonprofit called Axcess Ontario, an initiative sufficiently impressive for the County's CIO to receive an award - State Public Sector CIO of the Year.

In creating Axcess Ontario (originally named Finger Lakes Regional Telecommunications Development Corp), the County wanted to be locally self-reliant and did not seek funding from the federal government:

Unlike numerous similar attempts in other parts of the country, Ontario County funded its network without dollars from the American Recovery and Reinvestment Act. Those who created Axcess Ontario were insistent the project shouldn't rely on the availability of outside funding, according to Edward Hemminger, CIO of Ontario County.

The network's startup costs were $7.5 million, which the municipality generated through the Ontario County Office of Economic Development/Industrial Development Agency. The organization is a quasi-government agency created by the state to generate economic activity. Businesses pay the agency for various services, the revenue from which pays for initiatives like Axcess Ontario.

In order to mollify the private sector, the county created Axcess Ontario as a nonprofit with the majority of board seats held by private companies. The network is open access, encouraging private providers to extend it to the last mile and allowing community anchor institutions like hospitals to choose what service provider they want to use.

By May 2010, the network claimed credit for bringing five companies into the area. This story describes one service provider on the network, OneStream.

Historically, these middle mile initiatives have not been successful at solving the last mile problem because even those Axcess Ontario will guarantee affordable backhaul (an ongoing, operating expense), the initial capital costs of building a last-mile network are too extreme for the private sector.

They have applied be a Google Gibabit community, hoping their middle mile investment will catch the Goog's eye.

“Our community had the vision, knowledge and the foresight to invest in a fiber infrastructure that is critical to American innovation and economic growth,” Hemminger said. “The fiber ring ensures our community will never be left behind in the global economy, and this week we can see with the Google Experiment that Ontario County may, in fact, have an opportunity to lead the way.”

In another example of how some private companies continue acting against the public interest, Verizon is again using FiOS as a weapon, threatening not to bring it to a New York town unless the town essentially waives some $12,000 in real estate taxes.

Communities maintain what is called the "right-of-way" - where utility polls are located or conduit is buried underground. Imagine if a cable company had to work out an arrangement with every resident who had a poll in their yard to string cable - what a headache! Instead, companies like Verizon negotiate with the municipal government for access to the right-of-way. In return, communities typically negotiate for things like a franchise fee, often a 3%-5% fee from television revenues that is used to fund local public access channels. The right-of-way is a valuable community asset and the community deserves to benefit from allowing private companies to profit from it.

In this case, Verizon wants to dodge the real estate taxes it owes by taking them out of the franchise fee - which would pass effectively reduce its public interest obligations required by using the rights-of-way. Yet another way in which companies put profits above the community.

Verizon must have some skilled accountants, they never seem to pay taxes. When they sold off their customers in New England to the failing Fairpoint, they also avoided paying taxes on the income from the sale.