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Louisiana and Michigan Towns Pass Resolutions to Support Municipal Network Authority

Two more communities have gone on the record as supporting local authority for telecommunications infrastructure investment. Communities in Vidalia and Sebewaing passed resolutions supporting the FCC's efforts to use its authority to discourage, prevent, and remove state barriers.

Vidalia, on the west side of the Mississippi in Louisiana, recently began offering free Wi-Fi in its new sports complex and along its riverfront. According to Mayor Hyram Copeland, the lack of free public access left local leaders feeling behind the times. From a Natchez Democrat article in February:

“I was embarrassed to say, ‘No,’ but now I can say we do,” Copeland said. “But the end result of all this is that we will have moved this community forward.”

Vidalia seeks funding for a fiber network. Apparently, they are ready with a design and have the technical expertise in-house, but lack of funds have held up the project.

Vidalia's Resolution is almost identical to those in Ammon, Moultrie, Westminster, and Chanute.

Vidalia Seal

We reported on Sebewaing, located in Michigan's "thumb," last summer. The community runs its own electric utility and, due to lack of interest from incumbents, decided a FTTH network was a project they needed to pursue. According Melanie McCoy, from Sebewaing Light and Water, the project is proceeding as planned.

Sebewaing's Resolution uses the same language to address the points we see in Resolutions from the other communities: the need for better access, the importance of broadband infrastructure to local economies, and the important role of local government in the decision making process. Each community has expressed its support of the FCC's decision to exercise its authority under Section 706 of the 1996 Telecommunications Act.

Merit Collaborates With OARnet and Local Community in Hillsdale, Michigan

A recent press release from the Merit educational and research network in Michigan announces a new connection to its Ohio sister, OARnet. Member entities and local communities now enjoy better redundancy, expanded reach, and better services. Local communities continue to benefit from the presence of the middle mile infrastructure.

The network helps local Hillsdale College to cut connectivity costs; the Merit announcement quotes Hillsdale College leadership:

"Hillsdale College has been a Merit member since 1992," stated David Zenz, executive director of information technology services for Hillsdale College, "and it was always a dream to figure out some way to eliminate expensive data circuit costs to free up funds to purchase more bandwidth. In 2008 The City of Hillsdale, the Hillsdale Intermediate School District, Hillsdale College, and Merit figured out how to do just that."

Through a long term collaborative effort, Merit, the City of Hillsdale, Hillsdale Board of Public Utilities (BPU), Hillsdale College, and Hillsdale County Intermediate School District (ISD) came together to establish the Hillsdale Community Network. Each entity now benefits from lowered connectivity costs, better infrastructure, and improved opportunities. 

A 2009 story from Merit, describes the situation at ISD:

In 2006, Hillsdale County Intermediate School District (ISD) found that it was in desperate need of increasing its network bandwidth to meet the growing demands of its users. The District had 62 miles of fiber optic cabling strung around the county, but was looking for ways to increase its available bandwidth in Hillsdale without increasing its costs. This time, a partnership between the two organizations [ISD and Hillsdale College] and others in the area began to make sense. 

According to the article, Merit managed the project from start to finish. The City has cut costs and improved economic opportunity. Also from the article:

"We saw a cost reduction for the city," according to Eric Macy, contractor for the City of Hillsdale and Nonik. "We knew that we needed infrastructure for the future. We could have done a local network on our own, but we wanted to collaborate with others. If we had to do it all ourselves, it would have taken a lot longer to pull off." 

"We want to bill the city as a progressive place for economic development. As part of this project, we were able to provide some economic development." 

The expansion to bring OARnet and Merit together is part of the REACH-3MC project, funded by American Recovery and Reinvestment Act (ARRA) grants. We recently reported on Merit's completed segment expansion to rural Alpena, also part of the project.

Merit Network Completes Another Segment in Rural Michigan

Last fall we shared news about the Merit fiber optic network moving across Michigan. An October 24th press release from Merit announced that engineers recently completed another 3,000 foot segment. The expansion created a 10 Gbps connection between Alpena and Powers, Michigan. Powers is a rural community of less than 400; approximately 10,000 people live in Alpena.

The network began in 1966 as a way to connect state and research facilities. Since then, it has evolved to connect an extensive list of schools, libraries, and government facilities. 

From the press release:

"We've built fiber-optic infrastructure all the way to Superior, Wisconsin," said Michael Milliken, director of network engineering at Merit Network. "In Michigan, we have built and lit most of the REACH-3MC network in the Upper Peninsula, with routes going to Ironwood, Menominee and Houghton. Just the connection between Houghton, Hancock, and Calumet remains to be completed in Michigan. We also need to complete the DWDM network paths into Wisconsin and Minnesota." 

The REACH-3MC (Rural, Education, Anchor, Community and Heath care – Michigan Middle Mile Collaborative) project is funded by two American Recovery and Reinvestment Act (ARRA) grants. The project will expand the original Merit network by an additional 2,287 miles. The project overview PDF provides a detailed map and information on Merit members.

Small Michigan Town Issues RFP for FTTH Network

The community of Sebewaing, located in the "thumb" of Michigan is moving closer to its own FTTH network, which will be the first new municipal FTTH project in the state.

Because of a state law impinging on local authority in Michigan, local governments must first issue an RFP and can build a telecommunications network themselves if they receive fewer than three qualified bids. If the community builds the network themselves, it probably must adhere to the RFP as if it were a private entity. This approach ignores the fact that a community operates a network with different incentives than a private company, so the two are not interchangeable. 

We wanted to know more about this effort, so we contacted Melanie McCoy, Superintendent of the municipal utility Sebewaing Light and Water. We discovered that the town of 1,700 residents, known for its beet farming, has several factors going for it. 

Communities with their own utilities already in place have personnel, equipment, and expertise which saves money and time. And because they already own the utility poles, they are often able to get started quickly rather than waiting for other firms to do "make-ready," which can take months as wires are shifted on poles. Sebewaing has a municipal fiber loop currently in place - another plus. McCoy tells us the fiber was installed in 2001 and 2002 at a cost of about $50,000.

Private Internet choices were limited to dial-up for about $20 per month or a T1 connection for around $1,000 to $1,500 per month. At the time, Sebewaing Light and Water shared a T1 connection with local businesses.

Residents, business and government needed better connectivity and community leaders also realized the need to boost economic development. Sebewaing Light and Water leadership also wanted to increase efficiency with a SCADA system and considered a telecommunications utility a good investment. And looking toward the future, they knew installation of the fiber would position them favorabley for future investment. 

Sebewaing Map

Changes in community leadership, tight budgets, and legislative changes interrupted plans to connect the fiber to homes in Sebewaing. The community did the most they could with what they had, however, and connected city facilities to the fiber loop.

Within a couple years, local business owners who could not get the speeds they needed from incumbent cable and DSL providers, approached Sebewaing Light and Water asking to be connected to high-speed Internet.

In 2011, Sebewaing commissioned a feasibility study from Pulse Broadband based on the concept of serving 1,000 households with an open access model. The RFP calls for 1 gig capacity symmetrical service. McCoy estimates the network to be about 18 miles of fiber on the mostly aerial network in the service area. The project estimate is around $1 million and the city council plans to use funds from the city capital improvement fund.

McCoy notes that suppliers, consultants, and bandwidth suppliers have already approached the city with inquiries. Closing for the RFP [PDF available online] is late June, so look for updates later this summer.

City and School District Team Up for Fiber in Royal Oak, Michigan

The City of Royal Oak, Michigan, a Detroit suburb and home to 57,000 residents, just announced it will be partnering with the school district to build a fiber optic network. According to the Royal Oak Patch, the cost is estimated at $400,000 and will link together eight city facilities and nine school buildings. According to the article:

“We are spending money now to save money long term,” said Manager of Information Systems Scott Newman.  “The new network will be much quicker, more reliable, have increased capacity, and cost the City less to operate.”

The cost of the project is being split between the City and the School District.  The School District will own and operate the network, and the City will have dedicated fiber for its share of the network’s capacity.  Construction is scheduled to begin this summer, and is planned to be completed this fall.

Update: We contacted Shawn Lewis-Larkin, Superintendent at Royal Oak Schools, for more detail on the project. He replied via email:

We obtained a price from a vendor for meeting the needs we have without constructing our own fiber network.  For 60 months the cost was going to be $775,656

vs.

Our 5 Year Cost to build and operate our cooperative network with the City will be $205,192.

Savings for Royal Oak Schools:  $570,463 Over 60 Months or yearly savings of $114,092

We are still amazed when public schools report such incredible savings, even though we encounter these savings on a regular basis.

Extensive Fiber Route Snaking Its Way Across Michigan

The nonprofit Merit Network, Inc., of Michigan, started in 1966 as a way to provide networking help to the state's research and educational facilities across the state. Over the years, the organization has kept up with the times and is now spearheading the Rural, Education, Anchor, Community and Healthcare - Michigan Middle Mile Collaborative (REACH-3MC II) project.

The project will bring connectivity to community anchor institutions and underserved rural communities in the Upper and Lower Peninsulas. The exentive fiber project is funded with two Broadband Technologies Opportunities Program (BTOP) grants totaling $103.2 million. When completed, Upper and Lower Michigan will house an additional 2,287 miles of fiber.

Matt Roush recently reported on the project, which is well underway in Monroe County in the southern part of the state. Roush brought news about installation of telecommunications huts, an early step in expanding the network into northern Michigican. From the article:

REACH-3MC will connect 105 community anchor institutions as the network is built and will pass 900 more over time. Led by Merit Network, REACH-3MC includes sub-recipients from the private sector to make broadband readily available to households and businesses that lack adequate service options in the 52 counties that make up the project service area.

For more details on the project, including a map of the proposed routes, follow this link to a PDF of the project overview.

 

Tornado Destroys Homes, Cable Companies Charge Homeowners

When a tornado rips your town apart and destroys your home, should you have to pay extra fees to your cable provider? Of course not. But we continue to see these news stories about massive cable companies ripping off people who are just trying to find the energy to get by day to day.

Last year, we saw reports about Charter Cable telling Alabama tornado victims they had to "find" their cable boxes or pay for them.

According to the friend, Glenda Dillashaw, a Charter representative told her that Spain would need to find his cable box or be charged $212 for its loss.

Fortunately, when Spain followed up with Charter after receiving another bill, the representative told him not to worry about it, suggesting that either Charter has an ambiguous policy to deal with it or Spain found a customer support person who's heart had not yet been crushed by soul-numbing job of being a customer support representative for a massive cable company.

At least one other company has a formal policy in place for these situations:

Bright House Networks, whose service area includes hard-hit Pratt City, also expects its customers to file claims under homeowners' or renters' insurance to pay for lost or destroyed cable boxes. "That's how we normally handle it," spokesman Robert L. Smith said.

Fascinatingly, an article in Michigan claims Comcast does not have a policy in place for these situations. Following recent tornados in Michigan, Comcast customers who lost their homes were given the option of paying a cancellation fee or paying a reduced "vacation" rate for a service they could not use.

Comcast Logo

Katherine Pfeiffer and Kathy Crawford soon found that residents were being told that they would be responsible for damaged or lost cable boxes and modems.

Initially residents were told their accounts with Comcast would be put on “vacation” status, where a monthly fee of between $15 and $20 would be charged.

Comcast is supposedly "working on a solution" for these people.

The hubris of this massive companies is unreal. People who are waiting to hear if their home is repairable or has to be destroyed should not be confronted by the cable company with exorbitant fees. The subject should, quite literally, be the last thing on their minds. Local businesses understand this, big absentee cable companies do not.

The big cable providers exist because they have market power, which limits competition, leaving people with few options. Comcast does not compete on the basis of good customer service, it competes on the basis of being the only local alternative to satellite video, which is plagued by its own problems.

Disasters are one of the many times when the difference between local companies and absentee companies becomes most visible. Ironically, it is the big cable companies who are best poised to simply write off the damage of natural disasters -- but they refuse to do so, choosing instead to make the lives of storm victims that much worse.

Community networks provide an alternative. They are a cooperative part of the community, not a leech upon it.

Update: I spoke to a local private company I hold in high esteem that saw a number of its customers hit by horrible floods a few years back and they confirmed that they do not charge customers who are devastated by events out of their control. Like us, they have a low opinion of those who would charge. Also interesting: they have insurance to deal with such situations rather than expecting the victims to cover it with homeowner policies. Score another point for local ownership.

Michigan's Failed Deregulation of Cable After 5 Years

Five years ago, Michigan decided to deregulate cable companies, preempting local authority to negotiate with cable companies in favor of a more relaxed statewide franchise. Many states have gone down this path in hopes of spurring competition and lowering the prices for service. All have seen very minimal gains (mostly from AT&T U-Verse and Verizon FiOS, deployments that have gone forward as well in states that did not preempt local authority). None have seen real decreases in prices.

Michigan also created greater hurdles for the public sector (click on Michigan on our Community Broadband Preemption Map for an explanation of the legislation). In short, Michigan made a big bet that the private sector would build the networks they need to remain competitive. The results are in.

"No matter how you look at it, 70 percent of Michigan's communities still have only one cable provider four years after deregulation," said Deborah Guthrie, President of MI-NATOA, in a statement. "Even in the places where two providers offer service, if serious competition existed, prices wouldn't run up several times faster than inflation and customer service wouldn't be so poor."

Michigan's National Association of Telecommunications Officers and Administrators joined with the Michigan Alliance for Community Media (neither of which seems to have much a web presence) to note that Comcast's prices for lifeline basic have gone up 18% with other services increasing 3x the rate of inflation. Most communities remain stuck with Comcast or Charter solely, two of the most hated corporations in America.

As we educate legislators around the country, we need to keep the lessons from Michigan in mind. Legislators often know very little about telecom issues and are bombarded by lobbyist talking points - but examples like Michigan clearly show what happen when the telco and cableco lobbyists make policy.

And so long as we are discussing Michigan, it is worth noting that the City of Detroit is pushing to have Michigan's statewide franchise law invalidated. Below you'll see the pdf of Detroit's recent motion for summary judgment, offering background for those who are interested.

Statewide Video Franchising: Bad for Communities

Folks who are mostly interested in broadband are probably unfamiliar with video franchising laws. Many people still apparently believe that cable companies are able to get exclusive franchises from the city (granting them a monopoly on providing cable television). However, that is not true and has not been true for many years.

Most cable companies still have a de facto monopoly because it is extremely difficult to overbuild an existing cable company - the incumbent has most of the advantages and building a citywide network is extremely expensive. This is not a naturally competitive market; it is actually a natural monopoly.

However, most people want a choice in providers (something that goes beyond a single cable company and a satellite option or two depending on whether you rent/own and your geographic location. In talking with many local officials and the National Association of Telecommunications Officers and Advisers (NATOA), it seems that almost every local government wants more competition in its community too.

This is where telephone and cable company lobbyists have stepped in - more successfully at the state level than at the federal level. They have convinced legislators that the barrier to more competition is local authority over the franchise (the rules a company agrees to in return for the right to use the community's Right-of-Way in deploying their network). These rules include red-line prohibition (you cannot refuse to serve poor neighborhoods), an affordable "basic" tier of service, local public access channels, broadband connections at public buildings, etc.

Some states have listened to the lobbyists and enacted statewide franchising - where local communities are stripped of the authority to manage their Right-of-Way and companies can offer video services anywhere in the state by getting a state franchise from the state government. Every year, we gather more data that this practice has hurt communities, raised prices, and barely spurred any competition. Most of the competition it is credited with spurring came from Verizon's FiOS deployments, which would have occurred regardless of state-wide franchise enactment.

This touches directly on broadband because the statewide franchises often give greater power to companies like Verizon to cherry-pick who gets next generation broadband. Wealthier neighborhoods will increasingly get access to faster networks as private companies are allowed to cherry pick. This practice not only leaves poorer parts of town behind, it makes them even harder to serve when those areas cannot be balanced with higher-revenue sections producing sections of town (who already have service).

Recently, this issue resurfaced with new evidence that state-wide franchising was little more than a giveaway to private companies who are increasingly profits at the expense of communities who still have no choice in providers.

Both Phillip Dampier at Stop the Cap and Karl Bode at DSLReports have deeply linked posts on this matter that cover Michigan, Tennessee, and Wisconsin. Stop the Cap also delves into how Comcast spends in millions lobbying - you didn't think we get hit for rate increases every year for nothing, did you?

The Detroit Free Press ran Brian Dickerson's "With Regulation like this, who needs Monopoly?"

Now, three years after AT&T's champions in the Legislature crowed that Comcast's reign as the 800-pound. guerrilla of Michigan cable service was over, Comcast remains the state's dominant provider, maintains a de facto wire-line monopoly in most its franchise areas, charges higher rates for basic cable service, and has far fewer legal obligations to the subscribers and communities it serves.

What most of this comes down to is accountability. Local governments are accountable to the citizens. Companies like Comcast and AT&T are accountable to their shareholders. There is no perfect arrangement, but I would err on the side of a network being accountable to the community.

Photo courtesy of photocamp.