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Op-Ed: Baltimore Makes Smart Move with Fiber Investment

On November 25, the Baltimore Sun ran this opinion piece by me regarding Baltimore's approach to expanding Internet access in the city.

Baltimore Mayor Stephanie Rawlings-Blake recently spoke the plain truth: “You can’t grow jobs with slow Internet.”

This simple statement is the best explanation for why Baltimore is examining how it can use existing City assets and smart investments in the near future to expand access to fast, affordable, and reliable Internet access. It is also a slap across Comcast’s face.

The big cable and telephone companies have insisted for years that they already deliver the services residents and businesses need. But they also claim to offer reasonable prices that just happen to increase year after year with few customers having other options to choose from.

Baltimore’s reality is that Comcast does indeed offer speeds that are faster than many in rural Maryland can access. But they are not even in the same league as cities like Chattanooga, where every address in the community has access to the fastest speeds available anywhere in the nation, and at some of the lowest prices. There, as in hundreds of communities across the country, the local government built its own next-generation network.

Whenever a city announces the possibility of investing in a network, the cable industry public relations machine kicks into high gear. They argue that we have a plethora of choices for Internet access. The sleight of hand behind this claim is to include LTE wireless networks as a replacement for cable – something almost no household does because replacing your home wired connection with LTE will break your budget. According to bandwidth-management firm Sandvine, the average household uses more than 50 gigabytes of data each month. Between the data caps and overage fees from AT&T, that will cost over $500/month.

Meanwhile, the overwhelming majority of community owned networks are doing exactly what they intended – breaking even financially while providing a valuable public service. Big cable companies argue that these networks have failed if they aren’t making big profits each year, a misunderstanding of public accounting. Community owned networks aim to break even, not make a profit.

When Windom, Minnesota, ended a year with a $50,000 deficit from a network that kept many local jobs in the community, few complained. Ask any local government official what is more important: 10 jobs or $50,000 in the general fund. No contest, especially when the accounting does not include the tens of thousands saved by a local government that no longer has to lease expensive voice and data connections for schools and municipal facilities.

Chattanooga is often cited out as the most successful municipal network after becoming the first US city with universal gigabit access and having helped created 6,000 jobs. But Thomasville, Georgia, and Spanish Fork, Utah, have operated networks for over a decade and generate more than a million dollars each year for the general fund from the telecommunications net income.

However, a few community owned networks have failed, just as thousands of privately owned telecommunications companies have disappeared or declared bankruptcy in a very difficult business. Provo is a favorite of the cable lobbyists, who generally neglect to note that it had to compete with one hand tied behind its back due to Utah state laws pushed by Comcast and US West (now CenturyLink). Some 19 states have created special barriers to discourage publicly owned networks.

Let’s be clear, very few expect Baltimore to suddenly build a citywide fiber optic network offering residential services in competition with Comcast.

Baltimore will likely take another path, expanding the fiber-optic network it already owns to better benefit community anchor institutions, local businesses, and potentially even residents. This is a very low-risk approach similar to what Seattle has done for years. Now Seattle has a partnership with a company called Gigabit Squared that is building a gigabit network out to tens of thousands of households.

None of these successes mean local governments should rush unprepared into a network investment. Nor should they be scared off by cable lobbyists trying to preserve what is effectively a monopoly. Building a successful network is a challenge, but so is trying to grow an economy while relying on yesterday’s technology at artificially inflated rates.

Cedar Falls Shows Long Term Muni Network Success: Community Broadband Bits Episode #75

Cedar Falls Utilities operates one of the oldest community owned networks in the nation. It started as a cable network in the 90's, upgraded to FTTH recently, and this year began offering the first citywide gigabit service in Iowa. CFU Communication Sales Manager Kent Halder and Network Services Manager Rob Houlihan join me for Community Broadband Bits podcast 75.

We discuss why Cedar Falls Utilities decided to add cable to their lineup originally and how it has achieved the incrediblely high take rates it maintains.

We also discuss the importance of reliability for municipal network and why they decided to transition directly to a FTTH plant rather than just upgraded to DOCSIS 3 on their cable system. Finally, we discuss its expansion into the rural areas just outside of town.

Read all of our coverage of Cedar Falls on MuniNetworks.org.

Read the transcript of our discussion here.

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 Haggard Beat for the music, licensed using Creative Commons.

Billy Ray on the Origins of the First Muni Broadband Network: Community Broadband Bits Episode #74

Last month, we unveiled a video teaser of our interviews in Glasgow, Kentucky over the summer regarding its municipal broadband network. This week our podcast features a few clips from those interviews with Billy Ray, the Superintendent of Glasgow's Electric Plant Board.

He offers more context on the history of their network, including how they became "savvy marketers" when faced with stiff competition from Telescripts - a cable company that cared nothing for Glasgow until they dared to build a rival system operated for community benefit.

He details how they began producing local content and the surprisingly most popular show they developed - what would eventually come to be known as "reality TV."

We thank Media Working Group, our partners in this documentary for the high quality interviews.

Read the transcript from this episode here.

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 10 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 Haggard Beat for the music, licensed using Creative Commons.

New Comic: Longmont Fiber Crushes Comcast's Cable Outhouse

Longmont Power and Communications, a city-owned utility north of Denver in Colorado, is slowly rolling out a FTTH network to local businesses and residents that are in close proximity to its existing fiber loop. They are offering a symmetrical gigabit of Internet access for just $50/month.

Longmont Fiber Comic Strip

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The local newspaper notes that some local businesses have already signed on, including a clinic:

Jurey said the city's network is three times faster than the speeds the clinic got before at a cost savings of $1,600 a month.

On November 5, citizens will decide a referendum on whether to expedite the building by issuing revenue bonds without increasing local taxes. A brochure explaining pro and con is available here [pdf]. Approving the bonds means building the network to everyone in a few years while not approving it will mean building the network over several decades.

We recently did a podcast with Longmont Power and Communications Broadband Services Manager Vince Jordan and a local citizen campaigning for the referendum. Listen to that show here.

Read the rest of our coverage about Longmont here.

Billy Ray on the Origins of the First Muni Broadband Network

During the summer, I spent two days in Glasgow, Kentucky, to learn about the first municipal broadband network in the country. I believe it also became the first community in the US to have broadband access available universally within the town.

Working with the Media Working Group, we recorded several interviews with people there, including a lot of time with Electric Power Board Superintendent Billy Ray. Billy Ray has been a key proponent of local self-reliance and a pioneeer of community owned networks.

Below, we pulled out a few snippets of our interview talking about the origins of the Glasgow network. All of our stories about Glasgow are available here.

Video: 

Television Consumer Freedom Act Promises More Choices

On August 14th, Christopher Mitchell and I visited Senator Amy Kobuchar's office in Minneapolis. We arranged the meeting in coordination with Free Press and the Media Action Grassroots Network to talk with our Senator about the Television Consumer Freedom Act, also known as S.912.

Senators John McCain (R-AZ) and Richard Blumenthal (D-CT) are sponsoring this effort to scale back cable program bundling. ILSR and the Free Press recognize this as a good start to reforming our deeply flawed video market. We also see it as a foothold to inching closer to the wide ranging and affordable broadband we desperately need.

We met with Senate staff to present 594 Minnesota petition signatures in support of the legislation. Free Press has collected over 27,000 signatures from across the country asking Congress to pass the Television Consumer Freedom Act.

The bill provides options for consumers beyond today's restrictive bundled services. By offering channels a la carte, consumers can pay for what they want rather than being forced to pay for many channels they do not. Bundling also limits independent channels by crowding out capacity and creating onerous financial barriers for entrepreneurial media ventures. This bill will not eliminate bundling, but will require cable providers to also offer a la carte pricing. It is important to note that the cable companies themselves are often forced to bundle by channel owners like Viacom or Disney. This bill restricts that practice as well.

We also give two thumbs up for the sports fans' provision in the bill. From an LA Times opinion piece written by Senator McCain:

Another provision in the bill seeks to end the practice of sports team owners punishing fans by blacking out home games that don't sell out. It provides that games taking place in publicly financed stadiums can't be blacked out.

For an in-depth analysis of S.912's provisions, read Combating the Cable Cabal, from the Free Press.

Contact your elected officials through the Free Press call to action page or contact them directly. Elected officials respond best to visits, phone calls, and brief personalized emails. Let them know you want their support for S.912, the Television Consumers Freedom Act.

We Need Video Reform, Let D.C. Know What You Think

Time Warner Cable subscribers across the country who enjoy CBS programming are out of luck. The two media giants have reached an impasse in their fight over retransmission consent so several major markets are now missing out. CBS has also taken the fight one step farther, blocking TWC broadband subscribers from accessing CBS.com video content.

Public Knowledge as launched a campaign to end this viewer lock-out. From their recent call to action:

It doesn't matter whether CBS or Time Warner Cable is the bad guy here. The only one losing here is you, the viewer.

Some members of Congress are standing up to the media giants. The bipartisan "Television Consumer Freedom Act," [PDF] co-sponsored by Senators John McCain and Richard Blumenthal, takes the first steps at fixing this mess.

But an army of special interest lobbyists likes things the way they are, and they don't care that you are caught in the middle. For this bill to move forward, your members of Congress need to hear from you.

For more detail on how we got here, read Harold Feld's recent Policy Blog on the PK website. PK makes it easy for you to inform your D.C. represenation that you want video reform. 

You can also look up your U.S. Representatives and your U.S. Senators to contact them directly via phone or email.

Jim Baller Discusses Municipal Broadband History - Community Broadband Bits Episode #57

Jim Baller has been helping local governments to build community owned networks for as long as they have been building them. He is the President of and Senior Principal of the Baller Herbst Law Group in Washington, DC. Jim joins us for Episode #57 of the Community Broadband Bits podcast to discuss some of the history of community owned networks.

Jim has a wealth of experience and helped in many of the most notable legal battles, including Bristol Virginia Utilities and Lafayette.

We start by noting some of the motivations of municipal electric utilities and how they were originally formed starting in the late 19th century. But we spend the bulk of our time in this show focusing on legal fights in the 90's and early 2000's over whether states could preempt local authority to build networks.

In our next interview with Jim, we'll pick up where we left off. If you have any specific thoughts or questions we should cover when we come back to this historical topic, leave them in the comments below or email us.

You can learn more about Jim Baller on his website at Baller.com.

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 30 minutes long and can be played below on this page or subscribe via iTunes or via the tool of your choice using this feed. Search for us in iTunes and leave a positive comment!

Listen to previous episodes here. You can can download this Mp3 file directly from here.

Thanks to Break the Bans for the music, licensed using Creative Commons.

TV Everywhere in Tullahoma, Tennessee

Tullahoma's network, LighTUBe, continues to bring new services to residents and business customers, including smart metering and gig service. LighTUBe has increased Internet speeds without raising rates five times since 2008. Now, LighTUBe offers 'TV Everywhere' to subscribers.

The Tullahoma New reports:

TV Everywhere allows customers to watch content on mobile devices such as iPads and smartphones, according to communications specialist Chelsea Adams.

“What’s even better is that there is no additional cost to LightTUBe customers for using this service,” she said.

To sign up for the TV Everywhere option, LightTUBe customers should log into the TV Everywhere website at www.watchtveverywhere.com, register as a user with information provided on their monthly LightTUBe statement, and an activation link will be emailed to them.

Additionally, LightTUBe customers can register up to four user accounts to use with their TV Everywhere accounts, according to Adams.

You can listen to the story behind LighTUBe in Episode #54 of the Community Broadband Bits podcast. Chris interviewed Brian Skelton, General Manager of the Tullahoma Utilities Board, about the network and the benefits it brings to the community.

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.

google-gig.png

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.