geoff daily

My friend, Geoff Daily at App-Rising.com, has questioned the wisdom of running fiber to all anchor institutions.

There's been a lot of buzz around the benefits and relative viability of wiring all community anchor institutions (schools, libraries, hospitals, etc.) with fiber as the way to get the best bang for the broadband buck. But recent conversations with my fiber-deploying friends have led me to worry that doing this could be a big mistake.

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The reason is simple: if you build a network to serve community anchors, then those institutions won't be available to serve as anchor customers for a community-wide deployment. Without those community anchors as customers, the economics of deployment, especially in rural areas, becomes much harder and may actually make robust, sustainable broadband impossible in some areas.

This is a question I have wrestled with also, in trying to help communities understand the real impacts of decisions they make on whether to build their own broadband network.

My first reaction is on philosophical grounds - public institutions like schools, police departments, etc., do not exist to prop-up the business models of cable or telephone companies. Large entities like municipal and county governments should own their own network because it will save them money and expand their capabilities. When will the tea-party protesters start protesting government paying exorbitant fees to telephone companies for slow T-1 lines and the like? After all, these are our tax dollars and they should be spent wisely.

My second reaction is that I seriously doubt removing these institutional networks will impact the business model significantly. Maybe it would have last decade, but now we know that Comcast and probably many more have ">massive margins in their broadband operations. Losing the libraries and schools will do little to their bottom lines. Even if it takes a bit out of their profits, they won't go missing meals.

But really, the answer is more complicated. Many municipalities already get "free" services from their cable company as a part of the video franchise. To gain access to the right-of-way, cable companies have often given "free" (meaning paid for by the subscriber base) services via an I-Net. Though this has been helpful for communities it was never a particularly fair, efficient, or rational means of solving connectivity issues for local governments.

It wasn't fair because cable subscribers paid for the costs of local government that should be paid by all citizens. It wasn't efficient because cable companies often did not live up their responsibilities or franchises did not require modernization of networks over the many years of the agreement. And it wasn't rational because neither entity had an incentive to build the kind of network local governments need to do their jobs effectively.

But the right-of-way is a valuable asset and communities should have the freedom to negotiate access to it as they choose. Those choices are also constrained by what state and federal laws allow (I said this was complicated, right?)

So - getting back to the question of whether building fiber to these public buildings is a good idea or not, I say it absolutely is ... if it is locally owned and the local community is responsible for it.

In the unlikely event that such a network causes private companies to cease investing in the community (though continue refusing to invest in the community is likely a more accurate description), the community should take initiative to build the last-mile networks necessary for future vitality.

Either this is an essential infrastructure or it isn't. If it is, local governments must take a stronger role in ensuring everyone has access. If it isn't essential, then we can continue watching private companies deploy networks wherever they decide it is profitable.

Update: In an attempt to be more clear, I will say that I think federal policy should make it a priority to make funding available (loans where possible, mixing in grants where absolutely necessary) so that local communities can connect their anchors. Local ownership is paramount. Statewide networks are a poor approach in that it would de facto prevent communities from building their own networks.

I don't think these networks will interfere with business plans of those private companies who have already made investments - but I also don't think this should be a major concern because local government's mission is to serve the needs of the community, not those of absentee-owned cable or telephone companies. To the extent that people in the community need better networks, local government must be ready to step in -- just as they do with roads, water treatment plants, and other elements of infrastructure.

I have been digesting the NOFA (the rules for broadband stimulus projects) and I am stunned at just how much I disagree with them. I think the National Telecommunications and Information Administration, a branch of the Department of Commerce in D.C., and the Rural Utilities Service have really done a disservice to this country.

Before I highlight some commentaries that I have found most interesting thus far, I want to note that this is why we take a bottom-up approach. In talking to many people working on community networks, most everyone is frustrated and the rest are really angry. It sure seemed like the feds were heading in the right direction, but the broadband stimulus rules show just how out of touch they are. We advise communities to find ways of being self-reliant. If they are able to get help from D.C., that is great; but they should never depend upon it.

We will have some more details of our reaction to the rules soon, but for now I wanted to highlight some of the folks that reacted quickly and offered interesting thoughts.

Starting on the positive side, Andrew Cohill at Design Nine thinks the encouragement for open access networks and transparency could ultimately be the defining characteristic.

This means networks that offer competitive pricing from more than one provider get preference--this is huge, and could have important long term consequences.

The rules also do something else quite important on the same page (page 66, line 1463), where there is explicit preference for open access transport, which in telecom jargon is "interconnection." The rules say that companies that post their interconnection fees publicly and agree to nondiscrimination will get preference.

If he is correct, the implications are great. However, the rules certainly could have demanded open access as a condition of public money being used rather than a limited form of extra credit for those who will encourage competition in a market suffering the utter lack of it.

Harold Feld, who rightly noted that good people struggled and worked on this, saw both positives and negatives in the rules. He defends the "broadband" speed definition from the FCC (768kbps down and 200kbps up):

I am in the minority in thinking they played this right. There are too many good projects potentially excluded by allowing only speeds of 45 mbps or better (what the House originally proposed). I dislike relying on advertised speed rather than actual speed, but that problem needs to be addressed globally because trying to enforce it here is too damn difficult.

I disagree with Harold on this, but I wanted to include it because few are more insightful and deeper thinkers on these issues. I am afraid that in 2010, we will be the only country subsidizing the private buildout of 1995-era "broadband" technology. However, Harold absolutely nailed the biggest winner from the rules:

Big Cablecos. No possible competitors and never wanted to expand into low return areas anyway. On policy, if my prediction is right, they will benefit from special access reform but TV Anywhere is now a “managed service” they can prioritize over other video traffic.

I think Geoff Daily captured my sentiments pretty closely with a post critical of the speed definition

I have to admit being totally flabbergasted by their claims that this definition "facilitates the use of many currently common broadband applications" and yet they completely ignore entire classes of "currently common broadband apps" like two-way videocalls, uploading video to YouTube, remote computer backups, webcasting video out to the world, P2P applications, and more. They're basically saying that their definition's adequate because the Internet's primarily a one-way medium. Has no one been paying attention to what's been happening on the Internet over the last 5 years?!

I was just working with a co-worker stuck on slow DSL that could not even stream video because the connection was too slow. Simply put, a 768kbps true connection is hardly broadband. A 768kbps advertised connection, which delivers considerably less, is an insult to broadband. To those who might argue that it is better than dial-up, Geoff is right to consider the long term implications - something he and I have discussed previously on our vidchats.

So regardless of whether or not you think 768/200 is adequate today, what about in 2019? Because the reality is that whatever networks we subsidize today is likely all these rural communities are going to have until we subsidize them again. So by setting the bar too low we're essentially cementing underserved communities to permanent underserved status.

Further, this definition could have the insidious effect of encouraging more false advertising from network owners (reminding me that I yesterday received a flyer from Qwest touting their "fiber-optic fast" offerings despite it really being a pathetic DSL connection unable to even offer 1Mbps upstream under the best conditions).

Notice how they specifically cite "advertised speed" rather than actual. This is bad on multiple fronts. It rewards gamesmanship when it comes to how much speed a network says it can deliver vs. what it can actually deliver. As there are additional points granted to networks that can offer higher speeds, there's now an incentive to over-promise and no penalties for under-delivering.

I asked a number of network builders and community leaders who were considering projects to react to the NOFA and most everyone is tremendously disappointed. One noted that if Obama wants to compare himself to FDR, he will have to do much better. If FDR acted like Obama, people in rural areas would be drowning in tiny pieces of wood while the federal government continued to subsidize matchstick producers rather than building electrical lines.

One could go on - if the Eisenhower Administration were populated with these folks, we would have many more dirt roads connecting everyone rather than the Interstate Highways that boosted the country's economy.

But the question is not how snarky we can be - something my generation certainly excels at - but what we can do next. As Eric Lampland noted to me, "we move on." There is certainly nothing in this that prevents communities from building the networks they need. In fact, I just found out that Lake County, MN, is working with National Public Broadband, a new nonprofit organization, to access RUS funds outside of the stimulus package to build a network.

The moral is, as always, TANSTAAFL - There Ain't No Such Thing As A Free Lunch. The broadband stimulus rules are a letdown, but will not stop communities determined to succeed in the 21st century.

Anyone who tells you that UTOPIA is a "success" or that it is a "failure" is probably minimizing important problems or victories for the network. The Utah Telecommunication Open Infrastructure Agency, like so many other things in life, is a mixed bag.

For those new to UTOPIA, it is a large multi-community full fiber network that operates by only selling wholesale access to service providers. Due to a law designed to protect incumbent service providers under the guise of protecting taxpayers, UTOPIA cannot offer any services itself and is strictly open access.

For a variety of reasons - that have not and likely will not be repeated by other communities - the network has not yet met expectations. The costs have been greater than expected and the network does not yet cover its entire intended territory (some 16 communities and 140,000 people).

However, where it does operate, it is blazing fast. The service providers offer the fastest speeds at the lowest prices (see a service comparison). It has offered a tremendous competitive advantage to the businesses and communities in which it operates.

Last year, Lawrence Kingsley wrote "The Rebirth of UTOPIA" that explored where the network went wrong and how it has also succeeded. Perhaps most notably, he notes that the churn rate (people switching to other networks) is ridiculously low at .5% - a common trait to community owned networks.

Last month, Geoff Daily reported on how UTOPIA is "Transforming Failure Into Success." They have greatly improved their marketing practices - which has historically been a large barrier to success. This is an important lesson for all - even though there are very few competitors in the broadband market, they do fight fiercely for subscribers. Broadband is competitive like boxing, not like a marathon.

But the news coming out of Utah is not all cheery. Jesse, the resident UTOPIA expert, has recently explained some of the current financial problems and their origin.

Perhaps the most important lesson to take away from UTOPIA is that plans always go awry. I have yet to find a community that did not have unexpected problems along the way to building their networks. Communities that take responsibility for their digital future must be prepared to solve problems as they arise - but what else is new?

As muninetworks.org grows, you will find a lot of material and details about different topics by exploring the tags. Stories displayed on the front page are the tip of the iceberg. For instance, the UTOPIA tag lists more resources we have collected.

Geoff Daily and Christopher Mitchell discuss municipal networks and why communities should own their own networks.