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Transcript: Open Access and Incumbent Challenges Podcast Episode 128

Thanks to Jeff Hoel for providing the transcript for Episode 128 of the Community Broadband Bits podcast with Eric Lampland of Lookout Point Communications. Listen to this episode here.

00:05:

Eric Lampland: But the monopoly is created by the physical infrastructure ...

00:08:

Chris Mitchell: Exactly.

00:08:

Eric: ... of those particular things, and so, yes, that does need to be replaced.

00:15:

Lisa Gonzalez: Hello. You are listening to the Community Broadband Bits Podcast, from the Institute for Local Self-Reliance. My name is Lisa Gonzalez.

In episode 80 of the podcast, we introduced you to Eric Lampland, Founder and Principal Consultant at Lookout Point Communications. In that episode, Chris and Eric discussed indirect cost savings from municipal networks. This week, Eric stopped by our Minneapolis office for a discussion about "open access," today and in the future. We find that many of the communities we study that deploy or consider municipal broadband networks see an open access arrangement as the preferred business model. Traditionally, this would mean that the municipality would provide the infrastructure and providers would offer commercial or residential services to customers over the infrastructure. We also find that a large percentage of those communities find it difficult to implement this model. In our conversation, we dig into some common challenges associated with municipal open access networks. We also talk about some possible cures, and we look at how the very definition of the term "open access" is changing.

Every week, we bring you the Community Broadband Bits Podcast advertisement-free. Please consider contributing in any amount to help us in carrying on this service. Just visit ILSR.org and click on the orange "donate" button.

01:38:

Chris Mitchell: Welcome to another edition of the Community Broadband Bits Podcast. I'm Chris Mitchell. Today, I'm in the office with Lisa Gonzalez.

01:47:

Lisa: Hey there.

01:47:

Chris: And we've got Eric Lampland back, the Founder and Principal Consultant for Lookout Point Communications.

01:53:

Eric: It's good to be here with you, Chris.

01:55:

Chris: Thank you for coming back in, Eric. We had a great conversation about two weeks ago, and I fouled up the recording. So we're going to attempt to recreate that. And I really appreciate your patience, and coming back in to, once again, discuss "open access" with me.

02:10:

Eric: We've discussed open access, I think, for about ten years, so doing this a couple of times is not an issue.

02:16:

Chris: Yes. We've been talking about it a long time. It's been a passion of yours, which is why I wanted to have you in here. And you've worked with a number of communities that have, I think, followed a similar trend that we've seen in the industry, which is that most communities fundamentally would prefer to build the infrastructure but not engage in the service competition with a Comcast or an AT&T or someone like that. Even through most cities would prefer not to engage in that level of competition, we find that most cities ultimately DO end up engaging in that level of competition. I was hoping that you would help us to sort that out a little bit. Why is it that cities that would prefer open access ultimately often find they can't make it work?

02:55:

Eric: I think the simple reason is that it's very difficult to get legacy providers to operate their services across other people's infrastructures. And so there hasn't been an option not to produce your own retail services.

03:13:

Chris: So, you and I are in St. Paul. And if St. Paul built a fiber optic network -- in this mythical future where we have a mayor that cares about the future of our community --

03:25:

[laughter]

03:26:

Chris: not that I feel personally about this -- what you're identifying as the problem is that the -- Comcast and Centurylink would refuse to use a fiber optic network that was even superior to what they had in the ground. They're the legacy providers that you're identifying.

03:43:

Eric: Right. Well, the intention, the old business model for service providers is a simple one, and that is that they own the customer by owning the connection to the home or to the business. And when you take that business model, and you take away the connection, that doesn't reflect well on the way they've set their business models.

04:02:

Chris: So, when you're talking about the legacy providers, you're talking about Comcast and Centurylink. And they just don't have an interest in using an even superior fiber optic network a city may build.

04:14:

Eric: They have an interest in using a superior fiber optic network, if they built it.

04:20:

Chris: Right.

04:20:

Eric: But they don't have an interest in using somebody else's.

04:24:

Chris: Right. And I think one of the reasons for that is, these are companies that are fundamentally built on a business model that was not one that was existing in a competitive environment. And that, frankly, it would be difficult for them to suddenly change tens of thousands of employees to be operating in a competitive environment.

04:42:

Eric: I don't want to speak directly to why -- to what the change would be for legacy providers, because I don't think they know it. I think it's rather simply that they're comfortable doing what they do.

04:57:

Chris: Um hum.

04:57:

Eric: And they're not comfortable entering into a different monetization approach which they do not understand.

05:06:

Chris: The result of that is -- regardless of what their reasons are, and I think you're absolutely correct, that they probably don't even know -- I mean, I'm always worried about giving too much agency to massive bureaucratic organizations.

05:17:

Eric: Right.

05:17:

Chris: They're -- they don't have cohesive set of interests. They have competing interests that are fighting within their own bureaucracy. So, let's leave that to the side. And let's look at what that means for a city, then. So, a city that wants to build this network, because they know that the legacy operators won't operate on it -- I think that changes the approach that a city can use. You can't just go out and borrow $100 million -- or $300 million if you're a big city -- to build a network if you are not going to have significant buy-in from the legacy operators and you want to use an open access system. Is that right?

05:51:

Eric: Well, that is correct. There are actually multiple models in which a municipality can pay for a fiber infrastructure today

05:59:

Chris: OK.

05:59:

Eric: One of those models -- and the traditional approach -- is to pay for them out of retail services. And within that model, and as a subset of that model, open access has been thought to solve certain other kinds of political problems.

06:17:

Chris: OK, so we have -- now, this is open access as a solution to a political problem.

06:23:

Eric: Correct.

06:23:

Chris: What is that political problem?

06:24:

Eric: The political problem is that many governments do not feel that they are in a position to compete with the private sector. And that they would like to enable the private sector. It's interesting that in this particular section of the economy, that particular point of view is maintained, whereas in other sectors of the economy, we've passed that view. There was a long time ago when sewer systems were private, when electrical systems were completely, you know, individually competitive.

07:00:

Chris: Um hum.

07:00:

Eric: And we can look back on, you know, even roadways that do that type of thing. But the truth is that we as a society have moved forward to a point where cities are very comfortable in providing roads and sewers and water and so forth and so on. But in this sector, they have not yet made that transition.

07:21:

Chris: Right. And I think it remains to be seen whether we'll live in a future where, 10-15 years down the road, we'll have a monopoly regime, saying -- recognizing that fiber optic networks are a natural monopoly, and that there is no real viable way to have competition when you have private ownership or -- this or that. I, frankly, don't actually think we're going to get there, for broadband and Internet-type services. But I think it's an interesting conversation. But one thing I want to note is that even we've started on how open access is very difficult, we have seen cities that have figured out ways of moving forward with it. We've seen Danville. We've seen Palm Coast. FastRoads. There's all those public utility districts in Washington state. Many of them have built in an incremental-type fashion. The Washington state ones have not found a way, in all cases, of paying down their debt. And many of those have wholesale power sources of revenue. So they have extra money floating around. And they're used to cross-subsidizing for, you know, sewer. So they may not have an issue with building some of this infrastructure.

But in places that absolutely want the network to pay for itself -- where you want only the revenues of the network to pay for the costs of having built the network -- it seems like the most viable model has been this slow, incremental expansion.

08:45:

Eric: Well, I'm not so sure I agree with that. But -- And I think that there's something that's important that's implied in your comment. And that is, what is the definition of "open access"? In the cases of Danville and various different places that you mentioned, the approach to open access has to either do with the selling of components of the physical infrastructure, such as fiber optics -- dark fiber, we call it -- or the allowance of people to use exclusively some part of the infrastructure. That's a very limited view of open access, in my opinion.

09:31:

Chris: So, let me just push this out a little bit. You and I were recently in Salt Lake City.

09:35:

Eric: Yes.

09:35:

Chris: And this is something that I've heard regularly with criticism with regard to UTOPIA, which is an open access network. But, for the most part, you can only buy vanilla from different people. Right? You don't have 31 flavors. You really have, you know, a whole bunch of different companies that are selling one flavor. And I think that's what you're getting at here. Is, you have a different vision for how open access could work -- and, you think, should work.

09:59:

Eric: There are multiple aspects of this. I think the large piece, which I won't address right away, is the perspective of open access as we see it in places around the country now is really an orientation to providers. It is how a provider can use that access to obtain customers. But once obtained, those customers belong to that provider. So it's really a -- it's a bit of the same version of what we have today. The other side of that is a customer-oriented open access, in which the customer has the ability to elect the choice of provider, and may, indeed, have multiple providers at the same location. That is not -- we haven't seen that type of open access yet develop.

10:54:

Chris: But when you say services and providers, what I'm confused about is, you know, in UTOPIA, you have a choice of many different providers.

11:04:

Eric: Right.

11:04:

Chris: Now, they're all selling pretty much the same thing. Now, you question is basically, you know, is, how can we set this up so that those service providers actually have differentiated offerings?

11:15:

Eric: No, what I'm really saying is that, you know, in normal marketplaces that we have -- if you're buying jeans, for example, right? -- you have a lot of people who sell jeans. But they have found ways to differentiate their products -- this jean from that jean -- it might be the design on the back pocket or it might be the fit, however it's so determined. There's no reason in the world that video, for example -- video services, entertainment services -- can't find similar differentiations. And when they find those differentiations, then open access within the video service arena would be something that would probably we welcomed by many people. Today, unfortunately, we still are stuck with the fact that -- in the case that we're making an example of here -- video services -- that video services are thought to have some hundreds of channels, most of which you don't watch, and has a fairly large price, and as long as you have two competitors that are doing exactly the same thing, then you're right, there's no differentiation of service and there's no benefit to the customer or the provider.

So, the notion on services is really kind of twofold when you get into open access. The first is, do we have competitive understandings -- or, do we have differentiated services between providers of a given aspect of service -- such as video, such as voice, such as various kinds of healthcare services and so forth? The second piece of that comes into play in that most people are making conversations about what has traditionally been thought of as communications services. That thing that we call "triple-play" -- voice, video, and data. But in fiber optic networks, we're talking about orders of magnitude in capacity that are greater in fiber than they are in the copper infrastructures of today. And so the types of services that will begin to occur in an open access network are much greater than just voice, video, and data. Certainly, some providers, like Comcast, have actually included things like home security, right? Well, home security is an easy extra service, right?

13:37:

Chris: Um hum.

13:37:

Eric: But healthcare is an easy extra service, right? And if you wanted to do something with your fitbit, you know, wrist, and somebody had a service that amalgamated that with your trainer at the local gym, that would be a different service. Right?

13:56:

Chris: Right. However, what I think -- when I hear you say that, my thought is, well, what you're describing is things that are data.

14:04:

Eric: Hmm.

14:04:

Chris: And so, you know, at home right now, I have Comcast. And I could have a home security system riding over my Comcast connection. And I can do some home-healthcare-type stuff over my Comcast data connection. So how would you vision of open access differ from my idea, which is that I have a data connection and I can do a hundred different things over that?

14:26:

Eric: Well, I think that's kind of interesting that you think of the data connection, OK, as something where you can do hundreds of things over it, but you think of a fiber optic network as where you can only do three things over it. The fact of the matter is, everything we do over networks today is a data connection, whether it's voice, video, or these things that we think of as Internet. Right? If, for example, I had a service that I offered out of my local gym, that was your or my -- preferably me -- physical training activity, and that the service that was offered actually included tracking my physical activity during the course of the day, that brought it back to my trainer at the gym, and so forth and so on. Could I run that as a web-initiated-type service? Well, I could. OK? But when I think, in fact, that I've got a local function here, going through the expense of a web service and a local level may not be the best way to do that service. There may be many alternatives about doing that kind of delivery of service. So, you know, when we think in terms of a web application, we think in terms of a large-scale aggregation of clients; when we think in terms of a local application, we think of a smaller group of clients, with a more focused need. The range of services is much greater than we currently generally think about.

16:00:

Lisa: So, where do you feel that we are in terms of these differentiated services now? I mean, how close are we to getting that type of thing now?

16:09:

Eric: It's emerging rapidly. And it will -- you know, one of the things that you have to be careful about -- that I have to be careful about, and I've been in this business for a long, long time -- and a long, long time ago, we didn't foresee many of the web services that we have available today. And today we would only enjoy the wonder of these emerging services when they actually occur.

16:36:

Lisa: Um hum.

16:36:

Chris: You didn't foresee the Yo app ...

16:39:

[laughter]

16:40:

Eric: I didn't foresee a LOT. But healthcare services, for example, that involve children at schools, your own doctor, the specialist that might service your family or your school, the parents that might get involved, is a very localized healthcare service function that is not a web-type-based orientation. So there are many things that could come forward. Farmers in the field who measure their water in their underground wells to determine what kind of irrigation -- is a local service. It's not something that you do at a national level. Right? Or an international level. So, what the services will specifically be -- and we certainly have good examples of services that are beyond voice, video, and data, OK? -- it's all data. It doesn't make any difference anymore.

17:36:

Chris: Well, let me ask you this: so, right now, one of the drawbacks of what I've been describing, which is thinking of the fact that -- I get a Comcast connection, and I can use that to watch Netflix. Well, it turns out that the way the network's architected, Comcast makes decisions that impact Netflix's ability to deliver me content. And, similarly, if you and I, who -- we live a mile and a half apart from each other -- wanted to have some sort of direct connection to each other, and we're both on Comcast, well, those packets might take this incredible route all the way down to St. Louis, or something like that.

18:11:

Eric: Right.

18:11:

Chris: So, you know, how does that sort of architecture play into the fact that we may want to have a network that's built where we keep more traffic locally, and that sort of thing?

18:24:

Eric: Any decent network architecture attempts to localize as much common traffic as possible. And that's been true in this business for a long, long time. I think I want to pick on your example a little differently, if I can. OK?

18:42:

Chris: You never do what I ask you to ...

18:43:

Eric: I know.

18:45:

[laughter]

18:48:

Eric: It's just the way I am. If you're talking about you and I both having a choice of Comcast, and they're limiting a certain amount of traffic of one kind or another, or the performance is not as good, this is exactly what we want to see in open access. We want to see another company, other than Comcast, be available to the user, to -- who doesn't do that type of limitation. And that is product differentiation -- kind of the standard form we expect in competition. If those two are available on an open access network, Comcast and our hypothetical other company, then we leave it to the customer to make a choice of the product he chooses to buy.

19:38:

Chris: Um hum.

19:38:

Eric: And thereby, the kinds of behaviors that we see today in legacy providers, it will be their own incentive not to do so -- not to create bad behavior. OK?

19:51:

Chris: Um hum.

19:51:

Eric: Because they'll lose customers if they do.

19:53:

Chris: Right. if they have the choice. Now, I think one of the next questions, though, is, if we have this open access network, but it's been built basically copying a Comcast-style architecture, because someone like me says, you know what, we really need gigabit Internet access, and let's build this network so that we have gigabit Internet access, right? We're going to offer one service: Internet. Right? Which is how, I think, a lot of people think about it.

20:21:

Eric: Right.

20:21:

Chris: How do design choices that we make in building that network, regardless of whether it's open access, if we just see it as being a one-service network -- I understand the irony of describing the Internet as a one-service network, but I think you know what I mean: the idea of just having a big pipe of transferring packets -- how will we build a network to make sure that we can accommodate your vision of open access?

20:45:

Eric: I think there are two things I want to say. The first is, the Internet today is an example of a perfectly open access network. There is customers who choose which sites to go to. They are customers who choose which sites not to go to. And it's totally within the customer's control. Now, when you think of that model and you try and put it into this other form that we've had -- the legacy providers right now -- they are starkly different. But what we're trying to accomplish is, effectively, the type of service selection that we know and we actually have today. Only we want to apply it against all services. And we want new services to be added when they come around, you know, just as quickly as can possibly be done.

Now, some of those services that we were talking about earlier are local. They have local quality. So, they might have something to do with your school and your students, your local university and the students there. Which may, in fact, have both local and national relationships. But the way you architect networks -- OK? Which was really the core of our question. And I avoided it. I apologize. But -- the core of your -- the question is, how do we architect it?

22:17:

Chris: Right.

22:17:

Eric: Well, we don't architect it the way we used to architect it, any more than we would think in terms of the speed as being only one factor of an architecture. You know, it's sort of like saying, on my 1972 Volkswagen beetle I put on high-speed performance tires so it can go faster. It doesn't work that way. You know? You need the entirety of the architecture. And one of the things that has come forward recently is an architecture choice called "software-defined networks." Network function virtualization. Now ...

22:55:

Chris: SDN. NFV.

22:56:

Eric: Very good. You know. And the way this particular kind of new architecture is constructed, it allows us to add and withdraw services at will, rapidly, quickly, and even uniquely, to a certain set of customers. It also allows for automatic provisioning of services, such that a customer can go to a web page -- perhaps the service provider's web page -- and select multiple different services off of that that are instantaneously provisioned to that person's home. There are many aspects that are coming forward in this particular new architecture. But, you know, we don't design modern-day jets that have buggy whips attached to them.

23:47:

Chris: Right. Well, let me just throw something out that I think is important. Which is the idea of what a service provider is. A service provider could be the church down the street. Right?

23:57:

Eric: Yes.

23:57:

Chris: And so, what would happen is, potentially, a person who, let's say, has broken a leg, and attends this church could sign up and receive the church sermons, and through the magic of this SDN, you would have a local connection that would be provisioned at a very high capacity to deliver this. The payment would be transacted one way or another way. That would be easily, you know, basically be abstracted away from the user. Which is a different way of saying, you wouldn't have to worry about it. You know, all these sorts of things would happen instantaneously, and easily. I mean, that's fundamentally the goal, right?

24:33:

Eric: It's fundamentally the goal. But in this goal, we're also seeing all manner of other changes. So, I think one of the ways of looking at a service provider is that a service provider's function is really to operate the physical network, and to interface with those kinds of services that are requested on it.

24:53:

Chris: Wait. I would have said the network -- you mean the network operator. Like a monopoly network operator operates the physical stuff.

24:59:

Eric: OK.

24:59:

Chris: And a service provider is any one of -- is what I would have expected.

25:03:

Eric: Well, today -- today, when you're talking about a service provider, you talk about Comcast, you talk about any number of those legacy providers. And the interesting piece is that we -- when we have -- when we use that language, we are implying both their physical network as well as the services over which -- over what -- that they are in fact selling us.

25:28:

Chris: Right.

25:28:

Eric: So there are really kind of two functions going on.

25:32:

Chris: Right. Well, I mean, in fact, if Comcast, you've actually got them separated now. Comcast does physical stuff. Xfinity delivers services.

25:40:

Eric: Um hum. Right. And Comcast has other services, like NBC television, that is available on many, many systems besides Comcast's network. So we're seeing changes happen at a number of different levels. We're seeing monetization change, between -- For example, myself. I happen to be in that group of people who have "cut the cord," as they say. OK? And I pay certain services -- Netflix, Amazon Prime, the various Hulus, and so forth and so on -- a subscription-base, that doesn't go to what used to be the legacy provider collection for video entertainment.

26:25

Chris: Um hum.

26:25:

Eric: So, a service provider, meaning a person who operates this physical network, in this case -- I'm using that term -- has an interest and role in the way the monetization structures go forward, and in the actual operation of the network itself. So -- And those two are very closely related. One of the things that might well be the role of an open access service provider is to provide an interface for users to be able to select services that are openly offered across that network. We see a little bit of that today in programming guides on smart TVs and Tivos, on various different video entertainment boxes, where they've all got certain kinds of apps. But, you know, for those of you who have tried it, like I have, you know, you can find that it's even confusing between how they display the apps on a smart TV, on different smart TVs in the same house, on different devices -- BlueRay players, Tivo players, ...

25:50:

Chris: Right.

25:50:

Eric: ... and so on, down the line. Wouldn't it be nice to have a service provider that provided an interface that was easy to negotiate and navigate, and allowed you to select these various different -- we'll call them services, OK? And perhaps interact on them multiply on the same display device, right? Could well be one of the reasons you'd want that service provider's services.

28:09:

Chris: Right. But fundamentally, I think, we can sort of head toward the end of the show with the thought that we can't do any of those things until we get rid of the monopoly on the end user, basically, which, currently, cable companies tend to have.

28:23:

Eric: But the monopoly is created by the physical infrastructure ...

28:27:

Chris: Exactly.

28:27:

Eric: ... of those particular things, and so, yes, that does need to be replaced. Now -- but -- and so, earlier, you mentioned that you don't see this coming together as a public piece. I do. OK? I don't see how we can avoid it. Because the cost of deploying physical infrastructures -- multiple physical infrastructures -- to businesses and to homes is a foolish expense. A singular connection today -- well -- provides it all.

29:03:

Chris: I'm totally with you on that. But I think anyone who's closely observed our healthcare debates over the last 20 or 30 years may argue, we can do foolish things for a very long time.

29:14:

Eric: We can. We can. I'm just very glad that the sewer system that connects my house also connects your house and my neighbors' houses, and so on and so forth.

29:26:

Chris: Right.

29:26:

Eric: And they really don't care what any of us put down those ...

29:29:

Chris: Right.

29:29

Eric: ... particular pipes.

29:30:

Chris: I do still toss urine out my window, though, ...

29:33:

Eric: Oh, you do. Oh, good.

29:35:

Chris: So, thank you for coming in.

29:37:

[laughter]

29:39:

Lisa: For more on "open access," follow the tag at muninetworks.org . Learn more about Eric's firm at lookoutpt.com . Send us your ideas for the show. E-mail us at podcast@muninetworks.org . Follow us on Twitter. Our handle is @communitynets . Thank you again to Dickey F for the music for the show. His song, "Florida Mama," is licensed using Creative Commons. And thank you for listening.

30:06:

Chanute Receives State OK to Bond for FTTH Deployment

The Kansas Corporation Commission (KCC) will allow the city of Chanute move forward with its plan to serve residents and local businesses with its municipal network reports the Wichita Eagle. KCC staff had recommended that the community, which has built out a network over the course of decades, receive KCC approval. 

In keeping with an antiquated 1947 state law, K.S.A. 10-123, the city needed KCC approval to issue the revenue bonds. In keeping with the statutory requirements, the KCC found that the expansion is necessary and appropriate for the city, its consumers and investors. The KCC also also determined that the expansion will not duplicate an existing utility service.

In its filing [PDF], Chanute indicated that its network is an essential part of the local economy and the community's future:

Chanute is a rural community, and like all rural communities, access to broadband is fundamental to the well-being of its citizens and even to the survival of the community itself. Chanute does not need to convince the Commission of the importance of having access to a high- speed broadband network. The Commission is well aware of that need. The investments contemplated for Chanute's broadband network are necessary and appropriate to allow Chanute to meet that need in its territory.

As the city points out, incumbents AT&T and Cable One, do not offer anything close to the level of service of the planned gigabit FTTH network. As we cover in our 2012 report on Chanute, AT&T and Cable One seem to have no interest in serving the community beyond minimum expectations. It was the need for better services that inspired the city to build out its infrastructure and offer services to local businesses.

Prior the the KCC ruling, the Wichita Eagle reported that AT&T requested and obtained permission to intervene in the proceeding. AT&T's subsidiary Southwestern Bell Telephone Company (SWBT) petitioned to intervene in November [PDF], stating:

SWBT's interests and those of its customers may be affected by any order or determination of the Commission as may hereafter be adopted in the above- captioned proceeding.

AT&T told the Eagle:

“Any decision made by the KCC could impact AT&T’s business operations in the area, which is why we asked to intervene in the proceeding,” the company said in a written response to questions from The Eagle. “AT&T remains interested in both broadband issues and the work of the KCC.”

Larry Gates, Director of Utilities in Chanute, 
told the Eagle that the city is ready to issue the revenue bonds and begin connecting customers as soon as the KCC approves the request.

In their filing, the city also commented on the the outdated nature of the state law requirement. From the Eagle article:

In the commission case, Chanute is arguing that the 1947 law was actually designed to protect municipalities from defaulting on bonds because of private-sector competition, not to protect private-sector providers from competition with local government.

Since then, lawmakers and regulators have almost entirely deregulated telecommunication services, counting on competition in the marketplace to keep providers from charging too much or providing substandard service.

“This reasoning (behind the 1947 law) reflects an environment where construction of a telecommunications network was considered a natural monopoly, where one company could supply an entire market at less cost than two or more companies,” Chanute’s filing said. “That is no longer the case in the telecommunications marketplace.”

The 1947 law “does really sort of fly in the face of everything that has been said about competition,” [David Springe, chief consumer counsel for the Citizens' Utility Ratepayer Board] said. “It’s either a competitive world and you can stand on your own two feet, or it’s not.”

KCC staff agreed with Chanute. At the time the law was implemented, it was meant to protect the interests of the monopolies that served the rural areas, but the Telecommunications Act of 1996 shifted policy to encouraging competition.

There are other providers in the area, writes staff, but none of them can provide the caliber of services Chanute will offer. Because AT&T and Cable One do not offer services anywhere near the gigabit FTTH planned by Chanute's broadband utility, there would be no duplication of services.

Staff also agrees with the city, when it analyzes the need for the expansion. From the staff report [PDF]:

Upgrading Chanute's facilities would not only benefit the citizens of Chanute but its community anchor institutions and community business partners as well. In addition, by improving and expanding upon the fiber optic network currently in place by Chanute, Chanute is protecting its current investment. Staff therefore believes the expansion plans as contemplated are appropriate for the municipality and its consumers, and for the protection of its investors.

For a look back at Chanute's story, listen to episode #16 of the Community Broadband Bits podcast. Chris interviewed Larry Gates and then City Manager JD Lester.

DubLINK Network Supports Economic Development, Health Care, and Supercomputing

Award-winning supercomputing apps, medical research, economic development, and quantum computing advances. What do they all have in common? They all depend on the DubLINK network running underneath Dublin, Ohio, a suburb on the Northwest edge of Columbus. The city of 43,000 people has 125 miles of fiber optics in the ground, both within its own boundaries and in the form of fiber purchased by the city within metro and regional networks. 

DubLINK began in 1999 as a public private partnership with the Fishel company to build an institutional network. In the wake of the 1996 Telecommunications Act, Dublin worried that a recent massive investment of $70 million in streetscaping would be undone as competing providers dug up newly paved streets to install fiber optics. To avoid this, the City signed a franchise agreement with Fishel to install a multi-conduit system, with the city receiving some conduit for its own use.  

Using 1.25” conduits installed in the city’s existing sewer system, the network runs for 25 miles underneath Dublin’s business district and connects six city buildings, who use their own lit fiber for data and voice services, eliminating expense leased line fees. This has allowed the city to save approximately $400,000 per year for the last 12 years in connectivity and information technology expenses.

In 2004, Dublin spent $3.5 million to purchase 96 strands running 100 additional miles through Columbus FiberNet, bringing the total length of the DubLink network to its current 125 miles. FiberNet is a duct system that runs throughout a significant portion of central Ohio, including Columbus and its surrounding suburbs.

The following year, the City of Dublin struck a deal with the Ohio Academic Resources Network (OARnet). OARnet is a 1,600 mile statewide fiber backbone connecting K-12 schools, colleges, universities, federal research labs, and other institutions. A $500,000 grant from the Ohio Board of Regents allowed DubLINK to make its connection with OARnet, and the city gave OARnet an indefeasible right to use 4 of its 96 fiber strands throughout its entire 125 mile network. They called their partnership CORN, for the Central Ohio Research Network. Earlier this year, the Ohio State Legislature awarded DubLink $300,000, which along with a $250,000 National Science Foundation grant and a $328,000 local contribution, will allow DubLINK to match OARnet’s 100 Gbps speeds throughout its entire network.

Seal - Dublin, Ohio

According to Dana McDaniels, Dublin's Director of Development, the city has spent approximately $5.5 million over the years in building, purchasing, and upgrading DubLINK. For this investment, he estimates that the city has received at least a $35 million return on investment already. This includes avoided costs around $4.8 million ($400,000 per year over 12 years), leases to telecoms and other entities of about one third of the city's dark fiber that amount to $3.2 million, and the much more significant gains in employment and thus tax revenue that have resulted from companies expanding or relocating in Dublin to take advantage of its incredible connectivity.

Dublin has a two percent income tax, one quarter of which is dedicated to a wide variety of capital improvement projects. It also uses a small part of this revenue as collateral for tax-increment financing bonds, which it has used to fund some of its share of network construction costs, with the rest of the $5.5 million in total network investments coming from the regular capital improvements budget.

The network is currently being used by a wide variety of public, private, and nonprofit institutions, including National Mutual Insurance, Nestle, Dublin Methodist Hospital, and online reference catalogue company OCLC Inc. OCLC connects to 70,000 libraries around the world, but relies on DubLINK to secure its data by connecting to backup data centers throughout the region.

Rather than narrowly focusing on network revenue, Dublin takes a broader economic development approach to its fiber resources. Development Director McDaniels uses fiber connectivity to lure businesses to locate or expand in Dublin the way other cities use tax credits or land giveaways. Ohio Health, which runs six hospitals in the state and has various other facilities, was granted 4 strands of DubLINK's fiber, which helped them decide to headquarter in the city. They now light and manage the fiber themselves, using it connect to all of their facilities throughout the region. Because they are able to so easily run their operations from Dublin, they have expanded their employment in the city from 300 to 1,200 people.

This September, one of DubLINK’s institutional anchors announced that they would be using DubLink to test new applications for quantum computing. Battelle Memorial Institute, a nonprofit applied science and technology company, signed a five-year deal with DubLINK to use the city’s fiber for their Quantum Key Distribution network, the first commercially-funded network to use quantum computing to encrypt information. Using subatomic particles instead of binary code to transmit information, Battelle claims they have created a form of encryption that will be hack-proof even if quantum computers make traditional encryption techniques obsolete. 

DubLINK proved its usefulness in 2013 as well, when a collaborative including representatives from the City of Dublin, the University of Missouri, and The Ohio State University were recognized for creating the “Best Application for Advanced Manufacturing” at the Next Generation Application Summit in Chicago. The team developed an app called Simulation-as-a-Service, which allows small businesses and labs to remotely access supercomputing capability. Small manufacturers would be able to use the app (in combination with a robust fiber optic connection) to run design simulations through supercomputers on the Ohio State campus, as well as trade design information in massive data files. 

According to Prasad Calyam, an assistant professor of computer science at the University of Missouri and the leader of the team developing the app: 

“The app really requires the infrastructure,” said Calyam. “The infrastructure is not the end goal of the project. It’s really the app. But we couldn’t build the app without the infrastructure.”

“Our work on Simulation-as-a-Service is one example where having a city invest in broadband infrastructure will help economic development,” said Calyam. “It helps companies to move there, to use the infrastructure, and essentially build new kinds of collaborations.”

Expedient Logo

The combination of DubLINK’s fiber infrastructure and proximity to The Ohio State University has also helped attract a growing number of data centers and medical research operations. Dublin-based Cardinal Health opened a research center in the city earlier this year, and Expedient Data Centers recently announced plans for a $52 million data center.

An even bigger fish is on the line for Dublin, which is competing with neighboring suburb Hilliard to be the location for a new $1.1 billion Amazon data center. Amazon has been secretive about its plans, but Ohio Governor John Kasich recently confirmed earlier leaks that the center would be located in the Columbus area. 

Dublin is pushing ahead with the expansion of DubLINK in the coming months and years. In conjunction with the upgrade to 100 Gbps speeds, the network is also beginning to move towards an open access Fiber-to-the-Premise model for major office and multitenant buildings in the city. Rather than bringing fiber to the curb and waiting for building owners to take advantage, the city will be bringing the fiber directly into at least 20 buildings this year and about 10 each year thereafter, with the option to increase the pace if it incents businesses to locate or expand in Dublin.

DubLINK has also struck a deal with a local data center that will serve as a "meet me" room and is in talks with ISPs, which will allow those intitutions using DubLINK fiber to connect to whatever ISP they wish over the publicly owned fiber. It will also allow them to connect to OARnet, the National Science Foundation's GENI rack, and the Ohio State University's supercomputer remotely - all at 100 Gbps. 

The local schools are on the docket for connections as well, with the three city high schools and administration building at the head of the line. They all stand to gain 100 Gbps network connections, and will also benefit from the nearly limitless educational resources of Ohio's universities and research organizations available through OARnet.

Whether or not Dublin successfully woos Amazon, its fiber optic network has proven to be a valuable community asset. It has allowed the city to partner with a local provider to launch a city-wide Wi-Fi system over 24 square miles, which uses DubLINK for backhaul and in return allocates 25% of its bandwidth to the city for its own uses, such as police communication and logistical support for large public events. It has supported medical and computing research, creating good jobs in the process. For all these achievements, Dublin has twice been named a Top 7 Community by the Intelligent Communities Forum, and last year Dana McDaniels, who oversaw DubLINK's development, was given ICF's Lifetime Achievement Award.  

Open Access and Incumbent Challenges - Community Broadband Bits Episode 128

The open access approach, which generally refers to multiple service providers offering services across the same physical network, remains a challenge for those who want to implement it. Though many communities would prefer to focus on the infrastructure rather than selling services directly in competition with existing providers, most find the approach is not feasible.

This week, Eric Lampland is back on the show to discuss what the challenges are and how the future of open access may not be what many imagine it to be. Will we be purchasing a gigabit of Internet connectivity from service providers or will we instead be directly purchasing many services directly from service providers -- whether video, health care related, or other?

Lampland is the Founder and principal consultant of Lookout Point Communications. Our previous podcast with him discussed how to justify a network from just the indirect benefits.

Read the transcript of 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 30 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 Dickey F for the music, licensed using Creative Commons. The song is "Florida Mama."

"Ask Us Anything" Event on Organizing For a Network and Open Access on Dec 17

Last month, we held our first "Ask Us Anything: An Open Talk on Muni Networks" event for people interested in learning more about municipal networks. We were pleased by the turn out and by the quality of questions participants threw our way. We will hold our second "Ask Us Anything" event on December 17th at 2:00 p.m. CST.

This time, we will try narrowing the conversation a bit with focus on organizing a network in the first 30 minutes and open access approaches in the last 30 minutes. We hope that you will send us a question when you register and encourage you to bring more questions to the event.

You can register at GoToWebinar.

If you were not able to our first "Ask Us Anything," it is now archived and available to view.

More Muni Fiber Projects in Maine

Local communities in Maine are mobilizing to jumpstart economic development, expand educational opportunities, and improve Internet access. The town of Orono, located near the center of the state, announced earlier this month that it will working with nearby Old Town and the University of Maine to deploy an open access fiber network pilot project in an area they wish to promote as a technology park.

The news highlights connectivity improvements in Maine happening at the local level. In August, Rockport solidified its plans to bring fiber to its downtown with partner GWI. Soon after, South Portland announced a similar partnership with GWI to spur economic development. Sanford and Isleboro [PDF] have commissioned studies.

The Main Campus reports that Orono, Old Town, the University of Maine, and GWI have been in the planning phase for some time, but lacked funding to deploy:

“We tried to be the first on the map [with fiber-optics], but there were too many obstacles. Now we have the opportunity to do something,” said Orono Town Manager Sophie Wilson at last Monday’s Economic Development Committee meeting, where the opportunity was presented.

In early 2012, the town was in talks with Old Town and Maine broadband service provider GWI about connecting the towns and the University of Maine to the Three Ring Binder, an 1,100-mile long highway of fiber optic infrastructure that passes underneath Bennoch Road. In order to take advantage of the opportunity, the towns planned on coming together in a collaborative called Old Town-Orono Fiber (OTO Fiber) and applied for grant funding to go through with the project.

Although they weren’t able to receive the necessary funds in 2012, the town is in a better position this time around.

The Three Ring Binder, an open access dark fiber network owned by the Maine Fiber Company, was funded with ARRA stimulus dollars and private investment. The network went live in 2012 but providers have not built out last-mile connections as anticipated. To fill the gaps, these communities are taking matters into their own hands and investing in that last-mile fiber infrastructure.

The partners recently received a $125,000 grant from ConnectME Authority but will need to secure matching funds from the Northern Border Regional Commission. The Commission was created as part of the 2008 Farm Bill to support economic development projects in Maine, Vermont, New Hampshire, and New York. The pilot project will connect to the Three Ring Binder that runs near the park. Cost to the city is estimated at $25,000 - $30,000.

A new tenant, Eastern Maine Health, signed a lease contingent on the pilot project. Other entities are also interested in the location. 

According to Town Planner Evan Richert, Eastern Maine Health could potentially bring 150 new jobs to the area.

“It’s going to fill two buildings that have been vacant for two to three [or more] years and which have had quite a drag on the impression of our vitality [as a town],” Richert said.

“It’s also dragging the valuation down at the tech park, part of that $4 million loss in value [reported for fiscal year ‘14] was directly related to lack of rented space out there,” Wilson said.

Columnists from local press are opining about the state's poor connectivity. Bill Nemitz from the Portland Daily Press recently wrote about Wired West in Massachusetts, challenging readers to demand better from elected officials. Some of them already understand the need. Nemitz wrote:

As U.S. Sen. Angus King, a broadband cheerleader if ever there was one, put it in an interview Thursday, high-speed broadband is as important to rural Maine as stringing electrical wires to outlying homes and farms was back in the 1930s.

“We’ve absolutely got to do it,” said King. “It’s an economic death sentence for a community that can’t get broadband.”

In June, Bruce Segee, University of Maine professor of electrical and computer engineering, spoke with the Bangor Daily News about the pilot project:

“If [municipalities] want prosperity, [they] need to make something and bring people from outside to buy it,” Segee said.

Orono, Old Town, South Portland, and Rockport have decided to stop waiting for providers to bring that "something" to their communities and do it themselves. The Daily News:

A desire to attract and grow businesses is part of the reason why Orono and Old Town have taken steps toward building fiber for homes. For Richert, “the economic development of small communities rests less [now] with big developments and real estate but more with startups and established small companies innovating with new products.”

There’s no time to wait for Internet service providers to step up and make the investment themselves.

“We can’t afford to wait,” Richert said. “We need to grow small businesses.”

Rio Blanco County Plans for Deployment in Colorado

Earlier this month, voters in several Colorado communities decided to approve ballot measures to reclaim local telecommunications authority. One of those places, Rio Blanco County in the northwest corner of the state, has already committed funds to develop infrastructure.

According to a recent article in the Grand Junction Daily Sentinel, the county considers the issue so critical, it will dedicate $2 million in federal mineral lease revenues, and $5 million from the general fund to improve connectivity. County leaders say they will also seek funds from the Department of Local Affairs.

Rio Blanco County is planning an open access model. From the article:

[County Commissioner Shawn] Bolton said the county won’t provide broadband service itself, but instead will install infrastructure such as fiber lines.

“By providing infrastructure, then we can get the service providers to come here and provide the service at a competitive rate,” he said.

In March, the County, the County Seat of Meeker, several local school districts, and a list of other partnering entities, filed a Rural Broadband Expression of Interest [PDF] with the FCC. In their documentation, they noted that the private and public entities in the region had been working together to develop better connectivity since 2001. They named themselves the Western Colorado IT Cooperative (WCITC).

According to the Expression of Interest, fiber resources are now in place that connect a limited number of public facilities. The County Courthouse, the Rio Blanco County Road and Bridge, the Town of Meeker, its pubic library, and its schools all connect via the metropolitan area network (MAN). A medical center, also connects to the existing fiber network.

Population density is low in Rio Blanco County at approximately 2 people per square mile. Seventy-five percent of the county's 3,200 square miles is federally owned land. Most residents live in either Meeker or Rangley.

Community leaders in Rio Blanco County recognize that their geography and limited population will not inspire incumbents to build to serve local residents or businesses. They also realize they will need to take matters into their own hands. From the article:

“When it comes to putting broadband in our county, it’s not a good business model for anybody,” said County Commissioner Shawn Bolton.

Sebewaing Bringing Better Connectivity to Residents, Businesses Via Fiber in Michigan

If you live in Sebewaing, you can now purchase FTTH connectivity from Sebewaing Light and Water (SLW) via their municipal network. Earlier this week, we discussed the network with Sebewaing Light and Water Superindendent Melanie McCoy.

The first village in Michigan to offer gigabit service issued its RFP in summer 2013. Like many other small communities, the 1,700 inhabitants in Sebewaing were limited to dial-up. T1 service (1.5 Mbps)  was available to businesses but lines cost from $1,000 - $1,500.

Commercial connectivity via the new infrastructure now begins at $75 for symmetrical 50 Mbps service. SLW also offers symmetrical 100 Mbps for $130 and advertises customized packages if those options are not adequate. SLW will also waive the $125 installation fee if a business signs up before the end of the year.

Residents also receive free standard installation if they sign up before the end of 2014. They can pay as little as $35 per month for symmetrical 30 Mbps service, $55 per month for 50 Mbps symmetrical, or $105 per month for 100 Mbps symmetrical service. 1 Gbps/100 Mbps service costs $160 per month.

SLW has already signed up a commercial gig customer. The Bay Shore Methodist Camp & Family Ministries holds events that often cater to hundreds of children and adults. They need a high capacity connection for Wi-Fi to serve a large number of devices.

Sebewaing's original plan was to build an open access network but after careful consideration and legal analysis, it decided to provide retail services. SLW purchases bandwidth only from Air Advantage, a wireless provider specializing in the "thumb" of Michigan. The utility also offers voice services via the network.

According to a September Tuscola County Advertiser article, customers were signing up for service as SLW was finishing deployment. We checked in with Melanie McCoy, SLW Superintendent, who told us 328 people have added their names to a sign-up list. At this writing, they have connected 130 premises, mostly residents. SLW has not invested in marketing but when installers are out, residents see them and immediately call the utility to request service.

According to McCoy, unanticipated high demand has been one of SLW's biggest challenges. They underestimated the amount of time it would take to perform each installation and a few customers have grown impatient. Nevertheless, they have received glowing reviews from customers who are connected.

Speed is certainly an important factor in attracting customers so quickly, but McCoy told the Advertiser that the people of the community also value affordability and accountability:

McCoy said she’s pleased that Sebewaing residents and businesses will have access to gigabit speed, and they’ll have better prices and better service because of the “local” factor. Customers won’t have to deal with a large urban conglomerate for their service. 

Chris in Mount Vernon, Washington: Video Now Available

Over the past few months, Chris has been globe trotting to communities giving presentations and learning more about municipal networks across the country. After spending some time in Seattle, he headed to Mount Vernon, Washington to present at the Connect with the World conference on October 9th.

The event took place at Skagit College and included other speakers such as Craig Settles, Susannah Malarkey, and Mark Anderson. The video of his presentation is now archived and available to view.

Mount Vernon has operated its open access fiber network since 1995, serving public facilities and local businesses. We spoke with Kim Kleppe, Information Systems Director, and Jana Hansen, Community & Economic Development Director, in episode 38 of the Community Broadband Bits podcast.

For Chris's presentation, watch the video below.

Video: 
See video

Susan Crawford on the Responsive City - Community Broadband Bits Podcast 125

Susan Crawford, author of Captive Audience and now co-author of The Responsive City: Engaging Communities Through Data-Smart Governance joins us for Community Broadband Bits #125. We discuss the idea of a Responsive City.

Susan contrasts her visions of a Responsive City with more traditional notions of a "smart" city and notes that having fiber throughout a community is a necessary base.

We discuss a few of the examples from the book that discuss how local governments are being transformed and how we would like to see them continue to transform in coming decades.

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 15 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 Jessie Evans for the music, licensed using Creative Commons. The song is "Is it Fire?"