In the place where “Texas history lives,” the City of Granbury followed a fellow Texas city in delivering a Tropos wifi system that covers all 10 square miles of the city.  Less than a decade ago, Granbury had no functional IT department and after hurdles with a private public partnership, established a functional and successful publicly-owned wireless network.  Initially created to support city functions and mobile police, the network is available to the public, elevating the rural town outside of Fort Worth to the mobile age.

When Granbury hired IT Director Tony Tull in 2003, the technology capabilities of the city were dire: no staff, a budget of $6,000, and only two buildings with access.   Tull quickly brought city and council officials on-board to his ambitious technology plan to deploy wireless WAN to all city buildings in partnership with their existing ISP, Texas-based Frontier Broadband (now acquired by KeyOn).  The initial needs were to equip city personnel with mobile access which focused on police officers, firefighters, and city inspectors.

Other goals included general public and tourist broadband access, reading utility meters, perform live web casts, and connect to nearby governmental networks.   After the City received a Homeland Security grant, $70,000 was earmarked to outfit over 10 police vehicles with wireless laptops.  In 2004 Tull attended the Public Technology Institute’s National Summit for Local Governments in Corpus Christi where he reviewed the city’s 147 square mile wireless network by Tropos.  Convinced the technology was right, Granbury deployed a test run of 40 routers across half the city and eventually 100 more to cover the roughly 10 square miles.

The initial returns on investment came eight months after launch when the police department returned $78,000 in budgeted police salary overtime.  The department later reduced its 2005 budget by $100,000.  The City has also saved time and money with the network reading digital meters, assisting building inspectors and providing cheaper connections to municipal buildings.  The total start-up costs were $325,000 which included acquisition costs, infrastructure, and the Tropos price of $68,000 for each square mile of the network.  City departments continue to streamline with the system and since 2007 public users have been accessing the network for $5.95 daily or $19.95 monthly.  Signal repeaters are available to boost signals in homes.

Though the project began as a public private partnership, Granbury found it’s private partner, Frontier Broadband, not living up to their bargain.  

Unfortunately, Granbury’s private partner did not respond to network performance problems as quickly as the city would have liked. In March 2007, the city bought the 10-square-mile network for $225,000 to maintain more control over its performance. The Granbury wireless network is now live with the city managing it and selling service to the public. “Be careful how you pick your partners,” Tull said. “Things that are a problem for you may not be a problem for the provider.”

Like officials of many cities who invest in infrastructure, Tull sees the network additionally for its important impact on every citizen and the social or indirect benefits that come back to the city and to the citizens.

“Is subscription sales the only way our municipality is going to see a return on our $500,000? Not really. We see other benefits. Police on the street longer because they can do their reports from the cars rather than the squad room. More information to our firefighters before they make scene on a possible structure fire. AMR project. Tourist access to city wide internet. These are all hard dollar and soft dollar returns that are real.”

Lafayette Doing OK, Doubles Capacity for Promotion

John at Lafayette Pro Fiber recently updated us all on LUS Fiber's financials. According to John, LUS Fiber is doing OK, not great, in its FTTH offering (probably the best deal in the nation for fast, affordable, and reliable connections). In reading deeper, it is clear that the impact of the community network on the public is GREAT, not just ok.

From John's writeup:

LUS estimates that the citizens of the community have saved 5.7 million dollars—in part direct saving from LUS' cheaper phone, video, and internet services and in part as a consequence of Cox lowering its prices and giving out special rates. Those special rates were discussed in the meeting with Huval pointing out that Cox had petitioned for and received permission to treat Lafayette as a "competitive" area. That meant that Cox could offer special deals to Lafayette users and, as we all know, has offered cuts to anyone who tries to leave. Those "deals." as Huval pointed out to Patin don't include the rural areas of the parish where Cox has no competition.

But it doesn't end there. LUS Fiber, due to anti-competitive laws pushed through the state's legislature to handicap public providers, is actually subsidizing the City -- providing more benefits to everyone, even those who do not subscribe to the network.

Again it all goes back to the (un)Fair Competion Act. One of the things in that act a concession that LUS Fiber would be able to borrow from LUS' other utilities just like any other corporation could set up internal borrowing arrangements. This is not a subsidy, it's a loan—with real interest. One of the efforts to raise an issue by Messrs Patin and Theriot centered around "imputed" taxes. Those are extra costs that Cox and ATT got the state to require that LUS include in order to force LUS to raise their price to customers (you!) above the actual cost. (Yes, really. See this. The idea was that LUS should have to pretend to pay taxes that it doesn't actually pay when setting its pricing—and include those fake costs when competing against Cox or ATT. PSC regulations (not the law) requires LUS Fiber to send those monies to the larger LUS. So LUS utilities is holding money LUS Fiber earned. LUS utilities loans it back to LUS Fiber—at interest. The net effect of this is to subsidize LUS' other utilities on the back of the new utility, LUS Fiber.

That's the only subsidy uncovered today.

You can't make this stuff up. Only in Louisiana.

Lafayette is also saddled with unexpectedly high programming costs due to Cox leaning on NCTC to prevent Lafayette from joining the coop. This means LUS Fiber has to pay higher prices than its competitors do to deliver the same television channels.

Even though Lafayette is offering the fastest broadband in the area, they are running an incredible promotion - everyone got bumped up a tier in August and September. If you are paying for 10Mbps symmetrical, you are getting 30. If you pay for 30, you get 50. And you get 100 if you pay for 50.

This is how community-owned promotions run -- they actually deliver the goods rather than only giving you a low introductory price that balloons after 3-6 months (followed by annual rate increases thereafter!).

If you wanted to judge LUS Fiber from the perspective of a private company, it would be OK. But if you account for all the benefits it is delivering to the community, it is doing great.

Opponents of public ownership like to claim that publicly owned broadband is somehow hostile to business -- this is a a major Time Warner Cable talking point in North Carolina. The reality is that community networks are incredibly biased in favor of local businesses. Most community fiber networks resulted out of economic development needs, when public leaders realize the fast, reliable, and affordable access to the Internet is a key to attracting businesses (and that massive absentee incumbents rarely care to invest enough to attract those businesses).

Unfortunately, the argument resonates among a public that rarely remembers the U.S. economy was built on key public infrastructure investments -- from roads and highways to water works to universal electrification, if the public didn't own the infrastructure outright, it attempted to regulate in the public interest. And though regulators are frequently captured by those they regulate, the outcome is still better than allowing unaccountable electrical trusts to arbitrarily decide how much to gouge their customers.

When Google was search for a community partner in building its gigabit network, it was not shy about public ownership -- we now know that a key factor in the decision was Kansas City's publicly owned electrical company. Being owned by the City allowed Google a single point of contact and an assurance that they could all work together to build the network.

Surveying businesses in three early FTTH communities revealed dramatic savings:

In terms of fiber-enabled cost savings, 120 businesses in Bristol reported an average of $2,951 in savings per year, while, in Reedsburg, 33 cited annual cost savings averaging $20,682. Twenty Jackson businesses reported cost impacts due to fiber, with one large organization reporting a total of $3 million in savings. The other 19 Jackson respondents reported a net average cost increase of $3,150 per organization.

Make no mistake, public ownership of infrastructure is not anti-business, it is pro-business. There are a handful of businesses that benefit tremendously when they control infrastructure -- but it comes at the expense of the vast majority of businesses and citizens.

Spanish Fork, a well-regarded community broadband network, is now offering triple-play services on its hfc network. Previously, the town was offering broadband and television but recently added telephone after feeling the time was right.

From the article:

John Bowcut, director of Information Systems for Spanish Fork, said 15 percent of homes signed up when told telephone service was available over the cable. The network only used door hangers to advertise at first because it intended to have a slow rollout. Then the service was promoted in the city newsletter.

SFCN's phone rollout was slow for a reason. Small neighborhoods were notified one at a time, which allowed the network to handle the load. Bowcut said they didn't want to open sign-ups citywide and then have to tell people their connection date was three months out. He said the most people had to wait this way was 10 days.

Initially about 1,500 homes signed up for phone service, out of 5,534 homes in Spanish Fork.

The new telephone service runs an economical $14.95 with a variety of features. 75% of the town takes at least one service from the network, perhaps because of the great customer service:

Perrins was a beta tester for the system. He thought going through that process was awesome. They fixed every problem quickly and fine-tuned the network. "It was fun because the employees were so excited and eager to find and fix the problems."

Prior to the telephone rollout, only some 60% of the community took a service from the network, as explained in this article

About 60 percent of Spanish Fork residents already subscribe to SFCN's cable TV and high-speed Internet. The customer appeal of the city-run communications utility is that Spanish Fork provides both the infrastructure and the service -- a practice that was actually outlawed by the Utah Legislature in 2004, though Spanish Fork was grandfathered in.

This means SFCN can cut out any middle-man service provider, which amounts to about $2 million in savings each year, Mayor Wayne Andersen said.

"I think it was a sad day when the state Legislature put the kibosh on that sort of thing," Andersen said. "This is our baby, and as long as we keep it running and working, it's ours."

This is an interesting development -- many networks are seeing fewer customers signing up for telephone services. Yet it appears to be quite popular in this community.

What is the difference when a community owns the network?

"Phone companies have been a little unfair with their customers," Bowcut said. "The cost of delivering voice service has continually gone down and the customer hasn't seen that decrease -- it's about time."

And yes, for those who care only about a private sector accounting model, the network runs in the black.