rural

New Hampshire - Fast Roads Open Access Network

Folks in New Hampshire are fed up with the private carriers ignoring them and have started an initiative to build their own fiber-optic open access network. Looks like the site is pretty new, so check back for details.

Stimulus - Private Companies Won

Last summer, I predicted the NTIA's rules for the broadband stimulus would disadvantage the public sector and tilt the playing field toward the private sector. I was right.

Consider a recent story about the first round of the stimulus:

With time and resources scarce and applications to review from nearly 2,200 entities, favoring vendors was less complicated because they wrote savvier proposals and required less follow-up, in Winogradoff's view.

Private companies were able to submit savvier proposals and generally swamp the system with far more proposals, slowing the entire process because the federal agencies did not expect the volume. NTIA claimed they wanted to make the funds more widely available and instead shut out much of the public sector.

NTIA, along with most federal agencies, simply does not understand that a "level playing field" between private companies and the public sector is simply not possible. The public sector has different interests - maximizing social benefits whereas the private sector is interested in generating profits. Public and private entities are different creatures, operating in different regulatory environments, with divergent motivations. You can no more create an objectively level playing field between the two than one could in designing a contest between basketball and soccer teams. The rules are simply going to favor one or the other.

The question becomes, who should the rules favor? When it comes to infrastructure and tax dollars, the rules should favor those who put the public interest first. This was the lesson of the Rural Electrification Administration, which was horrified at the idea of lavishing grants on profitable companies in the hopes they would temporarily invest in rural areas. Instead, they offered loans to cooperatives and extended electricity to farms across the country during the worst Depression in our history.

What have we learned from that? Nothing. We contort our policies while offering more and more money to companies that time and time again show they have no interest in serving rural America. This is ludicrous - not only have we already built a wire out to almost every home in America, we still have the polls!

We should ramp up loans - not grants unless absolutely necessary - to rural cooperatives, nonprofits, and other publicly-oriented organizations that put the common good first. This is a long term solution to a very serious infrastructure problem. Publicly owned fiber networks would offer faster services at lower prices -- ensuring all Americans would benefit from this communications revolution.

The second round of stimulus learned nothing from the first. We might hope the FCC National Broadband Plan does better, but the real solution is for your community to consider how it can best invest for its future.

The Economist Profiles Bristol Virginia Utilites Network

In a recent issue, the Economist profiled BVU - the first municipally-owned triple-play fiber-to-the-home network in the U.S. Evidently, the Economist thinks Bristol an unlikely spot to find a full fiber-to-the-home network, but some of the best networks in the U.S. are in these unlikely spots because they are built by communities who have realized the private sector will not build the needed infrastructure.

And this infrastructure has brought many jobs to the region:

And the fibre brought jobs. In 2007 both Northrop Grumman, a big American defence contractor, and CGI, an international IT consultancy, said they would hire between them 700 technicians, consultants and call-operators at offices in nearby Lebanon, Virginia, part of BVU’s fibre backbone. Both cited the area’s universities and low cost of living, but neither would have come without BVU’s investment, which Northrop calls absolutely critical.

The article asks a common question but answers it exceedingly well:

Should cities be in the business of providing fast internet access? It depends on whether the internet is an investment or a product. BVU could not afford to maintain its fibre backbone without selling the internet to consumers. And it could not build a subscriber base without offering cable television and a telephone line as well; households these days expect a single price for all three services.

Most communities would rather not have to get involved with selling services like cable television, but such services are generally a necessity to cash-flow the network. So, as they did before with electricity, they do what they must to keep the community strong and competitive.

Nulty on EC Fiber: "Too Shovel-Ready? Never!"

Publication Date: 
February 1, 2010
Author(s): 
Tim Nulty
Publication Title: 
OSP - Outside Plant

Tim Nulty describes the "most rural" FTTH project in America - a large multi-community build in Vermont, the state with the largest percentage of people living outside metropolitan statistical areas. This is more of a technical article, explaining why the network is necessary, who they have contracted with, and the topology of the network.

Beginning in early 2008, ECFiber developed a project to bring fiber to every single premises in its area: “universal service -- no exceptions, no excuses” without any assistance from the State. This project was completely self-sustaining from the revenues of subscribers alone. A public offering of $90 million of Certificates of Participation, fully compliant with SEC requirements, was prepared by Oppenheimer Company and was on the verge of closing when Lehman Brothers collapsed and with it the entire municipal debt market.

ECFiber had to start again from scratch. Fortunately, the Stimulus Bill passed about this time and ECFiber redirected its financing efforts to that source. It was not a difficult matter to recast its Public Offering documents into an application for a BIP loan. No grants are needed by the ECFiber project and none are asked for. Vermonters generally don’t approve of free taxpayer handouts except in extreme circumstances. ECFiber is completely viable and requesting grants would be, in our view, unnecessary and, hence, improper.

We continue hoping the RUS will stop wasting time with lesser projects and direct a loan to these folks in Vermont.

WindomNet to Expand with RUS Grant

Finally, a broadband stimulus project that we can get excited about. RUS has announced a grant to expand the publicly owned WindomNet in southwestern Minnesota. Windom was originally built to bring broadband to a small community that Qwest didn't think ready for DSL. They built their own fiber-to-the-home network.

In rural Minnesota, the Southwest Minnesota Broadband Group (SWMBG) has been selected to receive an almost $6.4 million loan and a $6.4 million grant to extend fiber to the Jackson, Lakefield, Windom, Round Lake, Bingham Lake, Brewster, Wilder, Heron Lake, and Okabena communities. This funding, along with an $88,000 private investment, will provide high-speed Internet, voice, and cable television to the participating communities. This will improve the quality of life by increasing the availability of health, education, and public safety services across the region.

Now that network will expand to nearby communities, a move that will strengthen it financially as it can spread the fixed costs of such a network across a wider population base. And these communities will have actually have a choice in providers soon -- rather than relying on absentee incumbents that care only about increasing their profits.

They will be beginning expansion work quite quickly according to this brief article.

Wired Road Plans Expansion, Adds Service Provider

The Wired Road, a community-owned open access network in rural Virginia, has added an additional wired service provider and announced expansion plans. This is a network in Grayson and Carroll counties as well as the city of Galax. Services on the Wired Road are provided exclusively by independent service providers, not the network owners. The network currently offers services in limited areas but plans to serve most of the region by 2012 with both fiber-optic and wireless options.

NationsLine now offers a variety of services, including VOIP and broadband to those on the network. The network will expand this spring:

Bolen also announced The Wired Road plans to add fiber and wireless services to Grant in western Grayson County, with groundbreaking tentatively set for spring. Funding this expansion is an $837,453 Community Connect grant received from the U.S. Department of Agriculture’s Rural Utilities Service. This latest project includes a public computer center that will be housed at the Grant Grange Hall.

Qwest Isolates Entire Minnesota Counties with Fiber Cuts

For some 12 hours last week, entire communities found themselves without access to telecommunications due to a fiber cut to a Qwest cable that services the entire region. This is not the first time such a cut has marooned everything from Homeland Security to long distance phone calls to businesses that can no longer accept credit card transactions -- but Qwest has refused to invest in a redundant cable, showing their disregard for those communities.

I wonder how many businesses were hurt by their sudden and unplanned isolation from clients, partners, and others. How many missed contracts or deadlines?

It shows the insanity of putting barriers before communities that are trying to build the very networks companies like Qwest promise but never deliver (barriers like the 65% referendum to offer telephone services for publicly owned networks). Both Lake and Cook Counties are waiting to hear the status of their applications for federal broadband stimulus funds, with which they will build broadband networks. Companies like Qwest and Mediacom have opposed new networks in an effort to protect their turf, even while refusing to invest in those areas because they do not generate sufficient profits.

These County initiatives have not been denied stimulus funding but have also not moved into the "due diligence" phase, placing them in limbo and forcing them to prepare additional applications for the second round of funding before they even know why their application was denied (if it is denied) in the first round. Somewhere, Joseph Heller is smiling.*

MPR provided good coverage of this fiber cut even though they did not air an explanation as to why Qwest finds it reasonable to keep these communities connected with a single cable.

Bank ATM's failed. No one could use their credit cards. But as bad as that was for business, the 12-hour-long outage knocked out what the federal government calls a "vital part of our nation's emergency response system."

The outage killed 911 emergency service in Cook County, Chief Deputy Leif Lunde said.

...

With no 911 service, county officials turned to volunteer firefighters to field emergency calls from normally un-staffed fire halls. Fire truck radios relayed the information back to Grand Marais. Ham radio operators provided a backup way for the Grand Marais hospital to consult with Duluth medical facilities.

U.S. Customs and Border Protection officers received help from their counterparts in Canada, according to Public Affairs Liaison Chris Misson.

Read, or listen to, the entire story - it is well worth it and a good reminder that these networks are essential infrastructure.

Update: Resident Jim Boyd has a great piece as well, describing the impact of this Internet dislocation:

County and state police officers lost the ability to check driver's licenses and vehicle plate numbers and to make warrant checks on people pulled over or behaving suspiciously.

...

Banks lost access to all of their online records and their ability to connect with other financial institutions. Business ground almost to a halt, save for the few simple transactions that required only a temporary paper record, such as cashing small checks or accepting deposits.

I won't quote more because you should read his entire analysis. The conclusion is impossible to dismiss: these networks are essential infrastructure and communities must have the option of building their own network to avoid these problems.

Many communities around the country have built their own networks to ensure redundancy to first responders and other vital entities. In New York and DC, the local government runs its own network because their public safety departments cannot be just another customer to the phone company. In North Carolina, the non-profit Mountain Area Information Network provided broadband access to ham radio operators to recover in the event of a natural disaster - the incumbent (a national company) is far less responsive to local needs.

Disruptive cuts to these networks are not infrequent around the country -- but they don't always make the news, unfortunately. 2 months ago, I got an email from an exasperated person in Nebraska who noted thousands had lost Internet for 12 hours at that point and they didn't know when it would end. Once again, it was caused by a cut to Qwest fiber. Googling it, I cannot find news of it anywhere except for some social media sites. Nebraska is one of the worst states when it comes to preempting communities from building their own networks -- they need to reconsider that decision to bring some competition to town.

*Author of Catch-22 for you non-literary types.

Photo by Jackanapes, used under creative commons license.

Universal Access - History and Future

Last month, the Daily Yonder offered a short history of Universal Service in telecommunications in the U.S. Due to the high costs of providing services in many areas of the country, private network owners have never demonstrated an interest in providing universal service, leading to various government initiatives to expand access to telecom networks.

One of the reasons we support publicly owned networks is because we strongly believe in universal service. Universal access to fast and affordable broadband is an important goal for a variety of reasons, not the least of which is its potential to democratize and enhance educational opportunities.

Readers of this site undoubtedly recognize why fast and affordable access to broadband is important to people in rural areas. What is often forgotten is why people who already have access to such broadband should care about extending access to those who don't yet have it -- aside from simply caring about fellow Americans.

There are actually self-interested reasons why everyone should support extending networks into rural areas. Perhaps the best reason is something called the "network effect" which refers to the principle that the value of a network increases as more users join. One example of this is the telephone, where a telephone network becomes more valuable as more people are on it - allowing subscribers greater access to each other.

Another benefit rooted in self-interest is analogous to benefits of rural electrification. When publicly owned electrical networks electrified the country-side, new markets were created as people with electricity began buying appliances, creating a demand for more products and services. Though the effect may not be as strong with broadband, the new technologies will create new markets, creating more opportunities for everyone.

I do not suggest these self-interested motivations are the sole or best reasons for universal service, but I also want to make sure they are part of the discussion because we all benefit by ensuring everyone has access to these essential infrastructures.

To return to the Daily Yonder piece, it notes the beginning of universal service (and also the importance of "interconnection"):

The concept a universal service originated in the early days of the telephone industry, between 1894 and 1912, after Alexander Graham Bell's patents had expired and before the federal government granted the Bell company "natural monopoly" protections. As Martin Mueller points out in his book "Universal Service," during this period of open competition, scores of telephone providers raced to set up networks and overcome Bell's considerable lead. But Bell refused to connect its networks with those of the independent providers; as a result, subscribers found themselves unable to connect with subscribers from other competing local exchanges. At the time, the only way to resolve this division was to subscribe to both the Bell network and the local independent network. This solution (of sorts), known as "dual service," was generally affordable only for businesses.

In 1907, there was a push to force interconnection between these proprietary networks. That was the first meaning of "universal service."

The article offers interesting details of how perceptions and policies changed, leading up to the 1996 Telecom Act:

Under the 1996 Act, the FCC was explicitly tasked with ensuring that such basic telephone services should be available "at just, reasonable, and affordable rates," and that the list of services covered under the universal service provision be periodically updated to reflect new technological developments. The 1996 Act also acknowledged the uneven geographic distribution of services and sought to correct this inequality by stipulating that consumers in rural areas be provided with telecommunications services at a level of quality and at rates "reasonably comparable" to those available in urban areas.

We may take ubiquitous electrical and telephone networks for granted, but they were a conscious decision. And as we move forward with universal service, we must push for public ownership to properly align incentives. The public should own the networks to ensure everyone is properly served while allowing independent service providers to compete for subscribers. Universal access -- with freedom of choice between providers. It is possible and should be our goal.

Rural Folks Need Broadband Too

After reading an impressive article in the South Washington County Bulletin, I am convinced that most Americans now understand that broadband is essential infrastructure for communities. Don Davis' "Speedy Internet could boost rural Minnesota" is a lengthy and thorough discussion of why every community needs broadband connections.

He starts by noting the MN Broadband Task Force, which found that the state should make sure broadband access is ubiquitous in the coming years at minimum speeds considerably above what is available currently in most of Minnesota. What it lacked was a suggestion of how to get there.

Don delves into the Lake County solution:

A northeastern Minnesota county is doing just that and may have the answer, at least for those in the "second Minnesota."

Lake County hopes to blaze a trail to a faster Internet with private businesses paying most of the cost.

County officials want to lay fiber optic cable, capable of carrying high-speed signals, to every home and business with electricity. If it happens, Lake County could become a model not only for Minnesota but the country by offering its rural citizens the same service as their big-city cousins receive.

As detailed in the article, Lake County has lost economic development opportunities precisely because they cannot guarantee fast and affordable connectivity to those who otherwise want to locate there.

What he does not make clear is that Lake County will own this network. It will be operated by National Public Broadband - a nonprofit. The private sector is not interested in bringing true broadband to the North Shore and local citizens should be glad of it - they will get a far superior network than Qwest could have built.

Once the public builds this fiber network (using private sector contractors), other private sector companies will provide services over it. This is a good model - the public builds the infrastructure and allows private companies to deliver services. The public can ensure everyone has equal access by physically connecting every residence and business.

Unfortunately, one of the MN Task Force members - who should know better - is quoted as saying it isn't "financially feasible" to build fiber to every home. What is or is not financially feasible is debatable. There were plenty of doubters when it came to rural electrification.

The key is to empowering communities to build their own networks. States that discourage publicly owned networks take these choices away. In the future, communities with subpar broadband connections should only have themselves to blame for failing to take responsibility for an essential piece of community vitality. If that is the case, we will have done the best we can do. As it is now, much of telecommunications policy discourage communities from solving their own problems by making them jump through more hoops than absentee companies that have little interest in making long-term investments.

Lake County is following a smart path:

Lake County hopes to get a low-interest federal economic stimulus loan for a private company to lay fiber cable. Then private firms will be allowed to provide service over those lines. The county does not plan to be an Internet service provider itself.

What is important is who makes the decisions - and Lake County will be the decider because it is take responsibility for owning the network.

Photo by Jackanapes, used under creative commons license.

Comments on Round Two for Broadband Stimulus

I have just submitted comments from the Institute for Local Self-Reliance to both the the National Telecommunications and Information Administration (NTIA) and the Rural Utilities Service (RUS) regarding suggestions for rules in round two (the last round) of the broadband stimulus programs -- the Broadband Technology Opportunities Program (BTOP - administered by NTIA) and Broadband Initiatives Program (BIP - administered by RUS).

The two agencies previously posted a joint request for information [pdf] on lessons learned from the first round:

RUS and NTIA released a joint Request for Information (RFI) seeking comment on further implementation of the Broadband Initiatives Program (BIP) and the Broadband Technology Opportunities Program (BTOP). Comments must be received by November 30, 2009. The input the agencies expect to receive from this process is intended to inform the second round of funding.

We offered five pages of comments, responding directly to the questions - I am led to believe that this is the preferred way of responding to such requests for information. Thus, the format consists of a short introduction and then questions (in italics) followed by our responses.

Unsurprisingly, we generally encourage NTIA and RUS to better serve the public interest by requiring more transparency in the second round. We also call on them to stop accepting "advertised" speeds in their broadband definition and use actual delivered speeds in order to ensure communities are not discouraged from applying because their incumbent providers exaggerate the capabilities of their network.

Most importantly, we call on NTIA and RUS to encourage public sector entities to apply by ceasing to consider all private networks to operate in the public interest. As we previously documented here, NTIA subverted the intent of Congress with the rules from round one. The rules should prefer public and nonprofit entities as they are directly accountable to the public and should therefore be the first in line to receive public money for essential infrastructure.

As the number of applications to NTIA and RUS was far higher than expected, making the public interest requirements stronger should be a natural response. They have far greater demand than funds, thus they should make the requirements more difficult in order to ensure all the funded networks offer greater benefits.

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