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To Overbuild or Underbuild? A Rural Policy Conundrum - Community Broadband Bits Podcast #91

Lisa Gonzalez and I, Christopher Mitchell, are back in studio for a short conversation about the implications of a municipal network or a coop receiving subsidies from government to engage in overbuilding, where it builds a fiber network in an area already served by slow DSL and cable networks.

This has become an important issue as Minnesota considers a fund that would encourage networks in areas currently unserved and possibly underserved.

We discuss the economics, fairness, and practial realities of both allowing "overbuilding" and disallowing it as Minnesota features two similar networks that have come to different conclusions, to the advantage and disadvantage of different local stakeholders.

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 13 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 Valley Lodge for the music, licensed using Creative Commons. The song is "Sweet Elizabeth."

Fork in the Road For UTOPIA: Forward or Backward? Community Broadband Bits Episode #85

The Utah Telecommunications Open Infrastructure Agency, which we have written about many times, is at a crossroads. An Australian corporation specializing in infrastructure is prepared to infuse $300 million into the project but the Utah Legislature may prohibit it from expanding and even from using existing connections outside member cities.

We asked Jesse Harris of Free UTOPIA and Pete Ashdown of XMission to join us for Community Broadband Bits Episode #85 to sort out the stories.

Jesse explains the potential Macquarie investment and how the bill HB60 could hurt both that deal and more broadly, connectivity in the area. Pete Ashdown discusses how he learned of the bill and what it would mean to his business if the network were able to be expanded.

We previously spoke with Pete Ashdown and Todd Marriott about UTOPIA in Episode 3 of this podcast.

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 Fit and the Conniptions for the music, licensed using Creative Commons.

Community Fiber Is Not Just About the Fiber

The focus on community networks tends to linger on the technology - FTTH is much faster and more reliable than cable or DSL services. But community fiber is only partially about the superior technology, as evidenced by a recent story over at Broadband Reports - "Verizon has been Quietly Increasing FiOS Fees."

We don't see this behavior in Chattanooga, which has gone over four years without raising the fees for Internet access to telephone services. Community networks rarely increase their fees because the cost of delivering Internet and telephone services declines over time. Television prices go up, though less rapidly for community networks than big cable firms because the big firms demand a bigger margin.

Further, we see that Verizon has been sneaking its price increases into things like the router rental fee, as Comcast and most providers have long done. At one point, renting the Comcast modem cost me $2, then $5, now $7, and in some places $9 I hear. Per month. I bought my own now - took less than a year to payback. But my bill has gone up even more since then, so I didn't gain much.

Now Verizon is even charging for battery backup units:

In addition to price hikes, promotion cuts, the new gateway rental fee and the activation fee, Verizon also recently started charging users for the backup batteries in their ONT units, first charging users for backup battery replacement, then charging users to get any backup battery in the unit to begin with.

Anytime you hear someone arguing that munis should only be able to build their own networks where the private sector absolutely refuses, recall that community owned networks are not simply a consolation prize, they are often superior. Better customer service, lower rates over the long term, and more likely to invest in upgrades as needed - there is no good reason to condition this investment on the refusal of some other distant company to provide an inferior alternative.

Kansas Community Benefits from Community Owned Networks

Even though the Kansas cable lobby have temporarily retracted their competition-killing telecom bill, we still want to highlight the benefits of preserving full home rule, local authority by focusing on a number of communities, including Chanute, Ottawa, and Erie.

Chanute

We have reported on Chanute's municipal network for years. The community leveraged its electric utility assets and incrementally built an extensive publicly owned gigabit fiber network. Over several decades, the community expanded its network to serve schools, libraries, local government, and businesses. Chanute took advantage of every opportunity and created a valuable asset with no borrowing or bonding.

Several business, including Spirit AeroSystems, chose to locate in Chanute because of its incredible fiber network. Spirit brought approximately 150 new jobs. The network also retained jobs when incumbents refused to provide needed upgrades to local businesses. Rather than leave town, the businesses connected to the City's network and increased their productivity. 

Former City Manager J.D. Lester referred to municipal broadband as “the great equalizer for Rural America,” saying: “You don’t have to live in Kansas City to work there.” (See our case study Chanute's Gig: One Rural Kansas Community's Tradition of Innovation Led to A Gigabit and Ubiquitous Wireless Coverage [PDF])

Kids in Chanute have access to connectivity other schools can only dream about. The local community college has expanded its distance learning program with higher capacity broadband. Free Wi-Fi hotspots are all over town; money otherwise sent to distant providers stays in the community. Chanute has invested in a WiMAX wireless system that serves public safety all over the region, not only in town. Their other utilities use the network for automatic metering and SCADA applications, saving energy and allowing customers the chance to reduce utility bills.

Chanute Logo

In addition to savings public dollars by reducing the cost of municipal connectivity, the broadband utility generates $600,000 and contributes 5 percent of that to the general fund.

Community leaders recently began planning for a FTTH expansion to bring fiber Internet to every home in town. If SB 304 finds its way into the books, those plans will be derailed and residents will be left with slow cable and DSL access.

Erie

Erie, southeast of Chanute, also utilizes Chanute's extensive fiber network for affordable school connectivity. When it was time to upgrade, Erie approached incumbent Cox. Cox's proposal for 100 Mbps to the high school alone was $5,000 per month. With its microwave network, Chanute is able to provide Internet service to the Erie community where already fiber connects the school facilities. Chanute serves Erie's high school, grade school, administration offices, and the bus barn where students learn auto mechanics. Like Chanute schools, Erie is guaranteed 100 Mbps but able to burst up to 300 Mbps when capacity allows. Erie pays only $5,100 per month and 80% of its connectivity fee is reimbursed by the federal E-rate program.

Ottawa

Inspired by Chanute's success, nearby Ottawa launched its fiber network in 2013. Ottawa joined forces with its school district and county government. Ottawa used an existing patchwork school district and county fiber, linking them together as a community network backbone. Each entity retained ownership of their resources but shared fiber strands with the City.

Ottawa businesses were dissatified with services from incumbents who were not interested in upgrading. Choices were expensive and slow T1s or an uber expensive DS3. Multiple appeals to incumbent AT&T yielded no results.

Schools, the area community college, and a farmers' cooperative connect to the network for better capacity and lower prices than AT&T will offer. The school district has cut its connectivity fees in half from $6,000 per month to $3,000 per month, by switching to Ottawa as a service provider. They now receive double the speed they used to purchase because the community network takes a much different approach than AT&T. From our April 2013 article on Ottawa:

Ottawa followed Chanute's example by providing a floor instead of a ceiling as the foundation for service. In other words, customers contract for minimum capacity but are allowed to burst to whatever capacity is available at any given time. For example, the School District will soon connect with a minimum 250 Mbps with the ability to burst to 500 Mbps.

Kansas Anti-Competition Bill Authored by Cable Lobbyists

We learned a lot today about the anti-competition bill (SB 304) in Kansas to limit Internet network investments. Ars Technica's Jon Brodkin discovered the source of the bill, the Kansas Cable Telecommunications Association:

That's a lobby group with members such as Comcast, Cox, Eagle Communications, and Time Warner Cable. The bill was introduced this week, referred to the Committee on Commerce, and scheduled for discussion for Tuesday of next week.

That hearing will now be delayed as the cable lobbyists strategize on a bill that less transparently serves only their interests. As usual, we see the cable lobbyists claiming that municipal networks use taxpayer dollars, despite the reality that most do not.

Much of what I see in Kansas points to Time Warner Cable being behind this - a lame attempt to stop Google Fiber using lobbying power rather than innovating and investing. However, the bill has tremendously negative implications for rural Kansas because local governments are often the only entities that care if their communities have the Internet access they need in the modern economy.

It stretches credulity to think Kansas would pass a bill that would prevent Google from expanding its network in the region. But we have seen a number of states (ahem, North Carolina) pass cable-authored bills that prevent communities from building fiber optic networks if they have anything faster than dial-up available in even part of town.

The cable lobby would consider it a win if they can still push a bill through that would kill municipal networks while allowing approaches like Google Fiber and Wicked (in Lawrence) to expand.

Fortunately, Google has a history of opposing restraints on local authority to build networks and it is part of a business coalition opposing this bill. As with most Americans, that coalition believes any decision on whether a network is a wise investment should be made locally, not in Topeka or in DC.

Craig Settles' had a Chanute official on the Gigabit Nation audio show to discuss the bill and impact on rural Kansas:


Online Internet Radio at Blog Talk Radio with cjspeaks on BlogTalkRadio

Others writing about this bill and negative impact on Kansas included Karl Bode at Broadband Reports, the Consumerist, Newspoodle, and Daily Kos.

And finally, Chanute created a video about this bill:

Video: 
See video

Kansas Legislature Introduces Bill to Limit Internet Investment

Get updates to this story here.

With Senate Bill No. 304 [pdf], the Kansas Legislature will consider a bill to revoke local authority to build networks. If passed, this bill would create some of the most draconian limits on building networks we have seen in any state.

The language in this bill prohibits not only networks that directly offer services but even public-private partnerships and open access approaches. This is the kind of language one would expect to see if the goal is to protect politically powerful cable and telephone company monopolies rather than just limiting local authority to deliver services.

The bill states that the goal is to

encourage the development and widespread use of technological advances in providing video, telecommunications and broadband services at competitive rates; and ensure that video, telecommunications and broadband services are each provided within a consistent, comprehensive and nondiscriminatory federal, state and local government framework.

Yet the bill does nothing but discourage investment, with no explanation of how prohibiting some approaches will lead to more investment or better services. It does not enable any new business models, rather it outlaws one possible source of competition for existing providers.

The bill contains what will appear to the untrained eye to be an exemption for unserved areas. However, the language is hollow and will have no effect in protecting those who have no access from the impact of this bill.

The first problem is the definition of unserved. A proper definition of unserved would involve whether the identified area has access to a connection meeting the FCC's minimum broadband definition delivered by DSL, cable, fiber-optic, fixed wireless or the like. These technologies are all capable of delivering such access.

However the bill also includes mobile wireless and, incredibly, satellite access. As we have noted on many occasions, the technical limits of satellite technology render it unfit to be called broadband, even if it can deliver a specific amount of Mbps. Satellite just does not allow the rapid two-way transmitting of information common to modern Internet applications. Mobile wireless comes with high costs, prohibitively low monthly caps, and often only works in some areas of a rural property. This is not a proper measure of having access to the Internet.

The second problem with the fake unserved exemption is the challenge of demonstrating an area meets it. If one suspected that a territory with over 90% of the residents did not meet the overly broad definition, one would have to engage in an expensive survey to prove it at the census block level. Data is not ordinarilly collected at that granular level - and even when it is, it is often based on unverified claims by existing carriers.

Even if anywhere in Kansas qualified as unserved under this definition, the cost of proving it would only add to the extremely high cost of building to such a low density population, breaking any business plan that could attempt it.

This is not the absolute most restrictive bill we have seen revoking local authority to build networks, but it is second. It does allow communities to build networks for public purposes, including schools, which is the differentiator in this case.

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These types of bills make a mockery of our political system. Whether to invest in essential infrastructure (or how to) is a decision that should be made at the local level, where people know how their unique mix of assets and challenges relate to ensuring everyone has fast, affordable, and reliable access to the Internet. There is no need for the state or federal authority to overrule local decision-making. The only reason we see it popping up in state after state (most recently Georgia) is because powerful cable and telephone companies want to ensure they face no competition - even in the most rural areas of the country.

This is not a matter of taxes. As we note in a recent fact sheet, most community networks have not used taxpayer dollars. Meanwhile, the cable and telephone companies have a history of benefits from the public sector, from ongoing subsidies to having built their networks originally as monopolies protected from competition.

For those new to this issue, I highly recommend our fact sheets on community networks, videos, and our interactive map of community networks.

We have covered many stories in Kansas over the years, including the network in Chanute that has helped many local businesses (see our case study) and a more recent investment by the city of Ottawa.

We will provide ongoing coverage as this bill moves forward.

The Challenge of Open Access - Lessons Learned Part III

To finalize our series on reflections from Seattle and Gigabit Squared, I discuss open access networks and how the requirement that a network directly pay all its costs effectively dooms it in the U.S. Read part one here and part two here. I started this series because I felt that the Gigabit Squared failure in Seattle revealed some important truths that can be glossed over in our rush to expand access to fast, affordable, and reliable Internet connections.

The benefits of public-private-partnerships in these networks have often been overstated while the risks and challenges have been understated. We have seen them work and believe communities should continue to seek them where appropriate, but they should not be rushed into because they are less controversial than other solutions.

Sometimes we have to stop and remember that we will live for decades with the choices we make now. It was true when communities starting building their own electrical networks and is still true today. I hope the series has provided some context of how challenging it can be without removing all hope that we can stop Comcast, AT&T, and others from monopolizing our access to the Internet.

In this final piece, I want to turn to a different form of partnership - the open access network. I think it follows naturally as many in Seattle and other large cities would be more likely to invest in publicly owned fiber networks if they did not have to offer services - that being the most competitive, entreprenuerial, and difficult aspect of modern fiber networks.

Chattanooga construction

The desire to focus on long term investments rather than rapidly evolving services is a natural reaction given the historic role of local governments in long term infrastructure investments. Fiber certainly fits in that description and as many have noted, the comparison to roads is apt. An open access fiber network allows many businesses to reach end users just as roads allow Fedex, UPS, and even the Post Office, to compete on a level playing field.

In an open access approach, the local government would build the network out to connect all residents and businesses but not directly deliver services. Instead, multiple independent Internet Service Providers (ISPs) would compete on the network for business, ideally specializing in different niches - some providing great video game optimizations and others focusing on meeting small business needs.

Unfortunately, there are reasons we have not seen this approach gain widespread traction. The model is more difficult than is readily apparent.

A large part of the difficulty comes from incumbent providers that refuse to use the fiber network. The cable and the telephone companies claim that they don't want to abandon their assets, but that is not the main reason they have refused to participate in these networks. The big cable and telephone companies know that they have terrible reputations and would be slaughtered in a competitive market - so they put great effort in ensuring that they face as little competition as possible. Allowing the open access market to develop would all but ensure mighty Comcast would have to compete against local providers that offer much better customer service, lower prices, and more.

From an economic perspective, an ideal open access network would be one physical fiber network on which all ISPs compete. With a take rate over 80 percent, the revenue would likely be sufficient to pay the costs of building the network, operating costs, AND the ISP costs. But because the cable and telephone companies have fought against open access, subscribers are often split among three different physical infrastructures (cable, copper telephone lines, and the fiber network), generating too little revenue to pay the costs of building the fiber network.

If a major metro area does a feasibility study to build a citywide open access network fiber, it will find that the network will almost certainly not pay for itself using a conventional private sector accounting system. The interest on the debt required to build the network accrues faster than revenue. Of course, the roads and bridges don't pay for themselves via user fees either, but we still invest in them.

Community BB Logo

In a recent podcast, we discuss how over the first five years, a network can save more in aggregate for the community that it costs to build. But those benefits acrue individually to households. Thus far, very few communities have used this approach - to raise monthly taxes by $3 to save $10 on household telecom bills, for instance. Leverett is a rare example of this approach.

That does leave another option - building an open access network incrementally, as Danville has done in Virginia and Palm Coast FiberNet in Florida, among others. This is a viable option for just about any community but comes with the difficult reality that connecting everyone could take decades. And there are still other gotchas.

Some communities that wanted to build an open access network have found it can be challenging to find service providers that will operate on the network. Sometimes a local ISP can step up, as in Danville and in other cases, but not always. Until a network has thousands of potential subscribers, ISPs may not be interested in offering services. But incremental approaches will often start with just tens or hundreds of subscribers.

We have written elsewhere of how important it is to have at least one strong, trusted provider on the network. An important lesson from Provo, among other places, is the difficulty in recovering once a network has a bad reputation. A bad provider can ruin the name of a perfectly good network, especially as most people will not know whether to attribute any problems to the physical network or ISP.

UTOPIA Logo

All of that said, open access offers a tremendous promise. Networks like UTOPIA and Chelan PUD (Washington) have been unable to pay the capital cost of building the network solely from revenues but offer some of the fastest speeds in the nation at a fraction of the price we pay elsewhere. I recall the testimony of a local business to the Utah Legislature who basically said, "Yeah, my taxes went up a little -- but my monthly telecom bill went down a lot."

Nonetheless, nearly every municipal fiber network has been built and financed with the expectation that it would pay for itself - generally breaking even years after the high upfront investments have been made. Each community should be free to choose what expectations it has in building the network it needs to ensure a vibrant economy and high quality of life for everyone. Our role has been to help them understand that choice and push back on those who want to take it away. I hope this series helps in that effort.

Many of the municipal fiber networks that now directly provide services started with a hope of working with a local partner or building an open access network. As they considered their options, they found they effectively had to choose between doing nothing and venturing into a very challenging business.

There are few easy answers for communities stuck with subpar Internet access, or even for those that regard "par" as unacceptable. When Lafayette Mayor Joey Durel was presented with the idea of a municipal fiber network shortly after taking office, he was skeptical. But he ultimately decided they should examine it - saying "shame on us" if they didn't at least see what they could do. Maybe they would hit a brick wall... or maybe they would build one of the most impressive broadband networks in the country. That was good advice.

No one solution works for every community. Thus our guiding philosophy: communities should be free to choose for themselves the solution they prefer.

Construction photo courtesy of Chattanooga Electric Power Board

Circuit Court to FCC: You Can Restore Local Authority to Build Community Networks

As we noted yesterday, the DC Circuit of Appeals has decided that the FCC does not have authority to implement its Open Internet (network neutrality) rules as proposed several years ago.

But the court nonetheless found that the FCC does have some authority to regulate in the public interest, particularly when it comes to something we have long highlighted: state barriers to community owned networks. For example, see North Carolina and recent efforts in Georgia.

States have been lobbied heavily by powerful cable and telephone companies to create barriers that discourage community owned networks. Nineteen states have such barriers (see our map with the states shown in red), largely because communities have nowhere near the lobbying power of massive cable and telephone companies, not because the arguments against municipal networks are compelling.

For those who remember a certain Supreme Court decision called Nixon v Missouri, the Court has once weighed in the matter of state barriers to community networks. In the '96 Telecom Act, Section 253 declares "No State or local statute or regulation, or other State or local legal requirement, may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service."

However, the Supreme Court decided in 2004 that Congress was insufficiently clear in its intent to preempt state authority - that "any" did not mean "any" but rather meant something else. In making this decision, it ignored a legislative history with plenty of evidence (see Trent Lott for instance) that suggested Congress meant "any" to mean "any."

ANYway, we lost that one. States were found to have the right to limit the authority of communities to build their own networks. But we have long felt that a different grant of authority gave the FCC the power to overrule state limits of local authority to build networks, Section 706.

Preemption Map

And this is where yesterday's decision comes in. Circuit Judge Silberman concurred in part and dissented in part - but more importantly for us, he explained Section 706. Read along with your own copy from here [pdf].

The statute directs the Commission to “encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans . . . by utilizing . . . price cap regulation, regulatory forbearance, measures that promote competition in the local telecommunications market, or other regulating methods that remove barriers to infrastructure investment.”

As I said, we have long felt the FCC had the power to remove state barriers that limit local authority to build fiber networks under its section 706 authority but we did not know whether the courts would read it in the same way. In describing the difference between its authority to promote competition vs. its power to remove barriers to infrastructure investment, he notes:

An example of a paradigmatic barrier to infrastructure investment would be state laws that prohibit municipalities from creating their own broadband infrastructure to compete against private companies.

The footnotes cites this Wired article for further information. It's "kind of a big deal."

We now have a clear roadmap: Section 706 gives the FCC the authority to remove barriers to infrastructure investment and to promote competition. Restoring local authority to build networks achieves both. The Nixon v. Missouri decision is irrelevant, based on a different section of law. And we have plenty of evidence that when allowed to build their own networks, communities can do a wonderful job... that is what we have been documenting for years.

Seattle, Gigabit Squared, the Challenge of Private Sector Cable Competition

This the second in a series of posts exploring lessons learned from the Seattle Gigabit Squared project, which now appears unlikely to be built. The first post is available here and focuses on the benefits massive cable companies already have as well as the limits of conduit and fiber in spurring new competition.

This post focuses on business challenges an entity like Gigabit Squared would face in building the network it envisioned. I am not representing that this is what Gigabit Squared faced but these issues arise with any new provider in that circumstance. I aim to explain why the private sector has not and generally will not provide competition to companies Comcast and Time Warner Cable.

Gigabit Squared planned to deliver voice, television, and Internet access to subscribers. Voice can be a bit of hassle due to the many regulatory requirements and Internet access is comparatively simple. But television, that is a headache. I've been told by some munis that 90% of the problems and difficulties they experience is with television services.

Before you can deliver ESPN, the Family Channel, or Comedy Central, you have to come to agreement with big channel owners like Disney, Viacom, and others. Even massive companies like Comcast have to pay the channel owners more each year despite its over 10 million subscribers, so you can imagine how difficult it can be for a small firm to negotiate these contracts. Some channel owners may only negotiate with a provider after it has a few thousand subscribers - but getting a few thousand subscribers without good content is a challenge.

Many small firms (including most munis) join a buyer cooperative called the National Cable Television Cooperative (NCTC) that has many of the contracts available. But even with that substantial help, building a channel lineup is incredibly difficult and the new competitor will almost certainly be paying more for the same channels as a competitor like Comcast or Time Warner Cable. And some munis, like Lafayette, faced steep barriers in just joining the coop.

FCC Logo

(An aside: if we are going to pretend that competition can work in the telecommunications space, Congress and/or the FCC have to ensure that small providers can access content on reasonable terms or the ever-consolidating big providers will be all but unassailable by any but the likes of Google. Such regulations should include rigorous anti-monopoly enforcement on a variety of levels.)

Assuming a new provider can secure a reasonable channel lineup, it now needs to deliver that to the subscribers and this is more complicated than one might imagine. From satellite dishes to industrial strength encryption to set-top boxes, delivering Hollywood content is incredibly complicated.

When confronted with this challenge for its Kansas City network, Google evaluated all the options and decided the only option was to build its own technology for delivering television signals to subscribers. Google has the some of the best engineers on the planet and even they encountered significant challenges, suggesting that route is ill-advised for new companies. Even if Google were willing to share their approach, it was written for the Google eco-system and would need significant porting to work for other firms.

Several of the recent triple-play municipal FTTH networks used Mediaroom, a technology developed by Microsoft that was recently sold to Ericsson, which has strong connections with AT&T. All of which suggests that delivering television channels is not becoming easier for small, local networks.

From the tremendous challenges of securing television channels to the difficulty of delivering them to subscribers, investors are aware of the mountain a new entrant has to climb before even starting to compete with a massive firm like Comcast.

Longmont Power and Communications Logo

It remains to be seen whether a network delivering only Internet access (or with telephone as well) will succeed today, but most have believed that television is needed to effectively compete for subscribers (and generate enough revenue to pay for the network). Longmont is bucking that wisdom in deploying a gigabit and phone network throughout its footprint north of Denver and many are watching intently to see how it fares (our coverage here).

The main lesson from Part II of our Seattle Gigabit Squared analysis is the difficulty of a small firm competing against a massive cable company like Comcast and the subsequent reluctance of most investors to fund such firms.

This is not to say it is impossible for small entities to compete, especially entities that can handle a distant break-even point or justify its network by the many indirect benefits created by such an investment - including more jobs, lower prices for telecommunications services, and improved educational opportunities to name three (see our recent podcast on this subject). In most cases, the kinds of entities that are willing to include indirect benefits on their balance sheets in addition to cash revenues are nonprofit entities.

We strongly support the right of communities to decide for themselves how to ensure their residents and businesses have the connections they need to thrive in the 21st century. We also recognize that many cities, particularly the larger metro areas, would prefer not to directly compete with some of the most powerful firms on the planet, even if they are also tops among the most hated. Few local governments relish the opportunity to take on such a new challenge and understandably search for firms like Gigabit Squared that can assist them, reduce the risks of building a network, and shield them from charges of being godless communists by think tanks funded by the cable and telephone companies.

However, we are not optimistic that many communities will find success with this public-private-partnership approach. Indeed, with recent news suggesting that Gigabit Squared left at least $50,000 in unpaid bills behind, the risks of going with such a solution may indeed be greater than previously appreciated.

It is for the above reasons that we continue to believe most communities will be best served by building and operating their own networks, though some may choose to do so on an open access basis where multiple ISPs operate on the network.

That is where we will turn in the final segment of this series. Read that post here.

Justifying a Network with Indirect Cost Savings - Community Broadband Bits Episode 80

Today, Lisa and I are joined by Eric Lampland for a discussion of how a community could justify building a community owned network from the indirect benefits that it would create, including the savings that each household realizes from competition driving down prices. Eric Lampland is the CEO and principal consultant of Lookout Point Communications, which helps local governments that are building a network or considering an investment.

Eric and I start by discussing how quickly the cost savings per household add up to equal more than the cost of building a network and we digress from there, covering other topics related to community owned networks. This includes how big cable companies would respond to this approach.

I have to note that most community networks have not been justified on this basis - the vast majority of community networks were designed to pay their full costs and they are doing so. Here, we discuss the general benefits of these networks that are often sidelined in the policy discussion and how they alone may justify a fiber network.

Toward the end, we begin discussing open access, something we will likely return to in the future as Eric has long both advocated for open access and has some insights into the technical challenges of building such a network.

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 25 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed.

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

Thanks to Haggard Beat for the music, licensed using Creative Commons.