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Responding to "Crazy Talk" Volume 4 - Community Broadband Bits Episode #72

We are back with the fourth volume of our responding to "Crazy Talk" theme on the Community Broadband Bits podcast. The source of this week's crazy talk is a public relations executive for Time Warner Cable, following an interview I did on WUNC in North Carolina.

Lisa Gonzalez, myself, and our colleague John Farrell react to some of the claims made to discuss what you should know about community owned networks and broadband policy more generally.

We talk about misleading statistics, lies about how local governments fund networks, and whether Time Warner Cable or local utilities pay more in taxes.

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 23 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 Mudhoney for the music, licensed using Creative Commons.

Longmont Referendum: Haven't We Been Here Before?

November 5th probably seems like deja vu for the people of Longmont, Colorado. For the third time, the voters will respond to a ballot question that will impact their community's connectivity. Past referendums addressed whether or not the community could use its fiber ring for connecting businesses and residents.

They now have that authority. This year the question will be "when?"

Local incumbent providers grossly outspent municipal network supporters in 2009 and in 2011 with astroturf campaigns against referendums. Nevertheless, voters decided in 2011 to grant the local utility permission to use existing fiber resources to bring connectivity to businesses and residents. 

Since then, Longmont Power and Communications (LPC) began a slow build-out of fiber to businesses and homes within 500 feet of the existing loop. Local businesses, frustrated with poor service from Comcast and CenturyLink, jumped at the opportunity to have real high-speed connections. With a long list of businesses in queue for their connections, the City Council voted to use LPC reserve funds to connect businesses and residents to the loop. Clearly, the people of Longmont were ready for something better than the existing incumbent services.

Local blogger Steve Elliott connected to the service in September. To satisfy his curiosity, he ran speed tests immediately before and after he transitioned from Comcast service.

Comcast timed in at 26.08 Mbps download and 5.76 Mbps upload. LPC provided 89.99 Mbps download and 62.01 Mbps upload

From his post:

I also timed downloading movies on Netflix on my TV. Before, I could run upstairs, get an adult beverage and be back in my chair before the movie loaded. Now – if it takes 10 seconds – it’s a really long movie. 

Thumbnail of comic strip

After a month with LPC fiber and new computer system, Elliott ran more speed tests. Results topped out at 739.66 Mbps download and 534.75 upload for LPC Fiber.

Elliott also compared prices:

Comcast: $71.95 per month ($863.40 per year)

LPC Fiber $49.95 per month ($599.40 per year)

We compared Comcast to Longmont fiber in this entertaining comic strip.

Elliott is not the only Longmont resident who wants to connect to LPC fiber. Calls to "get it done" from residents and businesses did not fall on deaf ears at the May Longmont City Council meeting. The Council voted unanimously to bring fiber to every resident and business that wants it. Next, community leaders and LPC investigated financing. The reserve fund, developed from years of dark fiber lease revenue, could pay for the expansion but the project would drag out over a decade.

Rather than see the project finished in more than ten years, the community can become entirely connected within three years with a $44 million revenue bond issue. LPC will use $35.4 million as capital to build out the network and the remaining as reserve for debt-service. State legislation sponsored by USWest from 2005 imposed the referendum requirement on local communities; the voters must decide. USWest became Qwest became CenturyLink.

The Times-Call reproduced the 2B Ballot Question language:

"Without raising taxes, shall city of Longmont debt be increased in an amount not to exceed $45,300,000 by the issuance of revenue bonds for the purpose of financing fiber optic system capital improvements to provide high-speed broadband service, including but not limited to internet, voice and video services; and shall the bonds be paid solely from the city's electric and broadband utility enterprise revenues and be sold in one series or more at a price above, below or equal to the principal amount of such Bonds and with such terms and conditions, including provisions for redemption prior to maturity with or without payment of a premium of not more than 3%, as the city council may determine?"

Friends of Fiber in Longmont

Unlike past referendums, gigantic telecom providers have not spent large amounts of cash to fuel misinformation campaigns this time. Local citizen group, Friends of Fiber, is prepared to face-off against Comcast and CenturyLink. From a Times-Call article:

"It's as baffling to us as it is to you," said Scott Converse of the pro-2B group Friends of Fiber, which had been expecting to see another large push by the telecom companies. So far, he said, the only "anti" activity anyone in the group had seen was a telephone poll in September by Frederick Poll, a Virginia-based firm.

"We're wondering if maybe there's going to be a push near the end," Converse said. "I can't imagine why they're waiting."

The silence is welcome but a little eerie.

The City provides a PDF brochure on Ballot Question 2B that addresses many common questions. For more about the measure and the benefits springing from the network, listen to Chris' interviews with LPC's Vince Jordan. In the Broadband Bits podcast, Episode #10, Jordan describes the challenges LPC Fiber faced. Episode #68 deals with the upcoming referendum. Chris talks with Jordan and George Oliver from Friends of Fiber.

Update: In a letter to the editor, George Oliver wrote:

We have been providing our own electricity for more than 100 years and our rates are among the lowest in the nation. The same will be true if we expand our own fiber network. Because Longmont Power & Communications is a not-for-profit agency of the city, our low rates and network availability will help to retain and attract businesses to our city. This is the kind of visionary investment that will pay big dividends down the road.

WUNC Radio Show Explores Muni Network Restrictions in North Carolina

WUNC, a public radio station out of Chapel Hill in North Carolina, covered community owned networks and broadband availability on its recent "State of Things" midday program. I was a guest along with a local resident and a public relations executive from Time Warner Cable to discuss North Carolina's broadband compared to other states and its law that effectively bans local governments from building networks.

The discussion is good, though I certaily could have done a better job. Ultimately I thought the host did a good job of bringing in each guest to make their points, though Time Warner Cable was totally unprepared to talk about how North Carolina can expand access. Instead, they talked about the cable giant's requirements to invest in networks in rural areas.

We are going to follow up on these points but for now wanted to make sure you have a chance to listen to the show. Our coverage of the bill discussed in the radio show is available here.

New Comic: Longmont Fiber Crushes Comcast's Cable Outhouse

Longmont Power and Communications, a city-owned utility north of Denver in Colorado, is slowly rolling out a FTTH network to local businesses and residents that are in close proximity to its existing fiber loop. They are offering a symmetrical gigabit of Internet access for just $50/month.

Longmont Fiber Comic Strip

Download this comic as a pdf. Sign up for our one-email-per-week newsletter with ongoing coverage of community owned networks.

The local newspaper notes that some local businesses have already signed on, including a clinic:

Jurey said the city's network is three times faster than the speeds the clinic got before at a cost savings of $1,600 a month.

On November 5, citizens will decide a referendum on whether to expedite the building by issuing revenue bonds without increasing local taxes. A brochure explaining pro and con is available here [pdf]. Approving the bonds means building the network to everyone in a few years while not approving it will mean building the network over several decades.

We recently did a podcast with Longmont Power and Communications Broadband Services Manager Vince Jordan and a local citizen campaigning for the referendum. Listen to that show here.

Read the rest of our coverage about Longmont here.

Franklin County, Alabama, Task Force Investigates Internet Options

In a reminder of just how poor telecommunications can be in this country, Franklin County in rural northwest Alabama has formed a Task Force to investigate how it can get something better than dialup.

“The Internet has become an important as having electricity and water,” said Cole, an extension agent in Franklin County. “For our businesses to attract customers and to attract other businesses to come in here, we have to have broadband Internet access.”

But it turns out that they don't even have access to modern telephones in some instances:

Some Franklin County residents have access to dial-up Internet, which is slower than broadband high-speed Internet service. However, some Franklin residents still have a “party line” for phone service.

Who has refused to invest in these exchanges? AT&T is the major provider in the area (followed by CenturyLink) and it came to a Task Force meeting to talk about what "needs to be done to bring high-speed Internet to the county."

Unfortunately the report doesn't note what the ideas were but we would be surprised to learn it doesn't involve some form of federal or local subsidy to get AT&T to invest in this area. There is not much profit to be made, so AT&T is more likely to push these people into expensive 4G LTE wireless solutions than anything that would compete with modern connections.

This is not the first such meeting - as noted by a previous article:

Commission Chairman Barry Moore said meetings were previously held to discuss the lack of high-speed Internet, but nothing materialized.

When it comes to local governments solving their problems by investing in themselves, AT&T falls over itself to stop them - even if it means an area will remain unserved.

We read of a conservative Republican holding out hope for federal grants to subsidize such a project.

In addition, Kreg Kennedy, a district field representative for U.S. Rep Robert Aderholt, R-Haleyville, discussed the possibility of federal grants to help get the project underway.

It is a fascinating situation when AT&T angling for taxpayer money from the federal government is seen by many as the "private sector" in action while local governments building networks without any use of taxpayer dollars (as the vast majority are) is cast as an illegitimate intervention in the sacred market.

Solving problems locally whenever possible is a wiser decision. When it comes to better access to the Internet, local governments should be investing in their own community, not trying to bribe companies to expand that have a history of terrible customer service and reluctance to invest in next-generation networks.

If Franklin County really wants to solve its problem, it should look to the community networks in Tennessee or the new network in Opelika, Alabama.

Jim Baller Returns for Vol 3 of Muni Network History - Community Broadband Bits Episode #67

We are excited to continue our history series with Jim Baller of the Baller Herbst Law Firm. This is Jim's third time on the program, having joined us for Episode 57 and Episode 63.

We continue our discussion with a recap of the events of 2004, including Jim's work with Lafayette to find a compromise to the ALEC bill that would have effectively banned municipal networks in Louisiana and the Verizon-led campaign to prevent Pennsylvania communities from following the muni fiber path of Kutztown.

We discuss several of the state battles over the years and the near passage of the Community Broadband Act by the U.S. Congress. Also, how some of the big telecom carriers started to invest in FTTH after the model was proved by community networks. We'll have Jim back for future shows as we continue charting the history of community owned networks.

Read the transcript of our conversation 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 23 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 Break the Bans for the music, licensed using Creative Commons.

Monticello Fiber Price War Offers Key Lessons for Broadband Competition

Monticello Minnesota may be located 40 miles outside Minneapolis, but it is the center of the planet when it comes to FTTH competition. We have tried and cannot identify another community localed on planet earth with two separate FTTH networks going head to head across the entire community.

We have long written about Monticello, most recently to look at hypocritical criticism of the project (which gives me an opportunity to note a similar dynamic in Lafayette, Louisiana). And we have covered the disappointing news that the network has not produced enough revenue to make full bond payments.

Short explanation for how Monticello came to be unique in having two FTTH networks: Monticello had poor Internet access from Charter and telephone company TDS. Each refused to invest after local businesses and elected officials implored for better networks. Monticello started building its own FTTH network (Monticello FiberNet) and TDS sued to stop the project while suddenly decided to upgrade its slow DSL to fiber. Lawsuit was tossed out and Monticello finished its network.

In most community fiber networks, the DSL provider seems to fade away because it cannot offer the fast speeds of fiber or cable, so the market basically remains a duopoly with the community network replacing the telephone company (which continues to offer cheap, slow DSL to a small number of customers). But in Monticello, Charter and TDS engaged in a price war, which has really hurt the City's ability to generate enough revenue to pay its debt.

Price wars are very hard on new market entrants because they have to amoritze the cost of their investment whereas the incumbents often have already done so. This means incumbents can almost always offer lower prices if they are determined to do so.

In many communities, we have lacked clear evidence of predatory pricing - that is pricing below the actual cost of service to run competitors out of business. This would violate federal law (if any agency bothered to enforce it). Charter gave us that evidence in Monticello.

Since then, the deals have remained amazing in Monticello, far surpassing what cable-funded crazy people in DC pretend is competition between DSL and cable in the majority of the country.

TDS is now offering a deal that far surpasses anything available in the Minneapolis/Saint Paul metro - over 190 channels (including DVR and HD), 50 Mbps Internet (50 down, 20 up I believe), and telephone for $70/month for one year with no contract. The price goes up after year one, but doesn't go back to full price until after year 2 ... at which point you will likely get another deal if there are still more than 2 high speed choices in the market.

TDS Advertisement

TDS is also regularly running full page advertisements regularly in the local newspaper. How many local newspapers would love to see regular big-ad buys like this one? If enough communities build networks, perhaps the resulting advertising bumps will help local newspapers stay in print!

Charter has gone beyond newsprint and static billboards with a big truck advertising Monticello residents a free DVR that will save them $650/year (which is phrased in a way that makes you think they are charging WAYYYY too much for DVRs!).

Charter Advertising Truck

These advertising strategies are in addition to many door-to-door sales people from both TDS and Charter. Both are boosting local employment opportunities for these sales people far beyond what they would do absent Monticello FiberNet.

Existing Charter customers outside of Monticello might be interested in how cable promos in Monticello compare to in their communities where there is no real competition for the cable giant. Here is an 8 page glossy advertisement they have been using [pdf].

Charter is also going after small businesses with a 30 Mbps asymmetrical package for $55/month when bundled with business phone. I can only imagine how many businesses in areas without a real choice would like that deal.

Monticello FiberNet Biz Services

Charter Small Biz Advertisement

However, the Monticello FiberNet business service is far superior, particularly as it is symmetrical and fast upstream makes a huge difference for local businesses. Business services from the city owned FiberNet starts 10 Mbps symmetrical at $41.95 and the list sheet tops out at 100 Mbps for $350/month.

Update: Fibernet Business Services prices have decreased on the faster Internet connections. 30 Mbps symmetrical is $99/month and 100 Mbps symmetrical is $199/month.

We don't have enough information to compare what it would cost a business to connect multiple sites with point to point gigabit links, but we would guess there could be more than $1,000 savings each month from such a service based on FiberNet pricing vs Charter or TDS.

Going through all these deals, a few things have become apparent.

First, DSL and cable are not engaged in real competition. Adding a third player really changes the market in ways that satellite and 4G wireless Internet do not.

Second, most of the competition from the big corporations is aimed at taking subscribers from rivals by temporarily lowering prices rather than attempting to keep their own subscribers happy with their services. Most of the deals are only available to new customers, incentivizing households to regularly switch providers, which is costly to all competitors (churn). Community owned networks by contrast tend not to offer these short term promo deals and invest in keeping existing subscribers happy.

Third, the strategy of TDS and Charter would not be possible if they were not cross-subsidizing from distant, non-competitive markets. They may not be losing money on all the customers that take these deals, but the increased marketing costs and extremely low priced deals are aimed at driving a competitor from the market, not at merely preserving market share. Their ability to cross-subsidize (and the initial frivolous lawsuit) have damaged Monticello's business plan to the point where it has had to transfer public funds from the liquor store and negotiate with bond holders over a significant haircut.

And finally, whatever this network may end up costing city taxpayers, it will likely be less than the savings from all of these lower prices and indirect benefits such as not losing employers that could not be competitive when only having last-generation Internet access from unreliable DSL. That doesn't help the City to make its debt payments, but it sure makes Monticello a better place to live.

WindomNet Creates Jobs, Benefits for SW Minnesota - Community Broadband Bits Episode #64

The small town of Windom in southwest Minnesota has long been one of the smallest FTTH networks in the nation. I have long wanted to bring WindomNet General Manager Dan Olsen on our show because it has some of the best anecdotes in the world of community owned networks. We finally got him!

To understand WindomNet, you should know that it has fewer households than what many of us consider to be the minimum threshold for a viable triple-play FTTH network. Not only have they made it work, they have attracted numerous employers to town, as our interview discusses. It also kept a local employer located just outside of town in the area after a massive telelphone company operating in Minnesota found itself unable to provide the service that business requested. Tiny Windom ran a fiber out to the business and kept them in the region.

The network has expanded to nearby farm towns with the help of a broadband stimulus award. Even now, after bringing connections to a rural region that the big providers have largely ignored, the big cable and CenturyLink lobbyists that live in the capital in Saint Paul have relentlessly lied about Windom, calling it a failure and presenting skewed figures to suggest the investment had not succeeded.

In our discussion, Dan and I explore the reality of WindomNet and how it is benefiting a much larger region beyond its own borders. Read all of our coverage about Windom here.

Read the transcript for this show 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 18 minutes long and can be played below on this page or subscribe 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 Break the Bans for the music, licensed using Creative Commons.

Countering Crazy Talk, Volume 3, for Episode #62 of Community Broadband Bits Podcast

Lisa Gonzalez and I are back with another back and forth reaction to some of the crazy claims made by opponents of community owned Internet networks. This is something we started with Episode 50 and continued in Episode 55.

For volume 3 of our Crazy Talk series, we address some recent claims made in opinion pieces, including the obviously-written-by-a-lobbyists op-ed in the Baltimore Sun and signed by Maryland State Senator Pugh.

We talk about claims that Chattanooga has failed (in which we recommend you go back to listen to episode 59 - our conversation with Chattanooga.

We dissect the claims that the US already has robust competition and that having several 4G wireless networks in any way impacts the wireline cable and DSL the vast majority of Americans are stuck with it.

And finally, we talk about Provo and why it is suddenly the most cited network by those opposing community owned networks.

Read the transcript 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 20 minutes long and can be played below on this page or subscribe 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 Break the Bans for the music, licensed using Creative Commons.

Locally Owned Networks Protect Privacy and Limit Consumer Surveillance

Since the story broke about the NSA domestic spying practices, debate among concerned citizens has revolved around the Big Brother surveillance model. Most of us shudder at the thought of our federal agencies from DC watching, noting, and recording our actions. However, there is another type of Internet surveillance that largely escapes notice and likewise threatens our liberty. 

Both types of surveillance are perversely encouraged by a poorly regularly market that allows big corporations to profit from violating our privacy.

We have long known that our online habits are being recorded and combined with other personal data that allows companies to show us personalized ads. But Free Press recently offering a compelling explanation for how this model can harm us. From the Dana Floberg article:

And about those “personalized ads” — this isn’t about Facebook learning you prefer Coke over Pepsi. This is about corporations targeting us where we’re vulnerable. This is about your Latina neighbor who sees ads for risky high-interest credit cards. This is about your cousin who just got laid off and now sees ad after ad selling him dangerous fast-cash offers and subprime mortgages. This is about your friend who lives in a rougher part of town and sees higher prices whenever he shops online. This is about all of us.

These ads aren’t personalized — they’re predatory.

Floberg goes on to describe how shopping sites alter prices based on income and location so more affluent shoppers can access better prices and coupons. These sites both use and reinforce stereotypes as they take advantage of the most vulnerable in our society.

Without laws to protect consumers, there is little we can do to stop this predatory behavior. Just as the market encourages corporations to violate our privacy to sell its goods, big corporations are also profiting in their work with law enforcement at all levels.

An AP article by Anne Flaherty notes that AT&T charges $325 to activate a wiretap and $10 per day to maintain it. Verizon charges the government $775 for the first month and $500 per month after that to continue it. It is hard to believe these charges are in line with actual costs. 

Meanwhile, the other massive providers are undoubtedly aware of what allegedly happened when Qwest CEO Nacchio refused to help the NSA illegally spy on Americans - the NSA cancelled a lucrative contract with Qwest. This provides a major disincentive to follow the law, particularly when they can expect retroactive immunity after violating the law for years.

What would become of any provider who dared to say "no" to the NSA? We found out when Xmission, serving consumers via UTOPIA said "no" - absolutely nothing happened. No fearful complicity at local Xmission. Xmission is focused on serving its customers, not Wall Street.

Massive corporations collect information from millions of customers; the more data, the higher the value. Even if a municipal network tried to collect and sell private data, the opportunity to profit would be limited because their reach is localized. 

Community owned networks, whose focus is on serving the community rather than maximizing profit, have no reason to collect and sell data. In fact, it is a revenue source to avoid. With a local customer base and more accountability, selling data would violate the trust that gives their brand a competitive edge. When it comes to protecting privacy, supporting smaller scale providers that are rooted in the community is a far better protection than anything Washington, DC, can or will provide.

AT&T and American Eagle spying image created by the Electronic Frontier Foundation and available via Wikimedia Commons.