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Whitewater Weighs Options for Municipal Broadband

Whitewater, Wisconsin, a city of just under 15,000 people that sits midway between Madison and Milwaukee, is considering its options for establishing a municipal broadband utility. As reported by the local Daily Union newspaper, members of the city council, the community development authority, other local bodies, and the public met this week to hear a feasibility presentation and discussion with Anita Gallucci, a Wisconsin attorney specializing in broadband utilities.

Whitewater already has some public fiber optic infrastructure, having gone live with their gigabit-capable Whitewater Unified School District network last fall. The network joins up with a larger fiber backbone on the nearby University of Wisconsin Whitewater campus, and has allowed Whitewater schools to increase their connection speeds by 1,200 percent while holding costs steady. The city is now looking at options for how to expand the opportunity brought by such high speed access to the broader community.

Tuesday’s meeting focused on two topics: the legal landscape for municipal broadband utilities in Wisconsin, and the varying levels of success that other Wisconsin cities have had with their own networks. On the legal front, Gallucci affirmed that “municipalities can get into the broadband business if they choose to do so,” but then went on to outline the hurdles created by Wisconsin law that make the process more challenging. From the Daily Union article:

Gallucci said that first, the city must prepare a formal report or feasibility study. The report must cover a three-year outlook which addresses revenues derived from constructing, owning, or operating the utility including such things as equipment, maintenance, and personnel requirements.

Given the upfront costs associated with building out a fiber optic network, a report focusing on a three-year outlook is unlikely to cast a favorable light on the project. Like any other significant investment in public infrastructure, municipal networks may take more than three years to break even. If we used that benchmark for roads, we wouldn't have many.

Wisconsin cities must also go through a public hearing and vetting process before voting on final authorization of a municipal utility. There is a shorter route on the books in Wisconsin, but one that effectively gives incumbents a veto:

Gallucci said that cities do not have to follow these steps in very specific circumstances, such as serving an area of the city that does not otherwise have service access; but cities must notify private companies (for example, AT&T, Verizon, or Charter Communications) of that project. However, if those companies say they currently, or plan to in the future, serve those areas, then the steps need to be followed.

It doesn’t take much imagination to guess what would happen if a city like Whitewater were to approach AT&T or Verizon and ask if they have any “plans to expand in the future” that might preempt the building out of a public network.

Wisconsin law is more obliging towards open access networks, according to Gallucci:

She said the steps could be avoided if the city acts as “a wholesaler of broadband services.” By this, she said, the intention would be to build the infrastructure and private companies would use those fibers to provide service.

“That would require the city itself to not provide any service to the end-user,” she explained.

While the legal environment in Wisconsin is generally unfavorable towards municipal broadband utilities, the meeting also highlighted some recent success stories. Reedsburg, which we wrote about here, was touted as the only Wisconsin city offering a “triple play” bundle through its broadband utility. Also mentioned was Sun Prairie, as fellow city seriously considering a FTTH network.

The next step will be for the Whitewater Community Development Agency to bring the issue before the City Council, which the city manager expected to happen “in the very near future.”  

Wisconsin Local Governments Collaborate for Schools, City, and County

Sheboygan County, the City of Sheboygan, and the Sheboygan Area School District (SASD) plan to collaborate to deploy a fiber network. According to an article in the Sheboygan Press, all three entities seek cost savings and higher capacity connections.

Approximately, 49,000 people live in the City of Sheboygan; there are 10,000 students attending SASD. Over 115,000 people live in the County located on the western shore of Lake Michigan.

The County, the City, and SASD will split the cost of constructing the ring, approximately $1.4 million. Each entity will then pay for laterals to connect its facilities to the ring. The total to construct the ring and connect each entities' facilities will be approximately $3.58 million. 

To build its laterals, SASD will pay $865,000. The District will save approximately $220,000 per year on connectivity fees, paying back the total investment ($1.4 million + $865,000) in about 10 years even without putting any value on the considerable benefit of much high capacity connections. When factoring in the reality that their connectivity fees would undoubtedly increase signficantly under the status quo arrangement and the much higher capacity connections, the payback period will be even shorter than 10 years.

The district is already providing a device for each student and its current connection is struggling to meet the demand. The state has a program, TEACH Wisconsin, which subsidizes the high cost of leasing connections from existing providers but given the high rates often charged by a company like AT&T, it can only go so far.

Wayne Eschen, information services coordinator, said the district pays about $220,000 per year for its online capacity...

“(TEACH Wisconsin) is limited,” Eschen said. “If you go beyond that, you pay full retail for it. We’ve exceeded the base that’s available to us and we’re now paying retail as well. As the need continues to increase, the retail cost goes up substantially.”

Meanwhile, the County now pays approximately $29,000 per year for just 25 Mbps Internet access. They estimate they will pay $9,000 per year for gigabit connectivity via the new infrastructure. We do not know how much the County currently pays for connectivity beyond Internet access but it will pay approximately $455,000 in one time fees to connect laterals to its 13 - 14 facilities.

The City has plans for its faster connections:

“What we want to do is look at different ways we can get them connected with high speed and yet have it cost-manageable,” [IT Director David] Augustin said. “If we go with those avenues (the current system), we’ll still never get the speed capacity that we would with fiber and yet we’d still have to pay the monthly charge.”

One thing the city is especially interested in is conducting some fire department training by video conference, which would require much faster speeds than they now have.

The City expects to pay approximately $664,000 to establish connections to a future network.

Apparently, a road project has inspired the partners to move forward this summer. They have determined that burying conduit as part of that project will reduce the costs by $400,000. They hope to have the network completed and lit by 2016.

Sun Prairie Ponders Fiber Network Investment in Wisconsin

The Sun Prairie City Council met on January 14th to discuss a possible investment in a municipal fiber network. Thank you to local resident Jonathan Kleinow for alerting us to developments in the south central Wisconsin town.

The Star published an article about the meeting in which The Motive Group presented information to the Committee of the Whole. According to the story, the consulting firm has been working with Sun Prairie Utilities for a year to find ways to improve local connectivity and spur economic development with fiber. The community is considering the possibilities of a triple-play FTTH network for the areas 30,000 residents.

Sun Prairie Utilities solicited responses to a community survey. They received 700 responses with 88% in favor of a fiber investment. 

From the article:

The recommended plan put for[th] by The Motive Group has a total cost of near $27 million, with $21 million of that as year-one capital expenditures to serve roughly 13,550 homes and businesses in the city.

Budgeted in the initial year's expense total is $11 million for aerial and underground construction and equipment.

Once the fiber system is operational and available for customers, [The Motive Group's Beth] Ringley said projections show $9.97 million in annual operating revenue by year 20 of the system to go along with expenses of $1.26 million.

By year 20, total assets are projected to be at $27.16 million, with total cash at $12.56 million.

Councilman Jon Freund commented that he was opposed to the idea at first but that he now believes Sun Prairie Utilities and the City could partner to distinguish the community. From the article:

“Technology has become a greater and greater need for both businesses and residents,” Freund continued. “This is an opportunity for us to basically differentiate Sun Prairie from all the other communities in Dane County.”

...

He added that fiber installation would “put Sun Prairie on the leading edge” for economic development and local and long-distance education opportunities.

Sun Prairie Wisconsin Logo

The Star also reported on Jaunary 25th that city officials want to provide ample opportunity to incumbents:

“The worst they can say is ‘No’ and we say ‘Thank you for your time‘ and we come back to this body and say we've ruled that out,” [Mayor John] Murray remarked.

Freund said he and others spoke Tuesday with Frontier representatives and the provider expressed little interest.

“It was a good conversation and certainly as we looked at partners they would be the most likely partner in the community, but it was pretty clear that they weren't interested in taking this project on themselves and providing us this service at no cost to the city,” Freund said.

City Council members plan to reach out to the people of Sun Prairie through informational meetings. The first is scheduled for March 4th.

“My hope is that we continue to put additional information out over the next month to continue to educate the public,” Freund said.

Sun Prairie is located about an hour southeast of Reedsburg, where the community has benefitted from a community network since 1998. Reedsburg recently began offering gigabit service for less than $300 per month.

A local news story notes that an existing beer distributor is already using the utility's fiber and it has been important to its business:

Wisconsin Gets a Gig in Reedsburg

The latest addition to the growing list of gigabit communities is Reedsburg, Wisconsin. For residential customers, the service is available for $274.95/month when bundled or $299.95/month standalone. The network has long delivered gigabit services to local businesses but the residential offer is new.

In a recent press release the Reedsburg Utility Commission (RUC) announced it now offers gigabit service to business and residential customers. From the press release:

“More and more businesses and homes need a faster connection to consume and produce large amounts of data.  Our gigabit network will accommodate those needs well into the future,” said RUC General Manager Brett Schuppner. “Offering gigabit broadband services is very rare in this country and I am proud to be part of a community that is so technologically advanced.  RUC strives to reach new levels of innovation with our 100% fiber optic network serving Reedsburg, Loganville, Lake Delton, and surrounding rural communities.”

Reedsburg is located approximately 55 miles northwest of Madison and is home to 10,000 residents. Reedsburg began dabbling in fiber optic infrastructure in 1998 to connect electric substations and provide Internet service to several public schools. The RUC provides water, electricity, and triple-play to the community. Community leaders took advantage of opportunities over the years to extend the reach of its network, including a 2010 American Recovery and Reinvestment Act (ARRA) award to expand the FTTH network.

AT&T Lobbying Likely to Increase Wisconsin School, Library Telecom Costs

The University of Wisconsin recently withdrew from its contract with WiscNet, threatening the future of the network. Stop the Cap! reports the University bowed under pressure from Republican lawmakers and threats of litigation from the likes of AT&T, CenturyLink, and the Wisconsin State Telecom Association (WSTA). Costly litigation could interrupt UW's research and educational work and UW must consider its relationship with the legislature and the future of state funding.

Once again Republican legislators chose the powerful telecom lobby over taxpayers. WiscNet is a buyer coop that allows schools and libraries to keep their telecom costs lower by working together. Weakening WiscNet means the schools and libraries may have to pay higher fees just to maintain the same level of service. 

The telecom industry makes generous contributions to most Wisconsin lawmakers, but Republicans in particular have been enthusiastic about knee-capping any perceived threat to AT&T's monopoly in much of the state. With WiscNet in the cross hairs, ALEC legislators in Wisconsin can expect renewed campaign support. Senator Paul Farrow and Representative Dean Knudson, spearheading efforts to dismantle WiscNet, receive sizeable donations from WSTA, CenturyLink and TDS Telecom.

If WiscNet cannot recover from the loss of UW, local taxpayers will be the ultimate losers as they have to pay more to keep essential institutions connected. WiscNet provides economical broadband service to members all across the state and ample evidence suggest higher rates accompany private service. From the Stop the Cap! article:

Many of WiscNet’s members report that “going private” for Internet connectivity will more than double their costs. This was confirmed by Wisconsin’s Legislative Audit Bureau, which reported a member paying WiscNet $500 month for Internet service would face bills of $1,100 or more if provided by AT&T or other telecom companies.

But the benefits of WiscNet go far beyond higher costs (which are substantially higher than the example cited for larger institutions). WiscNet has enabled all manner of cost-sharing, including centralizing data storage. These are examples of how local governments and institutions can be responsible stewards of public dollars; unfortunately a majority of Wisconsin Legislators seem to believe the best use of public money is to pad the profits of AT&T.

We've written about these efforts in past years but it seems that AT&T is closer than ever to expanding its revenue from the taxpayers of Wisconsin, all with the blessing of state legislators who scream about wasted taxpayer dollars.

Responding to "Crazy Talk" - Community Broadband Bits Episode #50

For our 50th episode, we're trying something new: Lisa and I respond to three common claims made by opponents of community owned networks. We owe these three particular arguments to the Executive Director of the trade association of Wisconsin telephone companies. Each of the clips we respond to come from claims he made at a workshop at the 2012 WiscNet conference.

We play a short claim by him and then Lisa and I respond to it. For this show, we look at claims that telephone companies already serve everyone with broadband, that the rapid iteration of mobile phone technology delegitimizes public sector investment in networks, and that public investment "crowds out" private investment.

These are very common arguments offered every time a community considers building its own network, but they are quite weak. As Joey Durel, Mayor of Lafayette, so often reminds us, the big companies don't win by having good arguments. They win by buying steaks and football tickets -- lobbying. Campaign contributions help too.

At any rate, let us know if you like this format and what questions we should consider the next time we do it. 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 12 minutes long and can be played below on this page or subscribe via iTunes or via the tool of your choice using this feed. Search for us in iTunes and leave a positive comment!

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

Thanks to Eat at Joe's for the music, licensed using Creative Commons.

Waukesha's WECAN Now Provides 1 Gbps to the Internet

Waukesha, Wisconsin now offers an ultra-fast connection for educational and government members. WiscNetWire reports that the region's Community Area Network (CAN) obtained 1 gigabit Internet capability in August.

We have reported on Wisconsin's efforts to expand connectivity using the CAN model of collaboration. The people of Wisconsin are hard at working connecting to each other with a combination of stimulus funding and matching local contributions.

WECAN (the Wakesha Community Area Network) now connects Carroll University, Waukesha County Technical College (WCTC), Waukesha Public Schools and the City of Waukesha. The 1Gbps connection to the Internet is now available to the entities on the network. According to the WiscNetWire article:

On August 30th, WECAN finished work on a new fiber-optic connection giving each organization a 1 Gigabit connection to the Internet. Steve Schlomann, Chief Information Officer for the School District of Waukesha, compares this upgrade to “opening a 10 lane freeway where we once had a single lane road.”

WECAN started as an idea advanced by WCTC and Carroll University. The two entities established relationships within the private and public sectors. The initial fiber network was built in 2011. From the article:

More recently, the School District of Waukesha and the City of Waukesha also joined WECAN. The school district and city worked with CableCom LLC, Cisco, Heartland Business Systems, Multimedia Communications and Engineering of Green Bay and WiscNet to build and leverage their connection. With the addition of these members, the network, which was intentionally designed to allow other local institutions to easily join and share in the benefits, is currently being shared by four organizations with intentions to continue growing.

The ease with which other groups will be able to connect to WECAN should encourage other entities to participate. Current members of the network report cost savings and increased efficiency as a benefit of the collaborative nature of the project.

In addition to ease of connecting and savings through cooperation, new members who join will get the added benefit of high capacity. Doug Uhl, IT Infrastructure Manager at Waukesha Technical College told WiscNetWire:

“The beauty and design of WECAN is to allow members to individually and jointly vision and design applications and services without concern about bandwidth,” says Uhl.

With 1 Gbps capability, the Waukesha School District has plans to make full use of the most advanced educational technology tools:

“This is a great example of cooperation that has allowed us to expand our connection speed at a reasonable cost,” explains Schlomann. “We are all very excited about this milestone!”

Collaboration Alive and Well In Wisconsin Broadband Expansion

Wise people say that collaboration often leads to a better result than individual efforts. Recently, I was reminded of the benefits of different levels of collaboration, as they relate to community networks, in two separate articles about fiber-optic expansion in Wisconsin.

First, is a recent Randy Happel article in Trenchless Technology, about how UW-Extension is working with a private telecommunications network design, engineering, and construction firm to expand the fiber-optic landscape in their state.  Over thirty-seven million dollars in stimulus funding for UW-Extension through the American Recovery and Reinvestment Act (ARRA) is allocted as part of the Broadband Technology Opportunities Program (BTOP). The result will be a 630-mile fiber-optic network to help improve connectivity in Wisconsin.

CCI Systems, the private partner, has been around since 1955 and has a history in CATV networks. From the Happel article:

“Public-private partnerships are our expertise,” says Dave Mattia, director of operations for CCI Systems. “We are also quite adept at working within the parameters for the federal funding programs. Our experience and expertise in designing and building broadband, fiber-optic communications networks are great assets to our partners.”

“Our approach is extremely disciplined and methodical,” says Cory Heigl, director of business development for CCI Systems. “Collaboration, listening and cooperation are critical to maximize project efficiencies. Other firms may start by choosing a technology. We begin by listening and identifying the desired end result. Our approach streamlines the process and has proven most effective in securing funding, especially grants and stimulus money.”

After fiber installation is complete, scheduled for June 2013, CCI Systems will shift from installation and design to maintenance and support. After the long battle with AT&T, working with a cooperative partner like CCI Systems must be a welcome relief for UW-Extension.

UW-Extension and CCI Systems are partnering to create Community Area Networks (CAN) across Wisconsin, using the cooperative approach of a local group to building networks as an inspiration -- the Chippewa Valley Internetworking Consortium.

The National Telecommunications and Information Administration (NTIA) blog, highlights CINC in another article on collaboration in Wisconsin's Chippewa Valley.

A dozen years ago, a group of technology officials in the neighboring Wisconsin cities of Eau Claire and Chippewa Falls began meeting to share ideas on how to prepare their computer systems for Y2K. The group included officials from the city and county governments, local school districts, community libraries and medical institutions. And while Y2K came and went without incident, it soon became clear that the collaboration had the potential to turn into something much bigger.

That group became known as CINC.

And now, the Broadband Technology Opportunities Program is expanding that original “community area network” and replicating its success in three other Wisconsin communities that see CINC as a model for establishing a 21st Century communications infrastructure.

Building Community Capacity through Broadband, or BCCB, is using $30 million in Recovery Act funding to lay down more than 600 miles of fiber that will extend the network in Eau Claire and Chippewa Falls and create new community area networks in Platteville, Wausau and Superior. The public-private project is being spearheaded by the University of Wisconsin-Extension program, but has many partners, including dozens of local governments and school districts.

These projects show the power of collaboration and the true spirit of a public-private partnership. Regardless of which ownership structure a community chooses for its own network, it should have a good working relationship with community anchor institutions and local businesses.

Milwaukee Contemplates Its Chance to Be The Next Chattanooga

A recent article by Chloe Morrison on Nooga.com, highlighted the inquiries and envy from all over the globe about Chattanooga's awesome community fiber network. According to Rick Barrett of the Journal Sentinel, Milwaukee is one of many admirers with wandering eyes that keep taking a peak at Tennessee. No wonder! The "Gig City" has set the gold standard for connectivity. Additionally, the city has cleverly capitalized marketing the opportunities to spread the word about their network and to attract more economic opportunities.

Collaboration is the popular theme that is associated with development. When looking back in Wisconsin, collaboration seems rare to find. We have reported extensively on AT&T's attempts to instigate discord, drag out legal proceedings, and fatally halt the possibility of community owned broadband in Wisconsin.  If the Badgers want to compete in the digital economy, as they claim they do, they will have to stop listening to the big cable and DSL companies:

Only a few Internet users, such as a hospital or a large company, would currently benefit from the full capabilities of a gigabit network that can move large amounts of data at incredible speeds. It's like buying a Jaguar when a Ford Focus would be perfectly adequate, said Andrew Petersen, spokesman for TDS Telecom in Madison. (from the Barrett article.)

We have all read this tired comparison before and it still seems silly from a technological perspective. Planning for the future is critical when investing in essential infrastructure. Technological advancement moves at a fast pace, rather than an adequate pace.

Consider this assage from the Nooga article and consider how many of the benefits of a next-generation networks TDS would actually care about:

“The benefits are far-reaching—everything from a significant boost to economic development (new businesses locating here), millions of dollars in cost savings to businesses each year (by reducing lost time and productivity caused by power outages), attracting top talent in the technology industry to live and work in Chattanooga, the added conveniences to residents’ personal and work lives, etc.,” Dwyer said.

According to a corporate site selection survey, high-speed Internet and cost-efficient energy availability rank in the top five site selection factors that business leaders consider, which puts Chattanooga in a “niche position” because of its infrastructure, she said.

And according to a report done by Dr. Bento Lobo from UTC, the net benefit to the county is nearly $1.5 billion, plus the creation of about 3,716 jobs.

“This ends up being a net benefit of about $3,500 for every resident in the county,” she said.

Why would TDS care about the net economic benefit to the county? These are savings and benefits that would not significantly improve TDS's bottom line - the benefts accrue to everyone else.  

"It's like being the first city to have fire," said Chattanooga Mayor Ron Littlefield. "We don't know all of the things we can do with it yet, but we have something that no one else has, at least to this degree." (also from the Barrett article)

The people of Milwaukee might like to have some of that fire to keep them warm, like their neighbors, Reedsburg. At this writing, Wisconsin state law creates high hurdles for local governments to create their own networks. Perhaps, with more attention in the Sentinel and other Wisconsin media, sparks of discussion can ignite a similar fire in Milwaukee.

Rural Wisconsin Residents Struggle to Connect to the Internet

A group of rural residents living east of Madison, Wisconsin, gathered near Portage of Columbia County to discuss their lack of affordable high speed access to the Internet. These are people for whom slow, overpriced DSL would be an improvement.

Lack of access to the Internet is a drain on rural economies -- their real estate market suffer and they are unable to telecommute, when they would benefit more from it than most who do have the option. They lack access to long-distance education opportunities in a time when the cost of gas makes driving to school prohibitively expensive.

Andy Lewis, who has been working with the Building Community Capacity through Broadband Project with U-W Extension, was on hand to discuss some of the lessons learned through their work, which is largely funded by a broadband stimulus award.

The incumbent providers encouraged residents without access to aggregate their demand and create petitions to demonstrate the available demand. Of course they did. And if CenturyLink decides it can get a sufficient return on its slow and unreliable DSL, they will build it out to some of those unserved areas. This is a "damned if you do, damned if you don't" scenario for rural residents. DSL was starting to be obsolete years ago.

The better solution is finding nearby cooperatives and munis that will extend next-generation networks that can provide fast, affordable, and reliable access to the Internet. Getting a DSL to a town will do very little to attract residents and nothing to attract businesses. It is a 20th century technology in a rapidly evolving 21st century world.

The Beaver Dam Daily Citizen covered the meeting, which eventually turned away from how to beg for broadband to how they can build it themselves:

But several attendees asked why the government can't play a role in making high-speed service available everywhere, in the same way that the government helped bring about rural electrification and telephone service.

This is a very good question. They may decide not to follow that path, but given the importance of access to the Internet, they should look at options for building a network that puts community needs first. North of Madison, Reedsburg has built an impressive FTTH network and we have been tracking progress of the Fiber-to-the-Farm effort in Minnesota's Sibley County.

Unfortunately, AT&T's incredible influence in the state capital has made it more difficult for communities to build the networks they need -- even in places like Columbia County where AT&T is not and will not connect rural residents. Such is the price of living under governments that make policy based on the interests of powerful special interests.

There was a time when the ideology of self-reliance was considered American and even conservative. But now the idea of self-reliance is largely abandoned as communities first seek to beg distant corporations (with a history of royally ripping them off) to connect them and only consider solving their own problems with local investments as a last-ditch effort, which could be too controversial.

Update: This meeting was hosted by the Public Service Commission as part of a larger effort to create a state broadband plan. Such processes are typically dominated by interests of incumbent providers -- a model that was emphatically rejected by the FDR Administration when developing its plan for electrification. Electrification was wildly successful; expanding broadband by begging incumbents has been a dismal failure.