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Community-Based Broadband Solutions: The Benefits of Competition and Choice for Community Development and Highspeed Internet Access

Publication Date: 
January 13, 2015
Author(s): 
National Economic Council and Council of Economic Advisors

Affordable, reliable access to high speed broadband is critical to U.S. economic growth and competitiveness. Upgrading to higher-speed broadband lets consumers use the Internet in new ways, increases the productivity of American individuals and businesses, and drives innovation throughout the digital ecosystem. As this report describes, while the private sector has made investments to dramatically expand broadband access in the U.S., challenges still remain. Many markets remain unserved or underserved. Others do not benefit from the kind of competition that drives down costs and improves quality. To help fill the void, hundreds of towns and cities around the country have developed their own locally-owned networks. This report describes the benefits of higher-speed broadband access, the current challenges facing the market, and the benefits of competition – including competition from community broadband networks. - Executive Summary

On January 13, 2015, President Barak Obama visited Cedar Falls, Iowa, to discuss his administration's plans to bring better connectivity to American residents and businesses. The centerpiece of his strategy involved removing state barriers to municipal networks and promoting local authority.

In tandem with that speech, the White House released this report. The report includes significant research from the Institute for Local Self-Reliance, including community profiles, economic data, and the role if municipal networks in competition.

Chattanooga Public Library Now Hosts GigLab

Entrepreneurs in Chattanooga now have a new space where they can try to answer the question, "What does one do with a gig?" The Chattanooga Public Library officially opened its GigLab in November. 

The public space offers gigabit access in a lab environment so developers can take their ideas to the next level. The lab is supported by the Mozilla fund and the National Science Foundation. A recent Chattanooga.com article reports that:

The general public will now have access to enterprise level gigabit connected hardware, as well as a variety of short session and hands on courses regarding networking as a whole, and other gigabit focused projects.

Sean Brewer, one of the GigLab founders, writes on the blog:

The hope for The GigLab is to be a place where people can experiment, build prototypes, or just learn how to use hardware that they wouldn’t have access to. I am helping start a group that will be working through “Parallel and Concurrent Programming in Haskell”. The book has an entire section devoted to GPU computing, and I am excited that we will have access to this hardware at The GigLab to explore. Education removes the magic of the mysterious. I feel The GigLab can do that for high-performance computation.

Erwin FTTH Pilot Project Moving Forward

Erwin, Tennessee announced last summer that it was planning an FTTH pilot project to connect 1,200 customers. After receiving the necessary approval from the state comptroller this summer, Erwin Utilities began construction in October, reported the Erwin Record.

The pilot project focuses in and around downtown and leadership at Erwin Utilities plan to use the network for the town's electric system, water system, and wastewater system in addition to high-speed connectivity. Lee Brown, General Manager of the municipal utilities, reported that the network will provide services up to a gig.

From an August Johnson City Press article:

“This project will enable Erwin Utilities to provide improved electric, water and wastewater services while enhancing the quality of life and creating economic opportunities for citizens within Erwin Utilities’ service area,” he said. “I expect the benefits of this project to our customers and community to be substantial.”

...

“It’s our intent to be able to deploy this over our whole customer service area in the future, and of course, the success of the pilot project will somewhat dictate how quickly we’ll be able to do that,” Brown said. 

The first phase of the project is scheduled for completion in early January.

LightTUBe Lowers the Price of a Gig; Increases Speeds for Free AGAIN

The Tullahoma Utilities Board (TUB) began offering gigabit service in 2013 through its municipal FTTH network, LightTUBe. In a recent press release the TUB announced it has lowered the price of residential gig service to $99.95 per month

In addition to slashing the price for the highest tier, TUB increased all other Internet speeds at no additional cost. This is the sixth time since its 2008 deployment that LightTUBe customers have enjoyed a free speed increase. From the LightTUBe website:

New LightTUBe Prices

Brian Skelton, TUB General Manager, said in the press release:

“We’ve grown our Internet business in such a way that we can offer Gigabit speeds at a more affordable price.” 

Skelton has said in the past that the decision to offer Gigabit Internet was an easy one. 

“We want to make Tullahoma a much more desirable location for technology companies to locate, due to our ultra-high speed Internet and our highly skilled workforce,” he explained in spring of 2013. “Tullahoma is light-years ahead of most cities in the United States with the ability to offer these incredibly fast Internet speeds.”

LightTUBe has brought jobs to the community, increased the efficiency of the electric utility through a smart metering program, and implemented a "TV Everywhere" option for customers. Even thought the network is restricted by state law, it has remained financially stable while keeping rates in check.

Community Broadband Media Roundup - November 30, 2014

This week in community broadband, more communities are adding broadband to the list of essential utilities, and many of them are turning to Chattanooga as a model “gig city.”

As Times Free Press’s Dave Flessner reports, the great thing about Chattanooga's approach is that it’s not just about Internet. In fact, the broadband boom is really an unintended benefit of the city’s cutting edge smart grid, which keeps the city’s lights on and powers the economy as well. 

"What we're going to try to do is bring some of the brilliant people from Warner Bros., Fox, Disney and IBM down here to Chattanooga to help them get their heads wrapped around this notion that you've got to stop worrying about scarcity," [Annenberg Innovation Lab director Jonathan] Taplan said.

Last year, T-Bone Burnett, a Grammy Award winner, performed "The Wild Side of Life" from a Los Angeles studio with Chuck Mead, a founder of the band BR549 who was on stage in Chattanooga.

"They sang a song together over 2,000 miles apart," Taplin said. "That's the power of gigabit Internet. I think we're just beginning to think of the possibilities of what this thing can do."

And Android Authority’s William Neilson Jr. explores the desire for faster connections and more choices.

“Isn’t it amazing how much faster broadband speeds are in parts of the country where there are a number of broadband options available to residents? How many times am I going to write an article detailing a broadband provider telling a city that they don’t need “fast” speeds even though the city is universally angry at their lack of broadband options?”

Of course, we see the product of how increased competition brings better service even more clearly in communities that have municipal networks, not just in Google's Kansas City network. It is an outcome that all communities can achieve if they regain the authority to do so. 

In the beginning, Lafayette, Louisiana created its own utility system. And it was good. Steve Stackhouse Kaelble goes back to the very beginning of municipalization of utilities in his research on public power this week:

Lafayette is just one community, but it provides a great illustration of the forward-thinking mindset that led many American municipalities into the utility business. In some cases, local leaders got a glimpse of the future and worked to bring it to their communities ahead of the curve. In other cases, they found that the profit-driven business model that works so well in much of the American economy had left them behind when it comes to certain kinds of services.

The fruits of these local efforts are America’s public power communities — places where local governments and other public entities have taken charge to deliver services their communities need to prosper.

Syracuse Mayor Stephanie Miner is making her list and hoping for smarter sensors this Christmas. On Miner’s wish list: municipal broadband, and other essential smart grid infrastructure projects. The mayor requested close to a billion dollars in grant money from Gov. Cuomo for economic development in greater New York. It’s unclear if Syracuse is high enough on Cuomo’s list: 

Reality check: … [Miner is] well aware it's not terribly compelling to spend hundreds of millions of dollars on stuff you can't see. It's an "eat-your-peas'' approach that aligns with Miner's view of the role of government, versus the "shiny toys'' approach favored by Cuomo and the Buffalo Billion… Whether by accident or design, the mayor's plan leaves us wanting more. Think of it as an opening bid. Who's willing to push her vision farther?

And while all of these cities are moving forward with community broadband efforts of some kind, Jason Meyers with Light Reading spoke with the city’s Chief Technology Officer, Mike Mattmiller and noted that despite Seattle’s reputation as a tech leader, it is lagging in the gigabit connecitivity. Mattmiller suggests that a public-private partnership is still desired, depending on how a new study turns out.

Bozeman, Montana residents are urging leaders to help drive down prices and improve Internet speeds this week. Kenneth Silvestri voiced his opinion in the Bozeman Chronicle.

We could continue to be beholden to the monopoly imposed by the telecommunications companies, or we can invest in our future by laying the groundwork for a technology infrastructure that serves the community and expands access.

Sahara Devi seconded that sentiment in Bozeman, and we hope you will do the same in your own communities. When lawmakers on both sides of the isle hear your views on competition, local authority, and economic development, it is hard to back down from taking steps to increase local choices and better connectivity. 

Wi-fi

New York City and Seattle are both looking into wi-fi neighborhoods, with varying success. Last week a Seattle councilwoman announced her backing of Wi-Fi in tent cities, which would help serve the city’s homeless population. This week, T.C. Scottek with The Verge dug in to NYC’s effort to connect parts of the city with Wi-Fi.

One of the biggest problems is that LinkNYC will be funded by advertising, and as the Daily News correctly points out, the poorest neighborhoods in the city aren't worth as much to advertisers as tourist-packed Times Square. That's a reality that makes sense for profit-seeking businesses to build around, but not so much for public-facing utilities that ought to provide reasonably equal levels of service to everyone.

And “Mat Catastrophe” with Charleston City Paper lamented his city’s decision to let Comcast supply the bandwidth for the city’s new Wi-Fi-in-the-parks initiative. It seems Catastrophe is concerned that Comcast may not have the city’s residents real Internet interests at heart. 

… if you're hanging out in one of Charleston's lovely parks and you have a burning desire to do whatever it is you want with a free internet connection, by all means do so. But just don't believe for one second that it really makes the city more livable for any more than a small fraction of Holy City residents. And never forget that it's just another way that public money is siphoned into private hands.

If you want the City of Charleston to really make a name for itself, then you should support the idea of repealing the state law against municipal broadband providers and advocate for whichever mayoral and city council candidates are willing to take up that fight and move Charleston in the right direction in the 21st Century.

Corporate Monopolies and Mergers

Verizon claims it would *not* to sue the FCC to block net neutrality rules. But only if the commission promises it will not reclassify broadband providers as utilities. More and more citizens are making the connection between corporate monopolies and our poor broadband choices. Activists rallied in Brooklyn this week. Jay Cassano reported about the social justice argument for Waging Non-Violence.

Most concretely, the merger could result in higher prices for broadband Internet service, which would hit those who are economically disadvantaged the hardest.

'The merger could really negatively affect people who already have trouble accessing the Internet right now,” said Kevin Huang, campaign manager at Fight for the Future. 'When it comes to cable and Internet, the cost of service is crucial. It’s incredibly important for marginalized communities to participate in the 21st century ecology, but the prices for reliable Internet services have been going up.'”

Community Broadband Media Roundup - November 21, 2014

Tennessee officials are raising the “Gig City” rally cry. Last week, public and private sector leaders gathered in Chattanooga to make sure the FCC knows where they stand on removing restrictions to community broadband in the state. GovTech’s Brian Heaton covered the rally.

“What needs to [happen] is removing the restriction of the electronic footprint, so anybody who wants to provide accessible, high-speed broadband will not be encumbered by unnecessary regulations,” [Tennessee Sen. Janice] Bowling (R) said.

Public officials again stressed the need to increase connectivity beyond the city’s borders in order to develop the area’s economic future.

Longmont, Colorado is one of this week's darlings of community broadband. Trevor Hughes reported on USA Today about the city connecting residents to its fiber optic network. The public network highlights the problems communities face when private networks fail to provide service as promised.

“Longmont knows all about the failings of the private marketplace. Twice the city partnered with private companies to provide high-speed Internet to residents over the past 15 years, and twice the private companies failed. Now city workers are picking up where those private ventures failed, using low-cost government loans to help pay workers to bring the service from the network that "last mile" to peoples' homes.

"It was the private sector that failed here," Roiniotis said. "We tried. We reached out to the private sector to build this network. "If we had waited long enough, there's a chance a cable company would have eventually done this. We decided, no we don't want to wait."

In Madison, city leaders are recognizing the necessity of Internet access in helping to close the digital divide. The city is looking into expanding connections from city government centers to low income areas and the city's public schools.

“We are working in the 21st century with 21st century learners,” says Cindy Green , the district’s executive director of curriculum and instruction. That requires access to and ability to navigate technology with ease.

“The instruction drives every decision that we make and the technology is a tool that gives students and teachers access to things they could not access in the classroom,” says Beth Clarke, director of instruction technology and media services.

And, high speed broadband received a major “go ahead” in Princeton, Massachusetts this week as well. The Local News Telegram reported about the 442-to-51 vote in favor of getting the city ready for its own network.

Net Neutrality

Adi Robertson with The Verge covered Sen. Ted Cruz’s ridiculous headline-grabbing “Obamacare for the Internet” talking point. When Cruz argued that public utilities are not “bold, innovative, and fair” he missed the point, as Robertson explains: 

“The problem is that "bold, innovative, and fair" aren't words that come to mind when you think of today's unregulated ISPs. In fact, Ted Cruz's nightmare scenario doesn't seem like a radical departure from what we've got right now. If its merger with Time Warner Cable goes through, Comcast will run over half the wired broadband market, and the "innovation" that net neutrality would prevent has so far involved blocking the BitTorrent protocol and giving its Xfinity video app a boost on the Xbox. Real competition — from Google Fiber or even municipal broadband projects — is what's actually led to, well, competition.” 

However, the best response to Ted Cruz may be from the occasionally crude but generally quite hilarious, The Oatmeal. And in this case, a good reminder of how campaign finance corruption leads to these kinds of crazy statements.

Another Gig in Tennessee: Jackson Energy Authority Announces Network Upgrade

One of the earliest and largest community fiber-to-the-home networks in the nation is about to get an upgrade. Jackson Energy Authority (JEA), a public utility in Western Tennessee, has announced that all 18,000 of its subscribers will be able to receive symmetrical gigabit services within three years, with the first upgraded connections expected to come online in early 2015. The pricing for a gigabit connection is not yet finalized, but will be under $100 per month according to Senior VP of Telecommunications Ben Lovin. 

JEA built out its FTTH network way back in 2003, when DSL was still considered fast and iPods and cellphones were just beginning to find their way into most people’s pockets. At a cost of $54 million, the network was funded mostly through revenue bonds. It has offered triple play services (voice, internet, and television) for ten years, achieving take rates of up to 70%

Because of the age of its equipment, to enable the gigabit upgrade JEA will have to replace the optical network terminal (ONT) at each premises - the point where the network fiber connects to the actual house or building. JEA will also have to replace some of the network equipment in its central offices. The total cost is expected to fall between $8-10 million. Unlike the original network build out in 2003, however, the upgrade will be funded through regular cash flow and will not require borrowing. 

JEA provides all utility services under one umbrella in the city of Jackson: water, heat, electricity, and telecommunications. Its investment in ubiquitous fiber has allowed it to implement smart grid technology, managing outages and power flows more securely and efficiently. 

Jackson, Tennessee is also a member of Next Century Cities, the collaborative effort between communities and elected leaders across the country to share informational resources and promote fast, affordable, and reliable Internet access.

"Envisioning a Gigabit Future" Reminder and Livestream Info

Chattanooga is a destination of choice for gigabit seekers and advocates for local choice, especially on Tuesday, November 18th. Next Century Cities and the Southeast Tennessee Development District will convene a field hearing titled "Envisioning the Gigabit Future." If you are not able to attend, the event will be live streamed.

Register to stream the event at http://conta.cc/1yRvAjG.

As a reminder, the event will be at The Church on Main in downtown Chattanooga from 9 a.m. - 12:30 p.m. EST.

Speakers will include Mayors, elected officials, and a long list of other local leaders with firsthand experience in bringing high speed access to their communities. 

There is still time to register online to attend.

EPB Working with Department of Energy to Improve Smart Grid

EPB estimates local businesses have saved approximately $50 million by reducing lost productivity due to power outages by 60 percent over the past two years. Those figures are impressive but Oak Ridge National Laboratory (ORNL) will be working with EPB to raise them even higher.

The Times Free Press recently reported that ORNL will send engineers to Chattanooga to optimize the use of data from the EPB smart grid. The goal will be to increase efficiency even further and to use their discoveries to help other U.S. electric utilities.

"We have to have a more reliable electric system," DePriest said after signing an agreement Monday to work with the Oak Ridge lab on electric grid improvements. "Electricity is essential to our modern way of life and we have to figure out ways to use all the data we are gathering in a quicker and more usable manner."

EPB's smart grid now gathers data in 15 minute increments whereas many utilities that have less sophisticated capabilities only collect data once or twice a month. EPB's system quickly discovers problems that can balloon into costly mistakes if not detected early.

As more people use solar, wind, or geothermal power, providing electricity or purchasing electricity from consumers becomes more complicated. 

"We need to continue to innovate and get better," said Patricia Hoffman, assistant secretary for DOE's electricity delivery and energy division. "Chattanooga has been a leader and we hope this will help us find ways to make our electric grid more efficient, more flexible and more reliable."

"Envisioning a Gigabit Future" on November 18th in Chattanooga

Next Century Cities and the Southeast Tennessee Development District will host an event on November 18th in Chattanooga entitled "Envisioning a Gigabit Future" at The Church on Main.

The field hearing runs from 9 a.m. to 1 p.m. EST. Participants will hear from panelists who will discuss how and why gigabit infrastructure is quickly becoming a critical component to local community vitality.

From the invitation:

Chattanooga is one of America's first - and leading - truly "gigabit" communities. Although the city's investment and commitment has yielded dividends for the city itself, this is not just an issue of local or parochial concern. The potential for gigabit and next-generation broadband to improve America's communities is a national question, with national implications. 

For example, Tennessee is one of about twenty states that restrict community broadband choice, prompting Chattanooga and Wilson, North Carolina (another such state), to petition the Federal Communications Commission to remove these restrictions so that Chattanooga and Wilson can expand their highly successful networks.

Speakers and panelists will include:

  • Mayor Andy Berke, Chattanooga, TN
  • Senator Janice Bowling, Tennessee State Senate (16th District)
  • Mayor Gary Davis, Bradley County, TN
  • Harold DePriest, President and CEO, EPB
  • Jonathan Taplin, Director, Annenberg Innovation Lab, University of Southern California
  • Tony Perez, Director of the Seattle Office of Cable Communications and President of the National Association of Telecommunications Officers and Advisors
  • Aldona Valicenti, Chief Information Officer, Lexington, KY
  • Rick Usher, Assistant City Manager, Kansas City, MO
  • Beth Jones, Executive Director, Southeast Tennessee Development District

You can register online for the free event.