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Palm Coast's FiberNET Produces Dramatic Savings Locally

We last took a look at Palm Coast’s FiberNET over two years ago when Broadband Communities featured the open access fiber network along Florida’s upper east coast. Due to its initial focus on community anchor institutions and incremental build out, FiberNET serves as an outstanding example of how to justify a network investment with cost savings. We recently spoke with Courtney Violette who created the initial business plan for FiberNET under his previous role as Palm Coast’s CIO; he is now a Managing Partner with Magellan Advisors, an international broadband planning firm.

A presentation on the Palm Coast government website shows how FiberNET generates hundreds of thousands of dollars in annual cost savings for the City of Palm Coast, Flagler County School District and Florida Hospital. The data is impressive. The City of Palm Coast alone saves around $160,000 per year by switching to FiberNET for its networking needs.

Flagler County School District is likely the biggest beneficiary of cost savings in the community. Before FiberNET came onto the scene, the District paid Bright House Networks more than $500,000 per year for network services over a hybrid fiber-cable network. Now Flagler County School District pays around $300,000 for faster, more reliable services over FiberNET’s all-fiber network. These savings paid for the schools’ initial cost of connection after just one year.

Florida Hospital and its affiliates are also saving big. Affiliated doctors’ offices and clinics are required to maintain a 10-Mbps (minimum) connection with the hospital. Before FiberNET, these connections cost around $900 per month from the local incumbent. FiberNET now offers them for $250 per month. Similarly, the Hospital itself saves tens of thousands on its annual networking costs by switching to FiberNET.

It is worth noting these initial figures are conservative by not accounting for growing internal demand for high-speed networking. In other words, as these entities ramp up usage of faster network services available through FiberNET, their savings will grow accordingly. In fact, their savings will actually accelerate as they use services only available over fiber which the incumbent could not offer without incurring major upgrade costs.

With the network mostly built, expanding incrementally on a business case basis, FiberNET is now paying for itself in cost savings to the City and revenue from anchor institutions and businesses that previously paid much higher prices for slower services from the incumbent. Revenue has nearly doubled each year since 2010, reaching $522,940 in 2012, against expenses of $161,260. At this rate, FiberNET is expected to break even in less than six years.

Jacksonville Discovers Savings and Faster Connectivity

It is no secret to our readers that communities throughout the country have transitioned from leasing services from big corporations to building their own fiber networks to save public dollars. Some create collaborations between various entities to reduce costs. Jacksonville is the latest to dabble in collaboration and has found a way to save $200,000 on connectivity costs each year.

In a recent Government Technology article, Chad Vander Veen describes how the city found a way to eliminate leased lines and switch to a faster 1 gigabit connection via fiber (the article incorrectly says "gigabyte" in multiple places where it mights gigabit) . The City's Information Technology Division (ITD) began developing relationships and bringing various agencies together to explore its options. They held monthly meetings that included the mayor's office, public safety agencies, and libraries. Through these meetings they learned the city was eligible to participate in the Florida Lambda Rail program.

Lambda Rail is a nonprofit independent research and education network that connects universities, schools, libraries, and research facilities across the state. The network has an extensive network of fiber across the state. Because the City of Jacksonville is responsible for its libraries, it qualifies for service from Lambda Rail. Within 45 days, Lambda Rail served city facilities. 

“This is a great opportunity for all the partner agencies to work together to provide superior service and save money at a time we need to make every dollar count,” said Mayor Brown in a statement. “With a growing number of websites and applications helping to expand the reach of city government, we owe it to taxpayers to invest wisely in the most effective and efficient systems to keep everyone connected.”

Saving public dollars by elimintating leased lines and collaborating is certainly a positive outcome. Unfortunately, this solution may limit the community in the longer term. Working with entities that only serve nonprofit or specific entities means that others who need connections in the communities - including both residents and local businesses - will not directly benefit from this investment.

This is a good reminder for communities to engage in long term thinking when they decide how to invest for the future. This approach is surely better than the status quo, but may prove a bit restrictive as the big cable and telephone companies fail to meet local needs.

Lakeland Dark Fiber In Depth - Community Broadband Bits Podcast #58

In Florida, Lakeland is one of several communities that has built a dark fiber network in a low-risk bid to expand connectivity for anchor institutions and to spur economic development. City of Lakeland Fiber Optics Supervisor Paul Meyer joins us for episode #58 of the Community Broadband Bits podcast.

Meyer explains why Lakeland began offering dark fiber leases and how it has benefited the community - most notably by allowing ultrafast communications at low rates. The network has expanded several times over the years in conjunction with other projects, including bringing smart traffic management to more intersections.

In addition to saving money for municipal buildings and the school district, the network has helped the hospital take advantage of modern technology and helped to lure new businesses to the community. This interview complements our previous story about Lakeland's fiber 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 22 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 Break the Bans for the music, licensed using Creative Commons.

Dark Fiber Paying Off in Florida's Lakeland

Near the center of Florida sits Lakeland, the largest city between Orlando and Tampa with 98,000 residents. The area boasts 38 lakes, citrus crops, and a growing healthcare industry. Lakeland also owns a fiber optic network serving education, business, and government. To learn more, we spoke with Paul Meyer, Lakeland Electric City of Lakeland Fiber Optics Supervisor.

The city's municipal electric company, Lakeland Electric, began generating and providing electricity to customers in its service territory in 1904. In the mid 1990s, the utility began replacing older copper connections between substations with fiber-optic cable. Soon after, the Polk County School District asked Lakeland Electric to connect school facilities via the fiber network for video transmissions. By 1997, almost 50 school facilities were connected to each other via using dark fiber provided by Lakeland Electric. In 1994, the District paid $219,582 $84,737 to the utility to design, construct, and install equipment for video connections in four schools. The school received an indefeasible right of use for two fibers for twenty years. over which Verizon delivers data and voice services to the School District on its own lines.

Meyer noted that the fiber project likely cost more than the school paid but the installation gave them the opportunity to expand the network. Further expansion connected the police department, libraries, and water facilities. Over time, the electric utility has incrementally expanded to every building engaged in city business. The network is aerial, using the utility's own poles to mount the fiber.

Like a few other communities on our map, including Martin County Florida, Lakeland took advantage of the opportunity to expand when the state's Intelligent Transportation System expanded in the area. In 2003, the State of Florida funded fiber expansion to 177 additional intersections in Lakeland. The State and Lakeland Electric entered a 20 year dark fiber lease to serve the system at the new intersections. The expanded backbone allowed the utility to build out the network even farther.

Lakeland Electric soon began leasing dark fiber to its largest customer, Lakeland Regional Medical Center. Meyers also notes that associated clinics and healthcare facilities within the geographic area of the hospital connect to the network. The hospital's personnel manage its own network so costs are predictable and information systems talent is onsite.

Meyers estimates the hospital system would pay $5,000 - $6,000 per month at each location for managed services from Verizon. Now, the hospital pays significantly less at $100 per fiber, per mile, per month to lease dark fiber from the City. The hospital uses 10 gig connections between facilities for advanced telehealth applications. 

logo-Colo5

Colo5, offering colocation services, disaster recovery, and cloud services, is expanding to Lakeland and will be connected via Lakeland Electric. The company has recently finished constructing a secure building and will serve a number of customers, including Level 3, TW Telecom, Verizon, Fiberlight, and Brighthouse in the Lakeland facility.

Meyer says dark fiber leasing provides about $225,000 per year in revenue to the general fund though he declines to estimate how much the municipal government saves by using its own infrastructure instead of leasing from Verizon or some other provider. 

Recent articles from the Ledger.com also report Lakeland is a final candidate for the next Amazon distribution warehouse. While tax incentives will be part of the allure, the presence of Lakeland's dark fiber will also have a role in the decision. The Ledger reports the online seller will bring 248 - 385 jobs with a new fulfillment center.

Meyer also tells us that the State is currently constructing its new Florida Polytechnic University in Lakeland, which is scheduled to open in the fall of 2014. Lakeland Electric's fiber network runs to the location of the future campus and the utility hopes to provide communications infastructructure.

Update: Paul Meyer contacted us to share more detail on the arrangement between the City and the Polk County School District. In addition to the original agreement, the two have entered into several other agreements over the past 20 years. To date, the City of Lakeland has connected 45 Polk County Schools with dark fiber for a total of $1,173,337. The agreements are for the life of the fiber, 20-25 years.

UC2B Saves Public Money With Better Broadband in Illinois

The City of Champaign is now celebrating the transition to the UC2B fiber network. With underground fiber lines, the City will no longer be plagued by weather related interruptions. Champaign is also counting on significant savings on a network that is more than 1000 times faster than the old connections. From the City of Champaign website:

UC2B fiber and Internet access also means real cost savings to the City. The City will now save $30,240 annually by dropping all of our T1 data lines, and $31,200 annually by using UC2B as our Internet provider. While a significant portion of this savings is offset by annual maintenance fees for the fiber rings the City uses, we still save over $13,000 net annually and have a much faster, much more reliable system that will allow our digital data transfers and Internet use to expand for years to come!

For more on the UC2B network, listen to episode #42 of the Broadband Bits podcast. We spoke with Carol Ammons and Brandon Bowersox-Johnson, both involved in Champaign's efforts to use the UC2B network to its full potential.

Medina County Offices Will Connect With Community Network

The newly completed Medina County Fiber Network (MCFN) in Ohio will soon add Medina County government as the next customer.

The Medina-Gazette reports the County Commission recently voted unanimously to enter into a five-year agreement with MCFN and drop Armstrong Cable. County Administrator Chris Jakab says the county will save $600 per month. Currently Medina County pays $3,300 per month and the new monthly fee will be $2,700 per month.

Apparently, Armstong Cable did not take the news well. At the County Commissioners meeting, Armstrong questioned the decision:

Minutes after the commissioners unanimously approved changing service providers, Armstrong’s General Manager Karen Troxell disputed Jakab’s figures.

Troxell said the Armstrong bill is made up of a $2,474 fiber-optic lease and an $826 Internet fee. She said the new agreement only covered the fiber-optic lease. She said the county still would have to pay for Internet access, which would bring the total bill to more than $3,500.

“I think this decision needs to be rethought,” she told the commissioners. “Or I need an explanation as to why you’re willing to pay more money for these services.”

Jakab said Troxell was mistaken, saying the fiber network’s $2,700 fee includes a $300 fee for Internet access.

The community recently celebrated completion of its 151-mile network, owned by the Medina County Port Authority. Last summer, the Highland School District connected to the network when its contract with Time Warner Cable ended. The move saves the school district approximately $82,000 in annual connectivity fees.

Business and community leaders began planning for the network 10 years ago as a way to spur economic development and create a more competitive telecommunications environment. A Port Authority revenue development bond issue and a stimulus grant administered by OneCommunity paid for the $13.8 million project. 

Moultrie City Manager Discusses Origins of CNS Network in Georgia for Community Broadband Bits Episode 39

Mike Scott, City Manager of Moultrie in Georgia, joins us for Episode #39 of the Community Broadband Bits podcast to share the origins of the Community Network Services (CNS) network that joins four towns in four counties in rural southwest Georgia.

In this interview, Mike Scott shares some of the benefits of the network for local schools and community savings. Built originally because the existing cable and telephone companies would not invest in their communities, CNS has proved itself an incredibly valuable community investment.

CNS is credited with creating over 6,000 jobs in the communities it serves, a tremendous boon for the communities that joined together to create this network. During our interview (below), we note a video they created to show off some of the benefits of this network. Here it is:

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. 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 D. Charles Speer & the Helix for the music, licensed using Creative Commons.

Open Access Network in Mount Vernon, Washington Created More Jobs and Government Savings

Mount Vernon, Washington, started building their own fiber optic network in 1995 and over the past 18 years have continued to add incrementally. While the network started as a way to connect a few municipal facilities, it has since expanded to nearby Burlington and the Port of Skagit. The network now serves government, schools, hospitals and clinics, and a broad range of businesses in the area.

We spoke with community leaders from Mount Vernon for our 38th episode of the Broadband Bits podcast. Mount Vernon owns the network and operates it out of the Information Systems office.

The network required no borrowing or bonding because initial funding came from a state Community and Economic Revitalization Board (CERB) grant. Since then, Mount Vernon has used revenue from the network and creative cost sharing with partners to expand throughout the city. When expanding into Burlington and the Port of Skagit in 2008, city leaders received a county sales tax grant to fund deployment.

The Mount Vernon School District became a partner early in the evolution of the network. According to Kim Kleppe, Information Services Director, K-12 schools do not pay a monthly fee to receive up to 1 gig of capacity for their 10 facilities. He estimates the current costs of a dark fiber connection for one facility at $700 per month. Total savings are astronomical, allowing the schools to dedicate significant dollars toward other expenses.

Mount Vernon city government saves over $100,000 per year and nearby Burlington saves over $52,000. The network has never been in debt and maintains a reserve.

Mount Vernon's network is an open access model on which ISPs serve customers via the city's infrastructure. Subscribers pay a one time fee to the city to be connected. Onging revenue comes from the ISPs, who pay to the city a percentage of what they collect in customer connectivity fees. Currently, eight different providers offer services via the Mount Vernon network, providing ample competition.

Like other communities we see that choose the open access model, Mount Vernon acknowledges that they could take the next step and provide retail services but they choose not to. Kleppe tells us that Mount Vernon wants to let the private sector do what it does best - provide retail services - while the city offers the infrastructure.

Healthcare, aerospace, engineering, banking, technology, and legal data services are a few high bandwidth industries with locations on the network. Jana Hansen, Community and Economic Devlopment Director, believes the fiber optic network is a key element in bringing new companies to Mount Vernon. Hansen decribes the network in the Port of Skagit as a "tremendous success" and notes that businesses have re-located from Seattle to the Skagit Valley. While those businesses often cite quality of life as a driving factor, Hansen believes Mount Vernon, Burlington, or the Valley would not have been considered without the fiber network.

Jana Hansen shared these thoughts from a business that moved to Mount Vernon from Seattle:

As a Seattle law firm with an integrated information security business for the past twelve years, our Pioneer Square office lease term was ending, and we needed new, larger, space. As we began the process of evaluating our options, we came to realize the significance of the fact that our customers are national, or international, and that less than ten percent of our revenues for the past three years came from Washington. This meant that as far as our customers were concerned, we could relocate our offices anywhere, provided that our new location met three important criteria: (1) access to tech-savvy workforce pool; (2) dependable high-speed business-quality internet; and (3) reasonable proximity to air transportation.

Skagit County, and Mount Vernon in particular, meet and exceed all of these. MV’s location astride I-5 means that our employees can live from Bellingham to Everett and still face a much shorter, and more comfortable, commute than if they lived in Bellevue and travelled to downtown Seattle during rush hour. This huge area is filled with energetic, technically sophisticated potential employees who appreciate the opportunity to avoid the morning grind. Secondly, Mount Vernon’s ahead-of-its-time fiber ring means affordable, dependable internet access of the highest quality. We are accustomed to paying thousands of dollars per month for bandwidth. Not only will we pay less in MV (for more capacity), but fiber optic circuits are more reliable and flexible than the older data lines we have been required to use in Seattle. Finally, the improvements to conveniently located Bellingham’s airport over the past few years have opened up routes all over the country, and more are on the way.

I suppose there are other places that would also meet these three criteria, but none of them match the most important reason of all that we are moving to Mount Vernon: quality of life. No traffic concerns, affordable cost of living and housing, great schools, proximity to major metropolitan areas (Seattle and Vancouver) without the negative points, equal proximity to all that outdoors and nature offer, and, of course, friendly and helpful people who are a pleasure to interact with. We couldn’t imagine moving anywhere else.

For these reasons, we’ll be opening our offices in Mount Vernon this Spring.

Update: Some have asked (rightfully so) for more information about the grants involved in building this network. IS Director Kim Kleppe sent this to Christopher to explain more about the financing:

We had two grants helping to fund various parts of the project. The first one was actually 2001 for $500,000 and the second one in 2005 we received $367,506. Other than that we had a lot of partnerships to help extend and push out various demarcation points and this would be hard to calculate. A lot of the areas we built around were built based on where are facilities were - for example our wastewater pump stations which really covered a lot of area which was partially funded by that utility and where other partners like the Schools, County and Hospital sites were located sharing costs for the build. It was built based on both vision for needs for both public and private needs and is still a growing process, but no debt was incurred and not much of a budget to work with.

The lesson we take away from this is that most communities have many opportunities to make investments like this. Local officials need to be creative and determined. Opportunities rarely surface themselves, they are created by building relationships and coordinating infrastructure efforts.

In Georgia, Monroe Muni Network Created Jobs, Lowered Bills

As we monitored Georgia's HB 282, a bill to limit the capacity of local governments to invest in Internet networks that spur economic development, we learned of many existing networks that have helped communities to thrive.

Brian Thompson, Director of Electric and Telecommunications in Monroe took some time to tell us a little about their city network.  Located in the north central section of Georgia, with a population of 13,000, the network now offers triple play services to residents and businesses. Its network started in the 1970s with a municipal cable tv network. Today, the network is a hybrid with fiber having been added as an expansion to its cable network.

Monroe's investment in its fiber began as a way to improve connections for education. The Walton County School District could not find a private provider willing to collaborate on an affordable network between school facilities. The city took on the challenge and built a point-to-point network which the School District paid for in 10 years. In the mean time, the city expanded its network in other areas. Now, the Walton County Schools have gig service between facilities and to the Internet. The District pays only $500 per month for a service that would cost five times more from a private provider.

Thompson also confirmed what we hear from other communities with publicly owned networks - prices for business and residential services are very competitive and service is superior. He notes that customers often express appreciation for local representatives, rather than dealing with a huge bureaucracy like those at Verizon or AT&T. New connections can be created in a matter of hours or days instead of weeks.

Residential service for Internet access from MonroeAccess.Net includes affordable basic service (1 Mbps / 256 Kbps) for $21.95 per month. Two faster tiers include $34.95 (6 Mbps / 512 Kbps) and $44.95 (15 Mbps / 1 Mbps). Cable tv rates vary from $15.50 to $62.95 per month and residential phone service starts at $29.95 per month. Thompson notes that, when Monroe added phone service, rates dropped for every one regardless of carrier. 

There are over 100 fiber customers and the network has been critical for economic security. T1 connections for businesses used to go for $1,000 per month; now higher capacity connections cost $250. Notable customers include Minerva, a beauty salon supplier with a large showroom and distribution center in Minerva. The multi-million dollar salon equipment company has headquarters in China but has nearly 30,000 customers in the U.S. Company owners required a fiber connection to communicate with the facility in real time. Monroe was happy to oblige.

Hitachi Logo

Monroe is also home to a Hitachi plant that makes parts for several auto companies. The fiber network allows the plant to communicate efficiently with the Hitachi headquarters located in Harrodsburg, Kentucky. The plant employs about 250 people.

Monroe never borrowed or bonded to build out its network. Thompson tells us the network has always progressed slowly and community leaders leverage partnerships with local interests along the way. The city used its capital investment fund for initial construction and continues to expand slowly with revenue obtained from offering services. Thompson tells us that their approach works for Monroe and shudders at the thought of legislators in Atlanta claiming otherwise.

Monroe's network travels well outside the city limits, over a nine county area, and HB 282 could have put an end to its expansion. Fortunately the bill was defeated on the House floor and for at least one more year, this community does not have to worry that the state will revoke its power to encourage economic development locally.

Kings Mountain, North Carolina, Building Fiber Network to Connect Public Facilities

Fiber optic connectivity is coming soon for public facilities in Kings Mountain, North Carolina. The city has its own electric, natural gas, and water utilities and is home to a little over 10,000 people. Located along the southern edge of the state, the town is considered a suburb of Charlotte.

According to an Alicia Banks Gaston Gazette article, the City Council unanimously approved contracts to start construction and most of the city departments should be on the network before the end of the year. The city fiber optic cables amount to nine miles in length. Savings will be about $65,000 annually as the city uses its own fiber to supply phone and Internet connections rather than lease services. From the article:

“We should start seeing the savings within seven years,” Kings Mountain Mayor Rick Murphrey said. “It’s cheaper to use your own fiber optics."

Though seven years may seem like a long time to wait for savings, recall that these connections will be needed indefinitely. Further, these networks often lead to unanticipated benefits that can make the savings occur faster than forecast.

The entire project will cost $495,722 under a five-year payment plan. Also from the article:

“Taxpayers' dollars are helping to pay for this, but no increase,” Murphrey said about rates. “(Funds will also) come out of the electric, gas and water fund.”

Kings Mountain is another community choosing to use their current fiber resources to provide broadband to city facilities and save taxpayer dollars. Our recent Public Savings Fact Sheet, highlight a few of many other communities that choose this route.