community broadband networks

If you were judging solely from the reaction of Comcast, you could be faulted for thinking Ramsey County and the city of Saint Paul were making a bold, if risky, investment to bring real broadband to local businesses and citizens in Minnesota's capital. But you would be wrong. Very wrong.

The City and the County are paying a company to build them a network to serve their own needs. The City and County are smart to want their own network but this particular approach is a poor one. Let's start with a little background:

Saint Paul and Ramsey presently rely on Comcast's network to transfer data files between locations and access the Internet. It is an old cable network, called the I-Net, that is failing to meet the present day needs for the City and County. Because Comcast provides the I-Net at no charge as part of the franchise, they put it up with its inadequacies. But government employees are less efficient than they could be due to this old, unreliable network. For instance, they have to wait for GIS files to crawl across the network.

St Paul's telecommunications problems aren't limited to just the I-Net. Even back in 2005, St Paul recognized that the Comcast/CenturyLink duopoly wasn't getting the job done for much of anyone. We had (and still have) the same basic connections that the rest of the country had, limiting our attractiveness for new businesses that have above average needs. So the City created a Task Force that produced this terrific report in 2007 [pdf]. But the economy crumbled and the report was largely forgotten.

No one, including myself, stepped up. I have lived in St Paul for 15 years and now own a home here. This has been a failure of leadership from elected officials, staff, and concerned citizens (in that order). Mayor Coleman has utterly failed to do anything but talk about the importance of broadband and the City Council has followed his lead since Lee Helgen lost his seat. A sign of this failure is an announcement that MISO is moving out of St Paul: One of its reasons for moving 90 jobs from St Paul to Eagan was better access to fiber optic connections. As long as St Paul continues to rely on Comcast and CenturyLink, there will be little reason for any entreprenuers or high tech firms to move here.

Nonetheless, St Paul had to take action for a new I-Net before 2013, when the Comcast franchise was set to expire. The broadband stimulus projects provided an opportunity for the City to advance an application that would build its own I-Net.

The proposal would have built a fiber-optic network connecting muncipal facilities. But because St Paul didn't want to pay even 20% of the cost of this incredible asset (with a life that would be measured in decades), they found a private partner - a new company called Minnesota Fiber Exchange (MFE) - that would put up the matching funds and coordinate the project. The project would have put two conduits in the ground -- one to be shared by the City and the other to be used however MFE chose.

After the feds didn't fund the project, Ramsey County decided it would move forward with that same model. Its needs were not being met by the few private providers (largely CenturyLink and Comcast), who wanted to charge far too much. (This is common in markets with insufficient competition, which describes most of the United States in broadband today.) Even though the County would now have to foot much of the bill, it chose to continue the MFE approach.

In 2011, St Paul created an RFP for an I-Net solution from the private sector but the bids were insufficient or too expensive. Then, after a long period of silence (during which the City mostly refused to talk or listen to anyone on matters related to broadband), the City decided to throw its lot in with Ramsey County.

This is the present plan, as far as we can tell. Rather than paying Comcast its inflated rates to lease services, the County is paying MFE to build a network that will connect public facilities and be owned by the County. St Paul will lease capacity from that network. In building the County's network, MFE will build its own network right next to the County at the same time. The County will serve community anchors (schools, police, fire, etc.) and MFE will offer dark fiber to everyone else.

Comcast, which apparently viewed itself as the sole legitimate supplier of broadband to local government, has freaked out. As noted in a Pioneer Press article on the network:

"City and county taxpayers are facing significant risk by being put in a position of competing directly with many well-established service providers," said Mary Beth Schubert, a vice president of corporate affairs with Comcast in the Twin Cities.

Comcast is in the midst of creating a tempest in a teapot. And since it basically owns the St Paul Chamber of Commerce, the Chamber is helping. In two different articles, the Pioneer Press has printed Comcast's absurd comparison of this project with UTOPIA. For those unfamilar, UTOPIA is a consortium of Utah cities that planned to build a $500,000,000 network to connect 500,000 residents and businesses with the most advanced broadband network on the planet. The Ramsey/St Paul plan will connect over one hundred municipal facilities with broadband at a cost of between $10 million and $25 million. You say tomato, I say world's largest pumpkin. No comparison.

I don't know why the Pioneer Press lets Comcast get away with these exaggerations, but I wish it would at least result in future fact checking of such comments to see just how much manure they contain.

With regard to Comcast's chief objection, neither the City nor the County will be competing with the private sector. The City and County are serving themselves. It is MFE that could be said to be competing with Comcast (though Comcast typically refuses to lease dark fiber in favor of overcharging customers for lit services). Comcast's objection should be considered the same way we would laugh at Starbucks for claiming the County's coffee pots are an affront to the free market.

The City and County have made a business decision that owning their own network will result in cost savings to taxpayers and a better level of service. This is unsurprising and in line with what we have seen elsewhere, most recently documented in Florida's Martin County, where transitioning away from Comcast is saving millions of dollars.

Martin County is not an isolated case. We previously wrote of Comcast's onerous rate hikes for Palo Alto's I-Net in 2009. We have seen the same story play out in city after city - where Comcast dramatically increases the fees for community anchor institutions, recognizing that most local governments have few alternatives. One of the most impressive such networks is DC-Net, operated by the local government. As we noted in a report years ago, DC-Net saves the community over $5 million each year (real costs compared to the costs of duplicating those services by leasing from existing carriers).

Our case studies detailing how three communities built the fastest and most affordable networks in the nation notes that one saved more than $1 million by transitioning from leased lines to its own. Another dramatically increased capacity to schools and libraries while holding the price constant or decreasing it.

Smart local governments have recognized that they will need these networks for generations. The need for fast, affordable, and reliable telecommunications connections will only increase. And towns like Greenacres, Florida, are saving taxpayer dollars by moving from overpriced cable and telephone company connections to their own networks. Some local governments, like Arlington, Virginia, are finding the benefits go far beyond just cost savings and faster networks. Ownership provides more opportunities for schools and other community anchors to take full advantage of modern technology.

What we have a problem with is the extremely limited public benefit results from this particular arrangement. Though the City's own Task Force recommend that the City move in the direction of investing in a network that would both meet the needs of the local governments and encourage additional broadband competition, this plan is the most timid approach possible in that direction.

MFE says it will lay dark fiber throughout the city and make it available to everyone, but this is hardly a new idea. Several cities have done this and it has had the tiniest of impacts on broadband services for residents and local businesses. Most of us just want to pay for Internet access; we don't know how to lease dark fiber. And the cost of anyone connecting my house to dark fiber to sell me Internet access is prohibitively high.

What dark fiber is good for is cherry picking -- finding the highest revenue customers and serving them, which has the sad effect of making it harder for any network to serve everyone. This is why we have urged elected officials not to use this particularly approach. Our concerns are even greater as we do not even know if the County will fully own the network our taxes will build.

Consider Longmont, Colorado (which is also Comcast territory). As our podcast today discusses, Longmont built a fiber ring a decade ago and is now beginning to connect homes and businesses without borrowing additional funds. Santa Monica took awhile but with smart planning, has connected local businesses with 10Gbps connections - among the fastest connections available in any city. In both cases, having total ownership of the fiber enabled smarter investments in the future to benefit local businesses and residents.

Local governments and communities have an interest in building networks to spur economic development, create more choices for consumers, and otherwise improve the quality of life. Private companies have one mission - to profit. And while the profit motive is an incredibly important force, it is the wrong one to drive decisions about essential infrastructure.

These networks are increasingly the basis for much of the economy. We don't let GM and Ford make the rules for what cars are allowed on the roads and we shouldn't encourage a few companies to rule our access to the Internet.

So What Should We Do? First of all - we need more information. We need to see this contract and have a chance to comment on it before the City and County have made their final decisions. Some of those giving technical advice to St Paul were involved in the wretched Minneapolis Wi-Fi contract. Promises were made, particularly in regard to a digital divide fund -- but the contract was poorly written and that fund has all but disappeared. Our plan should be vetted by actual experts.

Our local governments should revisit the 2007 St Paul plan and the goal of building infrastructure that really enables more choices for local businesses and residents. In the telecommunications regulatory environment, local governments have few tools to ensure competition. The strongest one is their own procurement decisions -- they should be building one network and they should control it. If leasing dark fiber fails to create sufficient competition, they can change course. But if MFE's plan fails to encourage competition, local governments can do nothing but watch and hope for the best because MFE calls the shots on its network.

The City and County should have developed a telecommunications plan (at less cost than they have paid to develop this ho-hum approach) that would enable them to put conduit and fiber in the ground for essentially no cost over the past 5 years during other projects (when a road is already open for other construction, putting fiber and conduit in is trivial). Better late than never - get this process started.

And finally, if MFE moves forward with this plan, other carriers should be invited to get in the trench. We want more choices for our businesses and residents, so let's make sure other companies (including Comcast and CenturyLink) can put fiber and conduit in the ground at the same time our public money opens it up. Just having MFE offering dark fiber won't change the market much. But if other providers also have an opportunity, we might at least see a few benefits from competition.

In working with local governments, we are regularly frustrated to see a total misunderstanding of what it takes to create real choices for residents and businesses between Internet Service Providers. Just having more dark fiber rarely does it. Partnering with a company to build a ring doesn't do it. The cost of connecting homes and businesses is high, which is why the private sector has overwhelmingly failed to create competition.

But local governments can make these investments because they don't need to profit immediately. They can take 5-7 years to break even financially. In the meantime, they are creating new opportunities for jobs, better education and health care opportunities, and keeping far more money in the local economy than massive distant corporations like Comcast and CenturyLink.

I honestly don't like being controversial and don't want to categorically condemn MFE's plan, but we think the County (and indirectly the City) can do better than this plan. We certainly would not recommend any other local governments starting down this path until we see some actual results. MFE has reached out to me in the past regarding their plan and is welcome to respond in comments below.

For all of our frustration with its verbatim reprinting of Comcast's talking points, we want to give kudos to the Pioneer Press for calling on this decision to receive more scrutiny. This is a major decision -- it may be our best hope of actually encouraging competition in our community. We need to get it right. A good place to start learning about options is a recent article from The Line, "the broadband challenege."

Oh, and one for the road - Comcast is readying some upgrades to its network. Let's see who gets it first -- markets with real competition, or those where Comcast only has to worry about slow DSL from CenturyLink.

The USA Today occasionally covered the Lafayette muni fiber network fight as Cox and Bellsouth used every dirty trick conceivable against the community to shut it down. Reporter Rick Jervis looks back in now that the network is available to everyone in town.

The battle over broadband in Lafayette is part of a growing number of clashes across the USA that pit municipalities against telecom firms for the right to deliver Web access to homes and businesses. More than 150 local governments across the country have built or are planning to build cyber networks, says Christopher Mitchell of the Washington-based Institute for Local Self-Reliance, a non-profit group that advocates community development and local access to technology. Mitchell says those efforts often draw opposition in the form of misinformation campaigns, lawsuits from private providers or unfavorable state laws resulting from telecom lobbying. Nineteen states either ban cities and counties from getting into the broadband business — or make it difficult.

Minor quibble: the Institute for Local Self-Reliance (and particularly my work) is not Washington-based.

Like the toy in Crackerjack boxes, we cannot have a story about community networks without at least one blatant lie from some cable company employee. No disappointments here:

"Our initial objection was, and remains, that it is an unfair advantage for your competitor to also be your regulator," says Todd Smith, a Cox spokesman. "Many states prohibit government from competing with the private sector."

I challenge Todd Smith to name one way in which LUS Fiber regulates Cox. When the local government makes rules that impact either Cox or LUS Fiber, such rules have to be non-disciminatory or they violate state and federal laws. If incumbents think the community is violating any laws, we know that they know how to hire lawyers and file lawsuits. They've done it often enough.

The story details some of the benefits to the community since LUS Fiber opened shop -- including businesses moving to Lafayette to create new jobs:

Scott Eric Olivier moved his tech startup firm, Skyscraper Holding, from Los Angeles to Lafayette when he heard of the speeds and service offered by LUS Fiber. The same connectivity of 100 megabytes per second, which allows him to move large files across the Web for clients, would cost him several thousand dollars a month on the West Coast, he says. In Lafayette, he pays $200 a month. Another plus: He's getting what he paid for — exactly 100 megabytes per second — while his previous provider rarely delivered the promised speeds, Olivier says.

...

For Stephen Abshire, founding partner of the Gastroenterology Clinic of Acadiana, the city's fiber upgrade allowed him and his partners to finally make the switch to a fully electronic clinic. Health records, billing, pathology reports and endoscopy readouts are all reviewed digitally, he says.

The story profiles a local businessman who opposes the network and fought against it but still subscribes to it out of recognition that is "much quicker" than commercial alternatives.

LUS Fiber has historically kept its subscriber count close to its chest to avoid giving Cox any competitive information it is not required to divulge due to the more rigorous disclosure requirements on public entities than private providers. The story nonetheless reports that almost 1/3 of the city is subscribing already. Those who have stuck with Cox are paying less than nearby Cox customers as Cox has responded to competition with a host of special deals to prevent subscribers from switching to the far superior fiber-optic network.

Any hint that the Comcast-funded effort in Longmont to oppose authorizing the City to provide broadband services was anything but an astroturf campaign of lies has evaporated in the wake of its overwhelming defeat.

If there had been a shred of local legitimacy among the "Look Before We Leap" group that was run by Denver-based strategists, it probably would have kept its website up for longer than a few days after the election. If I were them, I would want to keep a record for the future.

But they don't. Because they were just a bunch of paid public relations people working a job. They didn't oppose Longmont's initiative, they didn't know anything about it. They were collecting a paycheck. And this is what they left behind:

The Times-Call has a hopeful reflection about the broadband battle (somewhat classier than the hilarious Neener Neener Neener poke at Comcast).

This time, lobbyists for the telecommunications industry spent even more than they did last time -- about $300,000 -- in trying to convince residents that the city having control over its own property was somehow "risky." Obviously, the lobbyists, including the euphemistically monikered Americans for Prosperity, were only concerned about the welfare of Longmont residents and the health of the local economy. They spent so much money to show just how concerned they were.

But the majority of the voters weren't buying what they were selling. People had the audacity to think for themselves and make up their own minds.

Personally, I would thank the anti-2A folks for pouring so much money into the local economy, except most of its spending was elsewhere. They did pop for a few ads in this newspaper, though, so for that they have my gratitude.

The author, Tony Kindelspire, goes on to note just how amazing it was to see everyone unified on an issue.

Many people who you would typically expect to find defending corporate rights above all else, and criticizing the inefficiency of government, were quite vocal in support of 2A.

As they should have been. Ask a local businessperson how Longmont having its own electric utility is working out for them. We have some of the cheapest rates in the country.

It takes leadership to stand up against big business lobbyists to act on behalf of what you think is right, not what's going to raise you the most amount of campaign cash the next time around. How very, very refreshing it was to see, and I hope it's a lesson that spreads far and wide.

I hate quoting so liberally from an article, but I want to make sure these important words are remembered. I hope the City takes seriously its responsibility to continue involving the public in important decisions about the digital future as it moves forward with the freedom to invest in infrastructure that every community should have regardless of how much money incumbent lobbyists pour into legislatures around the nation.

And I cannot help but remind my readers that this referendum would have failed by Minnesota standards, which requires a 65% supermajority. That is an incredibly tough ask when a major player like Comcast can get 40% of the population to vote for its position by spending a mere $300,000 while having zero support in the community.

Today is election day in Longmont, Colorado -- tomorrow we will find out if Comcast's record-breaking campaign of lies has scared enough voters to prevent the community from using its infrastructure to encourage broadband competition.

It looks like Comcast will break the $300,000 mark, funneling the money through the Colorado Cable Telecommunications Association. Two years ago, it spent over $245,000 in a similar effort -- setting the record for most amount spent on a local election in Longmont. Comcast and its anti-competition allies will spend approximately 10x as much as the total amount spent on the entire mayoral campaign. All to stop the city from having an alternative to the cable/DSL duopoly.

In a recent news story about the absurd spending level, the present Mayor struck an indifferent tone:

“It doesn't really matter at this stage of the game,” Baum said. “It's going to the electorate. The electorate will vote. And we will know on Tuesday how they voted – if they believe a $300,000 ad campaign, or if they believe the people they've entrusted their votes to.”

Both incumbents and challengers in the City Council race have unanimously endorsed 2A over the course of the campaign.

The Boulder Weekly has even weighed in on Comcast's campaign of lies and misinformation, tying it to their efforts two years ago:

In 2009, a similar campaign called “No Blank Check” was bankrolled to the tune of nearly $250,000, primarily by the telecommunications industry. That campaign, which was successful in defeating the measure, was labeled as misleading by city officials because it claimed money would be taken from police and firefighters to fund city telecommunications services.

“It was actually just the opposite of what No Blank Check was saying,” Tom Roiniotis, director of Longmont Power and Communications, told Boulder Weekly this summer. “They were saying we were going to have to lay off police and firefighters. Nothing could be further from the truth. … In fact, telecommunications would actually generate money for those departments. But they had models dressed up as firefighters, looking very sad.”

When we say that this campaign is orchestrated by Comcast, we should be clear -- virtually no one in Longmont opposes the 2A ballot initiative. And no one running for office opposes it! See the Boulder Weekly discussion about their support for 2A:

But we — along with every Longmont City Council member and candidate who responded to a Boulder Weekly questionnaire — agree that the city should be able to use its own network, despite the corporate powers’ concerns about losing market share to a new competitor. Taxpayers have already invested in this network and should benefit from it. We strongly urge a YES vote on Longmont Ballot Question 2A.

The Times-Call also supports the measure. Just how unanimous is the support? Consider this report from Longmont's Future:

At an event at Silver Creek High School last night, according to the Times-Call,
"Carroll and Levison were joined onstage by Mayor Bryan Baum and his challenger Dennis Coombs, at-large candidate Ron Gallegos, Ward 1 candidate Suzzanne Painter and Ward 3 Councilman Sean McCoy.

One question, on Ballot Question 2A, drew immediate solidarity from the panel.
"Everyone, on three, say yes or no on 2A," Baum told the other candidates with a grin. "One, two, three ..."

"YES!" they all echoed.

"That is the one thing we all agree on," Baum said."

You can listen to a local radio story about the referendum here or at the bottom of this page, where it is embedded for the future.

Comcast's campaign of lies has gone so far as to take out a full-page ad inventing a story of impropriety, accusing the City of somehow colluded with Alcatel-Lucent to scam the public.

The Times-Call looked into the allegations and found nothing but smoke and mirrors -- exactly the tactics of bait-and-switch you would expect from an out-of-town astroturf campaign:

A group against Longmont Ballot Question 2A claims city officials coordinated a push for the issue with telecom company Alcatel-Lucent, a claim the city denied, saying that early email contacts with the company were taken far out of context.

The opposition group Look Before We Leap said the charge would be part of their advertising against 2A as the election campaign enters its final week. The group spent about $2,800 to look through city emails related to the ballot question, which, if passed, would lift state restrictions on how Longmont can use a fiber-optic loop it built in 1997.

The group's findings included three messages from an Alcatel-Lucent representative offering information and suggestions for a supportive campaign to Mayor Bryan Baum and Longmont Power & Communications director Tom Roiniotis. All three were sent before Aug. 23, the date the City Council put the question on the ballot, after which city staff could not be involved for or against the issue, though elected officials could.

...

Roiniotis called the charges ridiculous and said there was no relationship. He said he had received many "sales calls" from telecommunications companies interested in Longmont's fiber system; the main difference here, he said, was the offer of help.

"I made it perfectly clear to them that they could do anything they wanted to do, but that the city could not be involved in advocating for it," he said. He also noted that the city had been aware of much of the information sent by Alcatel-Lucent since 2009, the last time Longmont tried a ballot issue to lift the restrictions.

....

In the email messages, Jennie Burgoz of Alcatel-Lucent offered contacts and information related to successful municipal telecommunications campaigns in Chattanooga and Bristol, Tenn. She also suggested ideas such as "tricking out" Baum's campaign vehicle as a mobile fiber vehicle and working with attorney and advocate Jim Baller, who was familiar with a similar campaign in Illinois.

Comcast's "Look Before We Leap" group has even attacked the actual grassroots pro-2A groups for how little they have spent!: [from the same article as above]

Merritt said he also had concerns that there had been no reporting by Longmont's Future, a pro-2A website. That amused its proprietor, Jonathan Rice, who is the only person operating the site.

"It's not really so much a group as it is 'me,'" Rice said. Between a couple of Times-Call ads and the website, he said, he had spent $353.

"I don't have $300,000 to work with ," he said. "So I'll do my $300 and see how that goes."

Rice has invested in an online pro-2A ad on the local newspaper's website.

Some of the pro-2A folks have responded to these trumped-up charges with the following press release:

$297,000 On A Local Election? Isn't That A Little Crazy?

Look Before We Leap - a front group for the Colorado Cable Telecommunications Association - continues to block Longmont's efforts to partner with private industry.

In a new twist on the saga of Ballot Question 2A, which would re-establish Longmont's right to partner with private industry to use its fiber-optic ring, Comcast-sponsored group 'Look Before We Leap' has now spent over $297,000 (http://www.ci.longmont.co.us/city_clerk/election/candidates/documents/LB...) on robo-calls, door-knockers, and most recently a full-page ad in the local Daily Times-Call to mock the city's efforts to partner with private employers.

The city of Longmont, which attempted to win the valuable gigabit network from Google last year, is prevented by state law from using its fiber-optic network without a voter referendum. That is what is on the ballot this November 1st - with Comcast's monopoly over telecommunications at risk.

In recent public comments by Google VP of Access Services Milo Medin, he specifically identified political hurdles such as these as a cause for automatically removing cities from consideration. As Google reviews additional cities to partner with, Longmont will continue to be disqualified if Question 2A does not pass.

Question 2A specifically supports the City working “either directly or indirectly with public or private sector partners.”

"Look Before We Leap have tried to pretend that this is a grassroots effort," said Jonathan Rice, editor of the pro-2A website longmontsfuture.com

"But the truth is that not one single donation over $50 has been declared by the front group... other than those of the Colorado Cable Telecommunications Association."

The organization has spent more than ten times what the rest of Longmont's elections put together will spend, and flies in the face of elected public officials' opinion.

"Every single candidate for office and every incumbent, in every race, supports this measure," continued Rice. "But Comcast and its friends are more interested in profit than progress, and continue to run a smear campaign to spread misinformation and outright lies - they recently posted Mayor Baum's name as an opponent of 2A when he is actually a vociferous supporter."

With Longmont reeling from the loss of hundreds of local jobs over the last few months, it could badly use a shot in the arm from a major employer - but without 2A passing, that won't be Google.

"We tried our darnedest to get them to come here," said Rice. "But without access to the fiber optic ring, they just couldn't quite bring themselves to be part of Longmont's future."

Question 2A is a battle between the rights of citizens and local businesses versus the desire of out-of-town corporate interests to maximize profits at their expense.