Each entity expects to see significant savings as they eliminate leased lines. Woodstock's annual projected operational costs will be $33,784, reducing municipal connectivity costs by about $13,448 per year by eliminating leased lines. Woodstock will also enjoy the ability to budget from year to year without the threat of unpredictable rate increases from current provider Comcast. City Manager Roscoe Stelford told the Northwest Herald:
The potential economic development opportunities, allowing area businesses to buy and use the new network, alone makes the project significant, he said.
“Having that high-tech infrastructure in the City of Woodstock is going to be another feather in our cap for us to secure economic development opportunities,” Stelford said.
The network will bring a 10 gigabit fiber back bone from the MCC campus through downtown to the County Government Center. Laterals will branch out to municipal and school facilities. The current plan includes gigabit connections to 24 municipal buildings, public safety sites, schools, recreation centers, a library, a work force center, and an opera house.
Comcast now charges District 200 approximately $109,000 per year for connectivity. When leased lines are eliminated, the District will spend approximately $48,500 as their share for operational and management costs. In addition to saving over $60,000 per year, District 200 will be able to offer students future-proof infrastructure. From the Woodstock Independent:
“It’s an exciting position to be in, and there are other things we’ll see savings on,” said [school] board member William Nattress. “Technical refreshment, new applications will be easier and less expensive now that we have this backbone.”
District 200's share is the largest because it requires more connections. Budgetary uncertainties at the state level have created concern for District 200 so Woodstock and McHenry County will cover District 200's $806,526 share with an interest-free, four-year loan.
For the total project, McHenry County will be responsible for $760,526; Woodstock will contribute $386,624; MCC will provide $54,423; and the Emergency Telephone System Board will contribute $105,800.
The Northern Illinois University's Broadband Development Group will coordinate the project; the network may be up and running as early as summer 2015.
There was some good news at the end of August in Georgia, just in time for the new school year: a fiber optic network spanning 3,600 miles and potentially tying together up to 330 schools with 10 gigabit connections was announced. Dubbed the “Education Exchange,” the network is the product of an agreement between the rural cooperative North Georgia Network (NGN), private cable provider ETC Communications, and a private fiber optic ISP and infrastructure company called Parker Fibernet. Each of these three carriers’ existing fiber optic assets will provide a piece of the network, and all are connected to each other and to the broader internet in Atlanta.
While formed through a partnership of cooperative and private providers, the network will be governed by the schools themselves, which are spread throughout 30 different counties and reach across the northern third of the state, from the western border with Alabama to the eastern border with South Carolina. Both public and private schools will be able to connect.
The new network should allow schools to realize some significant cost savings from replacing phone lines with VOIP and dropping slower leased data connections. More interesting, however, are the educational and administrative applications of such fast direct connections: video conferencing for teachers and administrators between and within school districts; accessing bandwidth-intensive online educational materials; expanding access to wi-fi devices throughout schools; and pooling purchasing power of many districts to get discounts and expanded digital course content.
How each district and each school use the network will be up to them, but the possibilities are considerable. Some of the early schools that beta tested the network have already experimented by hosting real time virtual music collaborations between schools. Paul Belk, NGN’s CEO, described the motivations driving his cooperative to establish the network:
“The strength of our communities, our economy, and workforce all starts in our schools...as a community-owned company, it’s our job to give back and use our resources to better the next generation.”
NGN has been connecting business parks, hospitals, government buildings and other anchor institutions in northern Georgia since it’s inception in 2007. It received a large boost in 2009 when it was chosen for a Broadband Technology Opportunities Program grant as part of the federal stimulus effort. With $33.5 million in federal funding, supplemented by nearly $10 million in additional state and local funding, NGN built out an 1,100 mile network in the hilly country north of Atlanta, bringing high speed connections to areas previously only reached by slow and unreliable DSL.
Lexington, Kentucky, the second biggest city in the state with the second slowest broadband speeds in the nation, has announced plans to issue a request for information for a gigabit network within the next six months. The idea is to gauge interest from private providers in forming a public private partnership and get at least a rough estimate of the costs and benefits of a city-wide fiber optic network.
The Lexington area currently has average download speeds of 16.2 Mbps, which puts it 38th among cities in Kentucky alone. While many in Lexington have been unhappy with slow speeds, poor reliability, and high prices provided by the incumbent Time Warner for years, the local government appeared divided last spring over the potential Comcast-Time Warner merger. Some felt, inexplicably, that service would improve after the second most hated company in America was acquired by the most hated. But others realized the need for competition, and during the course of renegotiating Time Warner’s expiring cable franchise over the last year, city staff have been meeting with private providers to determine how to improve access.
"We're going to be looking for partners who can create competition and who are willing to serve neighborhoods throughout Lexington," Gray said. "Increasing our Internet speed is crucial, but so is tackling the digital divide."
Whether or not private providers will answer the mayor’s call with a deal that works for both the city and their bottom line remains to be seen, but Gray does at least seem to grasp the need for competition to break up the local monopoly. Step 1 is admitting you have a problem - the next steps take some real (political) will. Others have given this deeper thought:
Roy Cornett, who attended Tuesday's meeting and has been passionate about improving Lexington's Internet speed and expanding access, said Lexington trails not only Louisville and Russellville, but Glasgow and other Kentucky cities. Cornett, an appraiser, said that some estimates show that it could cost as much as $200 million to provide the fiber-optic infrastructure to make Lexington a "gigacity."
That might sound like a lot, but it really isn't, Cornett said.
"We were going to spend $350 million on a new Rupp Arena," Cornett said. "This is the most important infrastructure investment we can make."
Last year we reported on a deal between Google Fiber and North Kansas City. The provider entered into a long-term lease to use LiNKCity dark fiber to incorporate into its area deployment. The City recently announced it will now enter into a public-private partnership with DataShack to bring fiber to local businesses and residents. Residents will receive free high-speed access. From the City's announcement:
The partnership between these two companies will enable residents to experience Gigabit speeds for FREE. On January 1st, 2015 all existing residential customers will be upgraded to free monthly 100 mb internet service. New customers after January 1st will have the opportunity to choose between three service options; free monthly gigabit internet service with a $300 installation fee, free monthly 100 mb internet service with a $100 installation fee, or free 50 mb internet service with a $50 installation fee.
A Kansas City Biz Journal article reports that North Kansas City will retain ownership of the infrastructure and DataShack will bring free gigabit Internet service to the public library, city churches, and all public schools. Profits and losses will be shared equally but the City's losses are capped at $150,000, including the capital investment. DataShack will operate and maintain the network.
"It's a win-win for the city," said Byron McDaniel, the city's communications utility director. "It's really giving back to the community what they've invested into the network."
Today, liNKCity has about 460 business customers in North Kansas City who pay anywhere from $80 to $500 a month for high-speed connections. DataShack plans to keep business rates the same while cranking up speeds.
About 440 residential customers currently buy hookups from liNKCity. Brown said he expects the free service to make that number double or triple.
Frankly, we don't yet understand this business model but as we learn more, we'll write about it. LiNKCity has always been an odd network as it was funded with revenues from a casino, which seemed to change the incentives for how quickly it was expected to break even and pay for itself financially.
By building a fiber line to allow some local businesses to get next-generation Internet access, Rockport became the first municipal fiber network in the state of Maine. Town Manager Richard Bates joins us for episode 115 of the Community Broadband Bits podcast.
We discuss the financing behind the network and their partnership with local Internet Service Provider, GWI, to improve access to the Internet.
Bates also explains how they had to ask voters for authorization to use a tax-increment financing approach to paying for the network to spur economic development. Nearby communities have been watching to see what happens.Read our story about this network here.
We want your feedback and suggestions for the show - please e-mail us or leave a comment below. Also, feel free to suggest other guests, topics, or questions you want us to address.
This show is 15 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed.
Rockport, a coastal town of just 3,300, became a statewide leader last month by launching Maine’s first municipal broadband network. Offering symmetrical gigabit speeds to businesses and residents, Rockport’s network is a carrier-neutral dark fiber system, with local private provider GWI offering retail services.
The reach of the network is limited, as it consists of only 1.2 miles of fiber. While only about 70 homes and businesses currently have the option to purchase a connection, GWI offers symmetrical gigabit per second internet access for just $69 per month and the city has left the option open to expand the network in the future.
As noted in a Bloomberg View article on the network, it massively outpaces the only broadband competitor in Rockport, Time Warner Cable. Time Warner also offers a $70 service package, but its download speeds are 20 times slower and its upload speeds 200 times slower.
The network was the product of a partnership between the town board, GWI, the University of Maine system, and Maine Media Workshops + College. Maine Media is a nonprofit college with 1,500 students learning photography, videography, and other digital media skills, and has a large economic footprint in such a small town.
Students’ coursework requires the storing and sharing of massive files, something that was previously difficult or impossible to accomplish given limited network capacity. Town officials are hoping that the new network will not only allow students to learn more easily, but enable them and others to establish small businesses in town.
U.S. Senator Angus King, a vocal champion of broadband access, was among the officials on hand last week for the official unveiling ceremony. Speaking to the need for greater internet access, Senator King stated:
“In my opinion it’s exactly like water, it’s exactly like electricity, it is a public utility that is necessary in order for our economy and our country to flourish…We want to work where we live, rather than live where we work."
The total cost of the project is estimated at $60,000, half of which came from the University of Maine’s Networkmaine program and half of which came from the Town of Rockport. Interestingly, the town’s contribution came from tax increment financing (TIF), and required town voters to approve two measures to rewrite the local TIF statute and allow funds to be used for fiber optic investments.
Despite this encouraging sign in Rockport, a recent report from a Montana-based research firm ranked Maine 49th out of the 50 states in broadband availability and speed. Hopefully other Maine communities will be inspired by Rockport to look at their own broadband landscape and have a conversation about how they can expand internet access.
San Leandro, a Bay Area city of about 85,000 bordering Oakland, is in the news for its fiber optic infrastructure policies. A recent article in the San Jose Mercury News describes how this post-industrial city is turning itself into a center for tech jobs and investment through cheap rents, streamlined permitting, and the ease and low cost of fiber connectivity for businesses in some areas of town.
We featured San Leandro in an episode of our Broadband Bits podcast last year, when Christopher spoke with San Leandro Chief Innovation Officer Deborah Acosta and a Lit San Leandro consultant Judi Clark. Acosta and Clark gave the details on San Leandro’s innovative public-private partnership, which combines smart public investments in conduits and “dig once” concepts with private investment in the actual fiber optic strands themselves. The city has been able to access fiber for it’s own needs at minimal cost, while some businesses have access to up to 10Gbps connectivity, either through privately provided lit fiber or leasing their own dark fiber.
As the Mercury News article notes, the fiber assets have begun to pay off. Several technology parks have taken up residence in the area, including a hub of 3-D printing companies, sharing space and ideas while taking advantage of incredible data transfer speeds. One entrepreneur quoted in the article describes the office park, located in a former car factory, as “the world's largest cluster of 3-D desktop printer companies.”
The article also notes the growing awareness of San Leandro’s economic comeback, and the role played by fiber optic infrastructure:
"San Leandro is establishing itself as a city-scale lab for innovation. Only months ago, (it) was a relatively unknown Bay Area city," said Greg Delaune, CEO of UIX Global.
Lit San Leandro, the private company that worked with the city to do the initial fiber runs, is apparently also in talks with other Bay Area cities on potential similar projects. However, it is worth noting that there is no plan for connecting residents and this model may in fact make it more difficult to expand residental gigabit access.
The business case for residential access is always hard but is improved when high margin businesses can be connected at the same time. But when high margin businesses have their needs met first, there is little incentive for a profit-maximizing firm to invest in connecting lower margin customers, a phenomenon called cream-skimming in economics.
Communities should understand there is no magic bullet in solving the problem of expanding high quality Internet access. Lit San Leandro is seeing success but may not be the best model for all communities.
Just over a year ago, we wrote about Hamilton’s plans to expand their extensive fiber optic infrastructure to offer services to schools and businesses in the area. Last month, the first example of such expanded services came online, with three area schools getting fiber optic internet connections through a partnership between the City utility and the Southwest Ohio Computer Association Council of Governments (SWOCA-COG).
The press release announcing the collaboration describes SWOCA as:
“...a council of governments consisting of 33 public school districts plus several private and charter schools in the area. The organization provides numerous software and technical services to schools, libraries, and municipalities as well as very high capacity Broadband Internet.”
Under the arrangement, the City will be responsible for the physical connections and laid fiber, while SWOCA will provide the active internet service. This approach fits the city’s stated goal of remaining a source of neutral infrastructure:
“The City will remain carrier-neutral and does not intend to compete with providers or offer end user services directly. Instead, Hamilton’s goal is to make an additional source of last-mile fiber available to service providers at competitive rates to expand the availability of business-class broadband services in our community. As such, service providers will have equal access to all facilities, transport, and other services on Hamilton’s network.”
With the growth of online testing, electronic textbooks, and other online media in the classroom, existing connections were proving inadequate. The schools will pay the City $18,000 per year for connectivity, decreasing their costs while increasing bandwidth. From the press release:
“‘Schools in the region are getting more technology focused. Regionally, we've seen school bandwidth needs grow as much as 60% in a year. The City is in a great position to help us meet this demand,’ said Marc Hopkins, Network Services Manager for SWOCA.”
Hamilton has had a fiber optic network for internal government use since 2004, and in 2012 began contemplating ways to leverage this existing asset to spur economic development and expand educational opportunities. The City did a feasibility study on network expansion, and in July of 2013 authorized a city team to find partners to work with.
Mark Murray, the project manager for Hamilton’s broadband initiative, made clear the City’s intention to expand further: "We see this as just the first step to bigger things to come with broadband in Hamilton," Murray said.
With a meeting on July 17th of city officials, local residents, institutional stakeholders, and technology consultants, Bozeman officially began its process of creating a master plan for its Broadband Initiative. The process will be lead by Design Nine, a consulting firm based in Virginia, and will include a survey of existing assets and needs, feasibility studies, and public outreach, among other elements. The entire process is expected to take about 6 months, with the end goal being a road map for improving access and affordability for businesses and public institutions in the Bozeman area.
The Montana city of almost 40,000 was initially inspired to examine the issue of municipal broadband by former Montana State University Chief Information Officer (CIO) Dewitt Latimer, who had previously worked on the Metronet Zing open access network in South Bend, Indiana, an innovative public-private partnership involving the University of Notre Dame that we have covered before. Unfortunately, Lattimer passed away in early 2013. But the seed of an idea had been planted.
In March of 2014, the City of Bozeman issued an RFP for a design firm willing to develop a plan for how the city could expand internet access going forward. After receiving a surprisingly competitive group of 12 responses, City officials eventually chose Design Nine to undertake the comprehensive study and make recommendations.
The City was able to secure $55,000 in grants from state and federal sources to fund the planning process, and solicited a further $80,000 from supportive local institutions including Deaconess Hospital, the local school district, and several local Tax Increment Financing (TIF) districts.
The business community has been a driving force for the initiative as well, with the Bozeman Area Chamber of Commerce committing $5,000 to the planning fund and expressing its enthusiastic support in a letter to the Mayor in April:
Affordable broadband access is essential to the health of our community. Technology firms, banks, businesses, and startups require fast, reliable, and secure connections to their clients. Broadband connectivity is presently only available at high prices or at disparate locations. We believe that increasing the availability of affordable broadband is essential to [the] well-being of this community and we are invested in making this critical infrastructure widely available.
The City’s own press release about the July 17th meeting highlights the competitive atmosphere among Montana cities as they strive to upgrade their communications infrastructure and foster economic development:
Several Montana cities are evaluating their broadband options. The Montana Economic Revitalization and Development Institute (MERDI) built a fiber optic ring in Butte utilizing a public-private partnership with Fatbeam. MERDI’s fiber ring lured a Bozeman-based internet security firm, Hoplite Industries, to uptown Butte. Missoula is about to release the results of their community broadband feasibility study. Livingston is also considering developing a broadband master plan.
According to David Fine, an official with the City’s Economic Development Department (which is overseeing Design Nine’s planning process), the city would be open to public ownership of fiber infrastructure if that ends up being a recommendation of the nascent master plan. The city has no interest in operating the network itself, however, and does not have a municipal electric utility that might fit easily into that role. From the City’s press release:
The City envisions a public-private partnership model in which broadband providers, anchor businesses, School District 7, the City of Bozeman, and Bozeman Deaconess Hospital collaborate to support a new community fiber optic network. The master plan will investigate options for public-private partnerships, viable business and financing models, and potential build plans. It will also explore regulatory options that can speed the deployment of broadband by the private sector.
Fine also emphasized the potential for direct public savings from a new fiber network. The city and county governments pay $70,000 and $50,000 per year, respectively, for their data connections from a private provider. The school district is charged $105,000 per year for internal ethernet connections, and another $50,000 per year for a shared gigabit connection to the broader internet. With recurring costs that high, it is not hard to imagine a capital investment in fiber infrastructure paying off in the long run through significantly lower monthly bills.
The local Deaconess Hospital stands to benefit from a new public network as well, as they strive to meet electronic records requirements. Their need for fast and secure connections has grown quickly in recent years, as they have expanded their footprint to various clinics around town and look to make telehealth and remote medicine a viable option for patients in a large, mostly rural state.
The problem is not that fiber is nonexistent in Bozeman. There are several firms in the area focused on cloud computing, including the tech giant Oracle. Large, well-capitalized firms that can afford to run their own fiber lines or exert serious leverage in negotiating prices can often meet their fiber needs. The problem is bringing affordable and adequate connectivity to small and mid-sized businesses, startups, schools, hospitals, and ordinary citizens.
For local news coverage of the plan, highlighting its importance for local businesses, watch the video below:
Amanda Gloyd, marketing and community relations manager, told the Daily Reporter:
Since SMU first began offering Internet service to customers the amount used by customers has increased and we expect to see that continue. For example, the average peak usage from customers in the fall of 2010 was 125MB and today it averages around 800MB with maximums over 1,200 MB. The project to convert the whole town of Spencer will take several years and we continue to develop plans for future projects.
In April, the SMU Board of trustees approved a modest rate increase for video and Internet access to help defray increased costs for video content and increased demand on the system. The last time rates went up for video service was early 2013; residential Internet access rates have remained the same since November 2011.
New rates went into effect on June 1. Internet access rates range from $20 per month for 1 Mbps/256 Kbps to $225 per month for 100 Mbps/10 Mbps. Basic level video service begins at $14 per month; "Basic Plus" is $50.75 per month. Digital service and a range of channel choices are available as add-ons.
SMU also provides voice and partners with T-Mobile to provide wireless phone service in the community. The network began serving customers in 2000.
Spencer, population 11,300, is located in the northwest section of the state. In the Community Broadband Bits podcast episode #13, Chris spoke with Curtis Dean of the Iowa Association of Municipal Utilities (IAMU). Dean shared a story about Hansen's Clothing, a local upscale clothier in Spencer. Thanks to the presence of the SMU network, Hansen's was able to expand its sales to the online marketplace. Hansen's was struggling until it obtained the ability to reach clientele in New York and Los Angeles. The fresh business allowed Hansen's to flourish.
In Orwellian fashion, many of the examples offered as disasters are actually tremendous success stories. Many of the figures used as contemporary evidence against municipal broadband are based on case studies of cable television systems from a report that is seven years old. Even if it were still timely, its conclusions have been thoroughly debunked.