Can’t get telephone or Internet service? Have you tried starting your own company? In 1998, John Reigle did just that with the support of the community and Michigan State University. Today, Allband Communications Cooperative provides not only telephone service, but also cutting-edge, high-quality Internet access and environmental research opportunities in rural Northeastern Michigan.

A Story Of Promise, Betrayal, And The Telephone Company

We connected with Allband representatives who shared details about Allband's interesting and dramatic history as told by Masha Zager back in 2005. They kindly provided updates and let us know what's in store for this by-the-bootstraps effort that started in the woods of Michigan.

When John Reigle moved out into the woods past the small town of Curran, Michigan, he didn't intend to start a brand-new venture. He simply wanted to build a home and work on his consulting business; he just needed telephone service.

The large incumbent telephone company GTE (which later became Verizon, which still later sold off this service area to Frontier) had assured Reigle that the lot where he planned to build his house would be easy to connect to their telephone network. They quoted him a price of about $34 and scheduled an install date. Trusting that the telephone company’s representatives knew the service area, Reigle moved forward with his plans to build.

After he finished constructing his house in 1998, Reigle contacted the telephone company to finalize his service connection. Despite the earlier assurance that his location would not prove a problem, Reigle found that he was miles away from the GTE network. This time, the company quoted $27,000 to run a copper telephone line from the highway to his new house. 

His consulting firm could not operate without a telephone so he decided to bite the bullet and agree to the steep price. GTE rescinded its quote, however, and no matter how much Reigle offered, the company would not run telephone service to his new house.

For local schools, finding ways to cut costs can be challenging but allows more money to be spent directly on students. While trimming small costs here and there adds up, eliminating leased lines from telephone companies and making the change to VoIP phone systems can be a big savings with improved service. Pitt County Schools in North Carolina are one of the latest to upgrade and save big.

Goodbye Copper, Hello Fiber

The district owns a fiber optic network and has ditched copper wire telephone service in favor of a new VoIP system at nine of its facilities. The cost to replace the phone system at those facilities was $32,000 but the district reclaimed $13,000 so far by eliminating the need to lease copper phone lines.

District officials plan to replace all the phones in the district with a fiber based system at a cost of $210,000, pending the availability of funding. They estimate annual savings will be approximately $107,000, so the project will pay for itself in less than two years.

More Than A Trend

Carroll County Public Schools (CCPS) in Maryland and Austin's public schools in Texas found that switching from traditional phone lines to VoIP supported by fiber saved their districts significantly. CCPS began saving approximately $400,000 per year when they partnered with the county and several other entities to develop the Carroll County Public Network (CCPN). Austin Independent School District (AISD) collaborated with several other entities in Austin, Texas, and AISD’s investment in their network paid for itself in less than 3 years. In 2011, AISD estimated they saved almost $5.8 million in telephone and Internet connectivity avoided costs.

It's Not All About The Money

In Pitt County, school officials are finding better service is an added benefit:

Iowans in the small town of Osage have been able to obtain cable Internet access from the community’s municipal utility since 2001. The community is about to take the next step; Osage Municipal Utility (OMU) is acquiring a fiber-optic backbone from a private provider. The purchase will get them started on what will eventually be a Fiber-to-the-Home (FTTH) upgrade.

Serving Osage For More Than 125 Years

Osage, the Mitchell County seat, is home to about 3,600 people and located in north central Iowa. The electric utility began as Osage Electric Light, Heat and Power Company in 1890. After several ownership changes, the municipality became the owner in 1941. In 1959, the utility began supplying natural gas and in 2001, the utility added a communications system. In addition to Internet access, OMU also began offering cable TV and telephone service.

OMU is also developing a Voluntary Community Solar Program in which customers can purchase units of Solar Array capacity and in return they receive a production-related credit on their monthly utility bill.

Another Local Tool

Josh Byrnes, general manager of OMU, described the backbone as “another tool in the economic toolbox.” He noted that the line will create opportunities for people outside of OMU’s service area that live along the backbone to potentially obtain service from private providers.

In addition to providing FTTH to customers in the future, Byrnes noted that OMU will also be bringing much needed redundancy in the area. Incumbent Omnitel Communications is the sole provider of fiber-optic services in Mitchell County. OMU will offer fiber in Mitchell, one of the towns in the county where Omnitel has no fiber presence.

“We are simply getting connectivity to Osage and build out from there. There are going to definitely be opportunities for savings to our rate payers long term. Even more important is the dependability of services moving forward. It’s hard to put a price on that.”

The NTCA-Rural Broadband Association this month awarded the Highland Telephone Cooperative (HTC) of Sunbright, Tennessee, its national certification as a “Gig-capable” provider, reports the Independent-Herald.

HTC serves Scott and Morgan counties in Tennessee and McCreary County in Kentucky and is now one of 85 Gig-certified company/cooperative providers in the nation. The certification recognizes rural communities that are at the cutting-edge of broadband technology, offering Internet service of up to at least 1 Gigabit per second (1,000 Megabits per second or Mbps). The association launched this national campaign in the fall of 2015. 

Years of Planning

HTC completed its $66 million fiber-optic network within the last year; 1 Gig capacity Internet service is available to all 16,5000 members reports the Independent-Herald.  The six-year project upgrades the cooperative’s old copper network. Highland Telephone CEO Mark Patterson: 

"This gigabit certification caps off years of careful planning, investing and building a brand-new fiber network in our area...All along, we knew our commitment was worth the effort so our friends and families in this area could keep their rural lifestyle without sacrificing world-class connectivity."

The upgrade included more than 2,700 miles of fiber by the cooperative's crews and contractors — enough to stretch from Highland's office in Sunbright to Vancouver in British Columbia, the Independent-Herald reported.

"Our area lacks interstates and many economic advantages that other communities enjoy, and we've suffered through some extremely high unemployment in recent years," Patterson said. "An asset like a gigabit-capable network can be our competitive edge when it comes to bringing in industry and growing existing businesses."

85 Gig Networks

This is episode 224 of the Community Broadband Bits Podcast. ILSR research associate and MuniNetworks.org writer, H.R. Trostle, joins the show to discuss the recent report on North Carolina's connectivity and the importance of cooperatives. Listen to this episode here.

H.R. Trostle: The telephone cooperative are very used to serving these very sparsely populated rural areas in North Carolina. That's what they were designed to do. That's why they were made.

Lisa Gonzalez: This is episode 224 of the Community Broadband Bits Podcast from the Institute for Local Self-Reliance, I'm Lisa Gonzalez. Recently, we released a report focusing on the availability of high-quality Internet access in North Carolina. H.R. Trostle, a research associate at the Institute and one of our authors on MuniNetworks.org, analyzed data from several different sources and she's talking to Chris this week to discuss her conclusions. She and Chris, who co-authored the report with her, discovered that municipal networks and cooperatives have an important role to play in North Carolina. Take a few minutes to check out the report and check out the detailed maps that show the results of their analysis. The report is titled North Carolina Connectivity: The Good, The Bad, and The Ugly. It's available at ILSR.org and MuniNetworks.org. Now here are Chris and H.R. Trostle, from the Institute for Local Self-Reliance, discussing in detail their recent report and their findings on Internet access in North Carolina.

Christopher Mitchell: Welcome to another edition of the Community Broad Bits Podcast. Coming to you live today from the Institute for Local Self-Reliance offices in Minneapolis, with H.R. Trostle, the co-author of our new report on North Carolina. Welcome to the show.

H.R. Trostle: Thanks Chris, it's great to be here.

Christopher Mitchell: Hannah.

H.R. Trostle: Hi.

Christopher Mitchell: I thought we would start with a broad overview of what did the report cover.

We have extensively studied the connectivity situation in North Carolina and just released our report, “North Carolina Connectivity: The Good, The Bad, and The Ugly.” Now you can hear from the report authors, H.R. Trostle and Christopher Mitchell, in our most recent PRX coverage.

We spoke with both authors who gave us a recap of the situation in urban and rural North Carolina. They explained how they examined the data and came to the conclusion that, while urban areas are served relatively well by big private providers, the same cannot be said in rural areas. Unless a muni or rural telephone or electric cooperative offers Internet access in a rural region, odds are rural residents and businesses just don’t have access to FCC defined broadband speeds. Audio coverage runs 5:22.

Listen to the story on PRX…

You can also download the report to dig into the details and learn more about connectivity in North Carolina.

In late July, the FCC released a Notice of Apparent Liability (NAL) in which it found the telecommunications giant AT&T Southeast liable for a $106,425 forfeiture. The agency also ordered the company to return $63,760 of E-rate funds it described as “improperly disbursed.” AT&T overcharged two school districts in Florida and, in a response released last week, are trying to justify their pilfer by blaming the E-rate rules and the schools themselves, much as a criminal blames victims for being such easy targets.

Funded By Phone Users

E-rate funds are collected as a surcharge on telephone bills; the funds go to schools to help pay for telecommunications costs at schools, including telephone, Internet access, and infrastructure costs like fiber network construction. The amount a school district receives depends on the number of students in the district that qualify for free and reduced lunches; schools with higher numbers of low-income students are reimbursed at a higher rate. Given that many of our schools are funded through property tax rolls, this means that schools in poorer neighborhoods that are more likely to need help with their budgets receive the higher reimbursement rates.

According to the program rules, phone companies and Internet Service Providers (ISPs) that participate are required to offer the “lowest corresponding price” to schools. Providers aren’t permitted to charge rates that exceed the “lowest corresponding price” or bid higher than that price on contracts to serve similarly situated entities if those entities are eligible to receive E-rate funds. School districts do not carry the burden of getting the lowest corresponding price - telephone and Internet access providers are responsible to ensure that they offer the lowest price in exchange for the opportunity to participate in the program. Between July 2012 and June 2015 alone, AT&T received $1.23 billion in E-rate funding nationwide.

Filching In Florida

Time to check in at Harford County, Maryland. When we last reported on the Harford Metro Area Network (HMAN) in July 2014, it had only been lit for a few months. Now, more than 100 public facilities are connected to the network and more are expected; the latest will be Bel Air, Maryland.

Saving With County Connections For VoIP

A recent GovTech article reported that the Board of Town Commissioners voted 4-0 to invest approximately $25,000 in a new VoIP system that will use HMAN for telephone service. The new system will serve 65 new phones and will include the software for the new system. Apparently, Bel Air sought cost estimates to replace their old traditional system with VoIP with a private provider and the estimates were more than $65,000 beyond what the city had budgeted for the project.

We often point to significant public savings when local government uses publicly owned infrastructure for Internet access, but switching from traditional phone service to VoIP via a muni can reduce communications costs even more. In places such as schools, government offices, and other administrative facilities where there are multiple lines, the budget for telephone service can be astronomical. VoIP eliminates leased lines and, because a fiber-optic network like HMAN is designed with redundancy in mind, users can expect reliable connections.

In addition to saving substantially, Bel Air’s new system will be compatible with the systems used by Harford County Government and the Department of Emergency Services.