Tennessee Potential Partnership Between Morristown Muni and AEC Co-op - Community Broadband Bits Podcast 203

In Tennessee, this month marks 10 years of Morristown Utility Systems delivering fiber-optic triple-play service to the community, including great Internet access. But those living just outside the city and in nearby cities have poor access at best. MUS General Manager and CEO Jody Wigington returns to our show this week and we also welcome Appalachian Electric Cooperative (AEC) General Manager Greg Williams to discuss a potential partnership to expand Morristown services to those that want them.

As we have frequently noted, Tennessee law prohibits municipal fiber networks from expanding beyond their electric territories. The FCC decision repealing that favor to the big cable and telephone company lobbyists is currently being appealed. But Tennessee also prohibits electrical co-ops from providing telephone or cable TV service, which makes the business model very difficult in rural areas.

Nonetheless, MUS and AEC have studied how they can team up to use the assets of both to deliver needed services to those outside Morristown. We discuss their plan, survey results, the benefits of working together, and much more.

We want your feedback and suggestions for the show-please e-mail us or leave a comment below.

This show is 24 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed.

You can download this mp3 file directly from here. Listen to other episodes here or view all episodes in our index.

Thanks to Forget the Whale for the music, licensed using Creative Commons. The song is "I Know Where You've Been."

OK, Just What Does Open Access Mean Anymore?

In our experience, just about every community considering building a community network considers open access. They want to enable new choices for services and often would prefer the local government avoid directly competing with existing service providers, for a variety of reasons. However, we are only tracking 30 open access networks on our just-released Open Access resource page.

Many of the communities that start off enthusiastic about open access ultimately decide to have a single service provider (themselves or a contractor) to have more certainty over the revenues needed to pay operating expenses and debt. We believe this will change as the technology matures and more communities embrace software-defined networks (SDN) -- but before tackling that topic, we think it is important to discuss the meaning of open access.

On a regular basis, I get an email from one deep-thinking person or another that says, "That network isn't really open access." They almost always make good points. The problem is that different people embrace open access for different reasons - they often have different expectations of outcomes. Understanding that is key to evaluating open access.

How Many ISPs?

One of the key questions centers on how many providers a household is likely to be able to choose from. Various factors, including the network architecture and economics of becoming a service provider, will influence this outcome.

Some communities simply seek to avoid a monopoly network - they are focused on the idea of potential competition. For instance, we believe Huntsville's model and agreement with Google can be considered open access because any party could lease fiber from the utility to compete with Google. However, we believe the costs of doing so by using that network architecture make robust competition unlikely.

If Google is a strong competitor in Huntsville, they will likely not face significant competition from other ISPs on the utility fiber though AT&T and Comcast will still use their networks to compete. But in the event that Google is not a strong competitor, the door will be open to other ISPs to give people a better choice. It is extremely unlikely that this arrangement would give residents many choices for Internet access, but it is an improvement over the one or two pathetic incumbent options most of us face. Google is left with an incentive to meet user expectations, knowing that it could face competition if people are unsatisfied.

The UTOPIA model has resulted in many more choices for both businesses and residents, but most of those businesses are offering similar services at similar prices. The fact that it does not carry a "marquee" provider like Google or a national cable company on it may make brand awareness (and therefore marketing) more difficult, but it also provides opportunities for excellent local firms like XMission to thrive.

Simultaneous Services

This leads into a second question: can a premise subscribe to multiple service providers simultaneously or do they have to choose one? This may sound like a dumb question at first - why would you want to subscribe to two different ISPs? Aside from perhaps wanting video or phone services from one and Internet access from another, many are hoping to see more innovation on this front. We have written frequently on Ammon, Idaho, because they are doing some of the best work in this regard.

The ability to offer simultaneous services depends greatly on the underlying technology. Not all FTTH networks can give ISPs the tools they need to have confidence in delivering a high quality product reliably to their subscribers. Communities that want to ensure they have this capacity should pick a consultant that deeply understands these issues and has worked previously on open access.

money1.png

The Holy Grail among those who prioritize this flavor of open access is to make it very easy for network subscribers to manage their own subscriptions - changing providers on the fly (and again, see Ammon for a model). This approach would allow ISPs to specialize and greatly encourage innovation, particularly for niche services. You might subscribe to an ISP that specializes in great connections for video games while also having a part of your connection dedicated to a home alarm system and still be able to initiate a high quality teleconference for health care that wasn't transported on the public Internet.

Market Entry Costs and Consequences

A key question about open access comes down to market entry costs. How much will it cost an ISP to serve potential subscribers? In Huntsville, the costs of building drops suggests it will still cost hundreds of dollars per sub, which is less than the $1,000+ per sub that it would likely cost to build a network from scratch.

We would generally expect that the lower the cost for an ISP to connect subscribers, the more ISPs would be on the network. However, there is an initially surprising problem that can arise when the cost to offer services is very low, something occasionally called "ruinous competition." This is used to various levels of seriousness but represents a common economic problem: if a product has little differentiation (like an ISP offering only Internet access), then subscribers are likely to decide on the ISP based solely on cost. Over time, ISPs will cut prices until the margin all but disappears, which runs most of the providers out of business (or they consolidate) and the competition effectively disappears.

One of the key points of the “ruinous competition” problem is whether ISPs are effectively providing the same thing (generic Internet access) or services (home security, remote backup, help desk, telemedicine, etc.). To the extent that they are offering different kinds of services, we can avoid that problem. However, it is not clear that most networks today are technically capable of allowing service providers to differentiate their services in any significant way, which is again why Ammon's forward-thinking software-defined networking approach is so important.

Like other aspects of technology, open access will evolve with innovation. For now, open access means different things to different people who are often seeking different outcomes.

Lakeland Considering Its Next Step In Florida

In August 2013, we reported on Lakeland, Florida’s dark fiber network that serves local schools, government facilities, and local businesses. Over the past year or so, community leaders have discussed whether or not to expand the use of Lakeland’s fiber resources.

A 2015 feasibility study suggested several other ways to use Lakeland’s existing 330 miles of fiber infrastructure to enhance connectivity for economic development and residential access. As the city examines its finances and its future in the coming months, city leaders are considering six avenues to meet the community’s needs. The options, some recommended by consultants, vary in type and investment and the City Commission will begin discussing the possibilities as they meet in the upcoming months.

Leaders Consider The Next Move

Lakeland is examining public policies that will encourage better connectivity, such as dig-once, permitting changes, and right-of-way regulations. With smart policies in place, Lakeland can lay the groundwork so they can build off progress made today.

In 2013, Polk Vision, a group of organizations, businesses, government, and individuals, along with the Central Florida Regional Planning Council developed the Polk County Broadband Plan. Another option is using the Plan as a guidepost and aligning Lakeland’s plan to support the goals set in the Polk County Plan. Connecting the schools to a larger network would be part of that plan.

Lakeland, like many other communities wants to give providers operating in the community today the opportunity to work with them to improve services. Another option the city will pursue is reaching out to providers in Lakeland and engaging in discussions to upgrade or expand services to better meet the needs of the community. (We haven't seen much success when communities pursue large incumbents, but smaller local providers are sometimes more willing to work with communities.)

SurfLakeland, the city’s free Wi-Fi service that is available in limited areas downtown, in parks, and at municipal facilities, could be expanded. According to Terry Brigman, Lakeland’s CIO and Director of IT, whatever course city leaders choose, the equipment for the free service is due for an upgrade. SurfLakeland has been available for approximately ten years.

Another possible move will be a pilot project to determine how a larger network might do in Lakeland. Pilot projects are becoming more common as a way to test the waters and can help prove that potential subscribers are willing to switch from traditional providers to a new venture. We’ve reported on a growing number of pilot projects in recent years, including Westfield, Massachusetts; Sun Prairie, Wisconsin; and Owensboro, Kentucky.

The City Commission will also consider releasing a Request for Information (RFI) to seek out a partner to develop a plan to improve connectivity in Lakeland with infrastructure deployment. 

A Hard Look At The Numbers

Community leaders in Lakeland reviewed the study and are discussing several recommendations. The consulting firm also suggested using city fiber resources as a basis for a more extensive network and that the city branch out to launch as an open access provider, or a retail services provider to businesses in select areas. Another option is to offer Fiber-to-the-Home (FTTH) services to every property within the city limits or within the Lakeland Electric service territory. The authors of the study estimated an FTTH in Lakeland would cost from $220 - $270 million if it's built out over the Lakeland Electric service area and would pay for itself in six to seven years.

In March, the City’s Chief Financial Officer gave his opinion about a potential FTTH project. In his opinion, the consultant's recommendation is too risky because “margins of error are too thin” based on the study’s authors' predictions of a 40 percent take rate.

seal-florida.png

The financing, calculated on 20-year bonds, required price increases of 1.5 percent every year.

He went on to say, however, that he did not think the city should abandon the idea of finding a way to bring better connectivity to Lakeland, but that, “I'm simply saying the model we were presented that involved the city purchasing, managing (and) maintaining a broadband system is not feasible."

Support, Adversity Still Alive

Earlier this month, the Ledger reported that Commissioners discussing the issue said that, if the results of the financial analysis and risk assessment still due from the consultants are favorable, they will consider creating a publicly owned and operated Internet utility. Out of seven Commissioners attending the meeting, five expressed support.

A grassroots citizens' initiative, Gigabit Lakeland, has also sprung up in the community and encourages citizens to sign an online petition. They want community leaders to use of the existing publicly owned fiber to bring more choice to Lakeland. Currently, there is a small amount of Verizon FiOS and Bright House Networks cable Internet access (which is now owned by Charter Communications).

While residents have expressed support for taking action, economic development and better business connectivity is on everyone’s mind. In March, the Ledger reported (reprinted at GovTech) on a meeting of the Downtown Lakeland Partnership, a group of business leaders:

Ellen Simms, the co-owner of Two Hens and a Hound, said that for a decade her connection has fizzled out when it rains and she can't get the provider to fix it. 

Kate Lake, who hosted the meeting with [Lakeland CIO Terry] Brigman at her business, My Office & More, said the dedicated fiber optics line she pays for at her shared office for hire "is killing me." 

"I'm paying through the teeth." 

Brigman pointed out at the meeting that the Lakeland-Winter Haven metropolitan area was determined to be the seventh worst served area in the country, according to Polk Vision. "We don't have what we need," he said. "We don't have what we need to compete with our neighbors." 

As expected, the incumbent providers have expressed concern, warned of repercussions, and attended meetings but still chosen not to invest in the infrastructure Lakeland needs. Elected officials in Lakeland appear open minded to discussion but don’t have the patience to be put on an endless waiting list if owning their own network or working with a trusted partner is a possibility. From an October article in the Ledger:

"The demand for data services is growing exponentially and it will grow in our homes and grow in our businesses when we have access to it. That we don't have access to it is the limiting factor," not a lack of demand, [Commissioner Jim Malless] said.

He said the commission owes it to the "incumbent services," Bright House Networks and Verizon, to get their points of view and find out what plans they have for upgrading their services in Lakeland.

"To me, they can provide that service tomorrow. They choose not to, and if it's economics to them, we have to get over the hurdle for the economics for us," Malless said. "I'd really like to hear why you don't provide the service."

 

Our "Open Access Networks" Resources Page Now Available

When communities decide to proceed with publicly owned infrastructure, they often aim for open access models. Open access allows more than one service provider to offer services via the same infrastructure. The desire is to increase competition, which will lower prices, improve services, and encourage innovation.

It seems straight forward, but open access can be more complex than one might expect. In addition to varying models, there are special challenges and financing considerations that communities need to consider.

In order to centralize our information on open access, we’ve created the new Open Access Networks resource page. We’ve gathered together some of our best reference material, including links to previous MuniNetworks.org stories, articles from other resources, relevant Community Broadband Bits podcast episodes, case studies, helpful illustrations, and more.

We cover: 

  • Open Access Arrangements
  • Financing Open Access Networks
  • Challenges for Open Access Networks
  • U.S. Open Access Networks
  • Planned Open Access Networks

Check it out and share the link. Bookmark it!

Muni In Muscatine: Upgrades, Speeds Up, Outperforms

Cedar Falls may be the Iowa city famous for its Fiber-to-the-Home (FTTH) network, but that won’t stop Muscatine. This small city of approximately 29,000 people is about to upgrade its aging network. For a little over a year, the municipal utility, Muscatine Power and Water (MP&W), has planned for the move to FTTH with funding from an interdepartmental loan. Now, FTTH is coming to Muscatine's MachLink Internet access service.

MP&W expects to break ground this year on this $8.7 million FTTH project and to finish building the network in 2017. Fiber will offer speeds much faster than those available on the existing hybrid fiber-coax (HFC) network. In anticipation, MP&W is increasing speeds for subcribers without raising rates.

More than a Year in the Making

The local newspaper, the Muscatine Journal, has closely followed the story. In late November 2014, MP&W announced the planned FTTH upgrade. MP&W is taking a slow and steady approach and planning to complete the upgrade in 2017. The latest Muscatine Journal article from this March emphasized how the large infrastructure project has many "interlocking" pieces that must fit together to make the project successful.

As we reported when MP&W announced the upgrade in 2014, a FTTH network will achieve immediate goals and help achieve a number of benefits. MP&W wants to improve residential services, reduce maintenance costs, and increase network reliability. Upgrading to FTTH will also contribute to long-term goals, such as encouraging economic development. Fiber is a future-proof technology, adapting to the increasing need for bandwidth from households, businesses, and institutions. MachLink will offer speeds of up to a Gigabit (1,000 Megabits) per second.

Outperforming Expectations

In the spirit of community, MP&W is increasing speeds without raising rates. MP&W announced that current customers will get twice the speed for no additional charge. Current MachLink subscribers with the fastest tier receive 100 Megabits per second (Mbps) download which will double, but Gigabit speeds will dwarf even that. Upload speeds have yet to be determined.

It’s a good move as the TV and Internet services in Muscatine are continuing to grow in popularity. The communications division has outperformed already high expectations according to the Muscatine Journal this January:

“A profit of $1.25 million was budgeted for the Communications Utility for 2015, but actual profit was $1.79 million. For December, actual profit of $214,638 outperformed the budgeted $120,136.”

Without this public network, those dollars could have all gone to absentee-owned providers - who wouldn’t be investing money to improve the network. Also, it’s important to note that publicly owned networks do not actually make a “profit” to be distributed among shareholders, but rather extra revenue is reinvested in other community projects, used to improve the network, to pay down debt, or put in a rainy day fund. Publicly owned network "shareholders" are people who live and work in the community served by the network.

The FTTH network will make current services even better. As Beecher Sykes, MP&W manager of telecommunications, told the Muscatine Journal in March,

“(Fiber is) an extreme benefit not only to customers but the community as a whole.” 

Emmett, Idaho Sees Opportunity in New Fiber Network

“Business in the 21st century is driven by broadband.”

Those are the words of Gordon Petrie, the Mayor of the small west central City of Emmett, Idaho that is in the process of constructing its own fiber network. The Mayor and other city leaders have high hopes that the network will create economic opportunities in their city within this sparsely populated part of the country:

“Idaho is one of the least connected states in the union." Petrie said. “We intend to change that by making Emmett one of the most connected communities in Idaho. We’ll have the infrastructure to support high-tech business.”

The Buildout and Beyond

When completed, the new network will encircle the city and connect Emmett’s City Hall, its Public Safety Building, Emmett City Park (which is already providing free Wi-Fi), Public works facilities, the fire department, and the library. The city’s systems administrator said the city is timing construction of the fiber to coincide with other scheduled utility digs. Beyond these immediate plans, the city also has a five year strategy for the network that includes a goal of connecting all of the city’s businesses and its 6,500 residents to the fiber network. 

Emmett’s buildout process is similar to the strategy used in nearby Ammon, another small Idaho city that several years ago began constructing a fiber network starting with its municipal facilities. As with Emmett's proposed plan, Ammon constructed its network incrementally over a period of several years, eventually reaching the city’s business community and just now starting to connect to residents as well. 

Ammon’s example shows that when a city like Emmett takes the initiative to bring locally owned fiber infrastructure to the community, good things are likely to follow. In the coming years, Emmett can expect to see public savings, economic development, and opportunities that may enable them to connect the entire community with fast, affordable, reliable Internet infrastructure.

Highlands, North Carolina, Learns To Fish With Altitude Community Broadband

Highlands is a small community of less than 1,000 residents located in the Nantahala National Forest in the Appalachian Mountains. Along the western tip of the state, Highlands faces the same problem as many other rural communities - poor connectivity. In order to bring high-quality Internet access to residents and businesses, Highlands has implemented a plan to deploy city-owned Internet network infrastructure.

A Connected Escape Up In The Mountains

Highland entertains a large number of summer tourists who flock to its high altitude to escape summer heat and humidity. Summer visitors can fill the city’s six square miles and surrounding area with up to 20,000 people. The city operates a municipal electric utility along with water, sewer, and garbage pick up. 

To round off the list of offered services and bring better connectivity to the community, Highlands created the Altitude Community Broadband. In January, the Town Board authorized to borrow $40,000 from its General Fund and $210,000 from its Electric Enterprise Fund to deploy and launch the new service. The loan will be repaid with revenue from the new service.

The town has long-term plans to offer both Fiber-to-the-Home (FTTH) and fixed wireless service to residents and businesses in the downtown area. Fiber is already available in limited areas within Highlands proper; pricing is available on a case-by-case basis. The landscape is rugged, so residents outside of the city may not be able to transition to FTTH, reported a December HighlandsInfo Newspaper, but the fixed wireless access is still an affordable and workable option in a place considered a poor investment by large providers.

Residential options for Altitude Wireless Internet Access are:

  • Basic (Just give me Internet): 4 Megabit per second (Mbps) [download] ... $34.99
  • Better (Supports some streaming video): 10 Mbps [download] ... $39.99
  • Video Streaming (Comes with free Roku): 25 Mbps [download]... $59.99
  • Extreme (Everyone in my home is connected. Comes with free Roku): 50 Mbps [download]... $119.98

Subscribers can also sign up for the $9.99 per month “carefree in home Wi-Fi”, which is a service in which the utility installs and maintains the customers wireless router, insuring all devices connect and function properly.
wireless-icon.jpg
There is also the option to pay an additional $9.99 per month for additional static IP addresses. Installation is free.

Altitude Community Broadband's website also promises something you NEVER get from Comcast, CenturyLink, or any of the other big boys:

Customer speed is determined at time of installation. Customer will not pay for unattainable speeds.

Recently, the Highlander ran an update from Mayor Patrick Taylor who reported that demand for the Wi-Fi service throughout Highlands was so intense, installations had fallen behind. The Town Board decided to hire two more technicians to tackle the long list of people requesting installation.

Locals Can Fix It, If We Let Them

Highlands’s elected officials reflect the self-reliant attitude of this small town who have decided to solve their problem themselves. In a March article to the Highlands News, Mayor Taylor wrote to report that the Appellate Court was considering the case between the FCC and the cities of Wilson and Chattanooga. Taylor wrote:

Overturning the FCC broadband ruling would be a setback for small towns languishing in the digital desert. It is not just a matter of economic development. Upon further study and discussion with our consultants, I now view it more as as a matter of economic and community survival. Either a community will have unlimited broadband capacity or it will wither and dry upon the economic vine.

Nationally some 200 small-town governments are doing exactly what Highlands is doing. State legislators this past session changed the sales tax distribution formula so poor communities could receive more sales tax revenue for economic growth. I have a suggestion: Don’t create laws that obstruct the development of broadband networks in these underserved communities. It is counterproductive to their economic development. Instead, why not allocate funds to bring broadband to these isolated areas? What’s that proverb about ‘give a man a fish’?

Greenfield, MA, Humming With Hybrid Fiber-Wireless

Residents and businesses in the rural Massachusetts Town of Greenfield are in the process of gaining faster and more affordable Internet service thanks a new municipally-owned hybrid fiber-wireless network. In November, more than 80% of voters passed a ballot referendum to authorize the city to create a nonprofit entity to construct and operate the network.

While scheduled completion is not until spring 2017, some customers will be able to start service during the network’s construction period starting in July. Thanks to the Greenlight pilot program, customers and network operators are already experiencing the new service. Upon completion of an engineering study to iron out the precise plans for the network, the city will start construction of the 80- to 100- mile fiber network. There will be as many as 1,000 wireless access points.

How Does it All Work?

Residents and businesses seeking the fastest available connection to the network will install an antenna on their property. Although prices for the antenna-based service have not yet been determined, the likely base charge for a symmetrical 25 Megabits per second (Mbps) connection will be $29.99 per month. The city expects to offer speeds as fast as 1 Gigabit per second (Gbps). The network will provide Internet, telephone service, and possibly video.

Customers seeking basic Internet access will be able to connect directly to the access points from their personal wireless devices for as little as $9.95 per month. A consultant for the project said that low income residents in the city may be able to get almost free access to this lowest tier plan after reimbursement through Lifeline, an FCC program that provides a subsidy to all low income Internet users.

The town is providing an upfront loan from the general fund of $5 million to pay for the network. Prices for access to the network may decrease as new customers sign up and revenues grow. Eventual profits from the network could also go back into the town’s general fund to spend down the initial loan.

More information about the network is available at the community’s ”Access Greenfield” website

Inside the Border-to-Border Grant Program with Christopher Mitchell and Danna MacKenzie

On Wednesday, November 18, 2015, Christopher Mitchell sat down with Danna MacKenzie, Executive Director of the Office of Broadband Development for the State of Minnesota to talk about the implementation of the Border-to-Border Grant program, and one project, RS Fiber. This interview is being released in conjunction with ILSR's report, Minnesota’s Broadband Grant Program: Getting the Rules Right.

The policy brief covers what the program is, how it works, and why funding must be expanded in order to serve more greater Minnesota communities. In its first two years of implementation, the Minnesota Border-to-Border program distributed $30 million to 31 rural Minnesota communities. But Minnesota's need is much greater and the Legislature should allocate more to the grant program.

Palo Alto, CA, and Pikeville, KY, Release RFIs

Two new Requests for Information (RFI) were recently released in Palo Alto, California, and Pikeville, Kentucky. 

Pikeville, Kentucky

Pikeville is open to both public ownership and Gigabit service via privately owned infrastructure. This community of approximately 7,000 residents wants Fiber-to-the-Premises (FTTP) for businesses, community anchor institutions, municipal facilities, and residents. The regional Appalachian Mountain community, with many jobs lost due to the shrinking coal industry, is turning to connectivity as a way to spur economic development.

Pikeville’s RFI describes how service from existing providers is expensive and "sporadic." This RFI calls for a partner that will help the community develop an open access, affordable, financially sustainable network. In drafting the RFI, Pikeville’s officials made sure to note that low-income residents will not be left behind; bringing this asset to disadvantaged residents is a priority.

The city is the county seat of Pike County and home to a number of colleges as well as several large healthcare facilities. City, county, and federal government facilities are also located in Pikeville and need better connectivity. In 2015, the city obtained a $5 million grant for technology-based training and degree programs for residents in the area. A $1 million grant supplied funding for a Broadband Technology Center in Pikeville. Now the city needs fast, affordable, reliable Internet network infrastructure to complement the Center and to move the local workforce toward more information based industries.

Important Dates:

  • Letter of Intent Due: May 23, 2016
  • Questions Due: May 25, 2016
  • Final RFI Submissions Due: June 3, 2016

The city’s website has more information and details.

Palo Alto, California

Palo Alto is a Silicon Valley city of 67,000 residents; daytime workers coming into the community swell the population to approximately 125,000. Incumbents include Comcast and AT&T who have intimated they might be interested in bringing fiber to the city, but have yet to act. Community leaders are exploring all options with this RFI.

The community has a network of dark fiber serving commercial customers and the public school system. In fact, Palo Alto has experience with providing utility services, as it currently brings municipal electric, gas, water, and wastewater services to the community.

The RFI calls for partners, private or non-profit, to develop a Gigabit per second (Gbps), open access network in the community for every household, business, and institution. Palo Alto is willing to consider either publicly owned or privately owned infrastructure.

As the RFI notes, Google Fiber is still considering Palo Alto as another location for its fiber network. City officials want respondents to consider the implications, should Google Fiber decide to build and operate within the community and to address the possibility in their RFIs.

Important Dates:

  • Letter of Intent Due: May 27, 2016
  • Questions Due: June 3, 2016
  • Final RFI Submissions Due: June 24, 2016

Get more details on the city website.