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New Details on Possible FTTP Network in Holland, MI

In March, we wrote about a prospective municipal fiber network project in the western Michigan city of Holland. Holland’s Board of Public Works (HBPW) began a pilot test in January, offering gigabit speed services to three commercial buildings in the city via a system of dark fiber cable that the city has owned for more than two decades.

Holland’s Board of Public Works (HBPW) has since released a study that details options for a citywide municipally owned Fiber-to-the-Premises (FTTP) network. Although the study is only a first step toward developing a final business plan for the network, it gives significant insight into the city’s plans for the project.

Prospective Network Footprint and Business Model

In the first option, the city could invest $63.2 million to add nearly 500 miles of fiber lines to the city’s existing fiber infrastructure to create a municipal FTTP network for the entire HBPW service area. The new network would reach all of the homes, businesses, and municipal facilities in Holland and in neighboring communities that fall within the HBPW’s service area.

The second option suggests a $29.8 million investment on a fiber network with a smaller FTTP footprint that would provide gigabit speed fiber connections to all premises within the Holland city limits.

According to the study, the city prefers a “hybrid open access” business model in which Holland would provide retail services while also preserving its current open access model. The study also discusses potential FTTP models the city could consider, including one in which the city serves as the network’s sole ISP as well as several different potential public-private partnership (PPP) models that have been successful in other cities.

The study suggests that the city can finance the larger of the proposed network projects with a combination of bonds and loans. The study assumes a 39.6 percent take rate

Faster Speeds, Better Rates

The fastest connectivity customers in Holland can get from the existing city network is not competitive on speed and price with the services offered by local incumbent providers. The established network serves only commercial customers; the pilot project is the city's experiment in residential and small- and mid-sized business connectivity.

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But with a newly expanded FTTP network, the city would dramatically improve options to residents and businesses. Based on their 39.6 percent take rate, consultants proposed subscription rates for 1 Gigabit per second (Gbps) Internet access:

  • Residents: $80 per month
  • Small commercial service: $85 per month
  • Medium commercial services: $220 per month

The study notes an additional, one-time $820 charge to connect each premise to the network.

Opportunity for Local Collaboration?

The city of Holland may also have the opportunity to cooperate on a broader network plan with Laketown Township, a neighboring community that recently proposed creating its own municipal fiber network. Laketown Township, part of which falls within HBPW’s service area, will vote in May on a proposed $8.6 million fiber network.

"When we began developing the fiber broadband business plan, we were unaware that Laketown was also pursuing fiber for the township,” a statement from the HBPW said. “We will gladly work and meet with Laketown officials to coordinate our offerings."

Local Fiber = Local Benefits

Whatever the final decision, Holland City Council Member Brian Burch makes a powerful argument highlighting the economic and quality of life benefits for everyone who lives and works within reach of the future network:

"Like drinking water, access to information is the new public health…. Advances in information and communications technology means that education is no longer confined to the classroom and our children can become more competitive in the global economy. Like strong transportation infrastructure, such as roads, bridges and water channels, public infrastructure allows commerce to grow and for private business to thrive…. The “backbone” of this gigabit network is currently wired, our next step is to bring this capability into homes and small businesses. By doing so, Holland can be at the forefront of the new economy and define our region with more educated residents and an even faster-growing economy."

Dark Fiber Network Brightens Prospects In Valpo, Indiana

Valparaiso, Indiana, is investing in dark fiber to stimulate economic development; it is deploying ValpoNet, a dark fiber network to serve local businesses and institutions.

The city of approximately 32,000 people is a little over an hour southeast of Chicago and home to Valparaiso University, Purdue University North Central, Indiana Vocational Technical College, and several other colleges. The community also has a large manufacturing base and a number of hospitals and medical clinics, so there is an ample supply of entities with IT departments with the requisite knowledge to use a dark fiber network.

If At First You Don't Find Fiber...

In 2010, a regional economic development organization developed a report that identified the lack of fiber in "Valpo" and Porter County but no project developed. The city moved on to other things until 2014. A situation with a large financial information company in town breathed new life into the idea of municipally owned fiber. The company wanted to expand its facility and wanted to be sure it could access better connectivity. Several years earlier, there had been an ice storm at one of the company's home offices and, while they thought they had redundancy from the incumbents, such was not the case. They lost connectivity for days and from that point on, whenever they opened new offices, expanded, or relocated, redundancy was always a top priority. 

Valpo's Redevelopment Commission decided to hire a consultant to draft a feasibility study. He determined that a dark fiber network was not only possible, but needed. The study revealed that other companies suffered from poor reliability and considered affordability another pressing issue. 

The Commission, working with Economic Development Director Patrick Lyp, reached out to entities in Valpo and found that the university and healthcare facilities were also interested in the promise of better reliability via fiber-optic connections. Valparaiso University and two large regional hospitals, including St. Mary's, expressed their desire to participate. Local officials approached large companies directly and, while several indicated that contracts with incumbents must be fulfilled before making a switch, every local business they approached confirmed that they want ValpoNet.

Location, Location, Location

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As it turns out, the geography of Lake Michigan's southern tip pushes a number of transcontinental fiber lines south near Valparaiso; there are also splice points nearby which contribute to the plan. The city will deploy a dark fiber loop down into Valpo that will then circle back up to the big pipe about 10 miles north of the city. There will also be a redundant loop to ensure uninterrupted connectivity. With the exception of a few areas where the fiber requires aerial placement, the network will be entirely underground, which will help protect it from the elements.

Valpo has no plans to offer FTTH service for residents or businesses or to offer any other lit services. Their plan is to entice both large and small ISPs to provide service over the new infrastructure and are actively seeking providers even before construction begins. Like a number of other ex-urban communities near major metro regions, Valpo has one cable provider (Comcast) and one DSL provider (Frontier). There is also a local provider called Nitco that provides DSL, wireless, and some limited fiber services.

Prices in Valparaiso are higher than in the Chicago area and, according to Lyp, tend to drop as one approaches the metro. Community leaders hope this project will encourage competition and lower rates in the area.

City Savings Ahead

The municipal facilities have always been served by the incumbents because the city owns no telecommunications infrastructure. Serving municipal facilities is not part of the dark fiber network phase 1 plan, but Lyp anticipates it will likely be part of a future phase. As they develop the network, planners are considering ways to include fiber accessibility for city buildings and local schools. The network design integrates strategic placement where laterals can easily extend to schools, desirable business development areas, and locations within Valpo ripe for economic development.

Financing With Future Dollars

The cost of the backbone fiber network will be approximately $2.39 million; Valparaiso is funding the network with tax increment financing, or TIF. Other fiber projects have been financed with TIF in recent years, particularly in Indiana. TIF allows public financing based on future gains in property or sales tax that are limited to a certain geographic area that will obtain the redevelopment or infrastructure project. Local government can borrow the funds, build the project, then use the funds generated from the project to pay off the debt.

The method is gaining popularity for fiber-optic projects in Indiana, but it has been used for some time on other public infrastructure projects, such as toll roads, bridges, and transit systems. In some states, it has been used for decades while other states are slow to adopt TIF.

The Cost Of Going Dark

In April, the Redevelopment Commission reached out to local businesses with an informational meeting to answer questions and share anticipated connectivity costs. Each customer will pay a one-time installation fee of $500 for all circuits and drops. Monthly fees will be $1,000 for one pair of dark fiber strands to a business customer unless that customer is an Internet Service Provider (ISP) or some other entity that plans to resell use of the fiber. ISPs or similar entities will pay $1,200 per month for one pair of dark fiber. There will also be a monthly charge of $200 for each drop.

Because the network is dark fiber, businesses will still have to pay monthly fees to an ISP for Internet access. The Commission's executive director, Jim Mooney, encouraged attendees to sign a nonbonding letter of interest to help them prioritize 2016-17 construction.

Mooney told business leaders at the meeting that the Commission had signed a contract with a company in March and that construction will begin in July. The network is scheduled to be completed by the end of 2016.

Out Of The Gate Strong

In addition to strong support from local businesses that want to use the dark fiber network, other members of the community understand the benefits a dark fiber network will bring. In August 2015, the Northwest Indiana Times expressed their support for the municipal project:

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Anyone who says government should leave this solely to the private sector is missing a key point — that the private sector hasn't met this need.

Digital infrastructure is as much a part of economic and civic development as a strong, well-designed transportation network. We shouldn't punish this sort of progressive thinking by hanging on to outdated notions of what the government's role might be.

This is the answer to bridging the tech divide that is separating who will be successful from who will not be.

Managing The Network

Valpo offers municipal sewer and water utility service and while the community feels that their staff can eventually maintain the network, they realize that there is a learning curve. They want to be able to offer businesses connectivity managed by experienced professionals on launch so have issued an RFP to find a firm to manage and operate the network.

After working with an outside firm for the first couple of years, Valpo will determine whether or not to continue with a similar model or develop city talent to take over. Valparaiso has no electric utility like many other communities that invest in fiber networks.

Come To The Dark Side

A growing number of communities are now considering dark fiber investment to stimulate economic development and improve local connectivity. Recently, Huntsville, Alabama, announced it will be deploying a citywide dark fiber network on which Google Fiber will deliver retail services. Other communities have been using their dark fiber resources quietly for years with little fanfare; Burbank, California's dark fiber network is saving money and generating revenue.

Dark fiber networks require lower risk while still inspiring better connectivity in the community. Cities like Valparaiso need fast, affordable, reliable connectivity to be able to compete, especially with Chicago nearby. With ValpoNet in place, the city may be able to lure commerce from the Windy City with reliable connectivity, affordable rents, and a high quality of life.

As Valpo Mayor Jon Costas said in February:

"We're looking forward to being the first city in our region to offer municipal dark fiber, which will make us more competitive in attracting new businesses and jobs."

Be sure to check out Community Broadband Bits podcast #199, in which Chris interviews Patrick Lyp about the new ValpoNet.

Valparaiso Embraces Dark Fiber - Community Broadband Bits Podcast 199

When Valparaiso, Indiana looked into solutions for a business that needed better Internet connectivity than incumbent providers were willing to reasonably provide, it quickly found that many businesses were lacking the access they needed. The market was broken; this wasn't an isolated incident.

Correction: Lisa misspeaks in the intro, saying Valparaiso is northeast of Chicago. It is southeast.

Valparaiso General Counsel & Economic Development Director Patrick Lyp joins us to discuss what Valparaiso is doing to ensure its businesses have the access they need in episode 199 of the Community Broadband Bits podcast.

We discuss the need from local businesses and the dark fiber approach Valparaiso has started to encourage better choices in the ISP market. We also discuss the funding mechanism, which is tax-increment financing - a tool increasingly common in building dark fiber networks in Indiana.

Read the transcript from this show here.

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

This show is 25 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 Kathleen Martin for the music, licensed using Creative Commons. The song is "Player vs. Player."

Virginia Beach Growing Municipal Network For Savings, Development

Virginia Beach has launched a $4.1 million capital improvement project to extend the city’s high-speed Internet network to all municipal buildings. The network will also offer connection spots on the system for colleges, businesses, and neighboring cities, according to the Virginian Pilot.

The city (pop. 448,479) plans to more than double the reach of its municipal network, adding 73 more sites, including more police stations, fire stations, and libraries. Project work is currently underway and is expected to finish in the next year to 18 months. In addition to extending the municipal network, the project will include buying new networking equipment. The city is using money from its capital fund to pay for the project.

Once the project is completed, Virginia Beach will become the first community in the South Hampton Roads region of Virginia with its own Internet network linking all of its government buildings, the Virginian Pilot reported

Growing City Internet Needs

Virginia Beach started its municipal Internet network in 2002 with the local public schools. Since then, the city has invested a total $27 million to install about 225 linear miles of fiber-optic cable, linking all the public schools along with  “connecting many government buildings, including police stations, fire stations, libraries, recreation centers, and Human Services facilities,” according to a city news release.  

Today, Virginia Beach’s burgeoning Internet needs are fueling its municipal network expansion. The network helps maintain traffic lights, facilitates video conferencing, and provides infrastructure for email. A city spokesperson told us that 100 Megabit per second (Mbps) symmetrical service is available to most of the sites on Virginia Beach’s municipal network. 

Network Yields Savings

Once Virginia Beach’s municipal Internet network is fully implemented, the city will save about $500,000 annually in Internet access fees, Matt Arvay, Virginia Beach’s chief information officer, told the Virginian Pilot. For many years, Virginia Beach has paid to lease lines from Cox Communications for buildings not on its network. Without the need to lease those lines, the city can better control and predict their telecommunications costs.

Boosting The City’s Economic Development 

City officials see expanding their municipal network also as a strong enticement to retain and attract economic development, including biomedical companies and other new high-tech businesses.

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That includes establishing “connectivity opportunities for Old Dominion and Norfolk State universities and Tidewater Community College,” Mayor William D. Sessoms Jr. said recently in his 2016 State of the City address.   

The mayor and other city officials also envision their expanded municipal network will provide neighboring cities the opportunity to connect to Virginia Beach’s network for their own municipal broadband. 

In his State of the City address, Sessoms contended:

 “Virginia Beach is on the verge of becoming the East Coast’s fiber transmission hub, facilitating ultra-high-speed broadband communications across the ocean. Picture this….  Lines of fiber running beneath the Atlantic Ocean — from Europe and Brazil to Dam Neck Road, and on to fiber transmission facilities at the Corporate Landing Business Park….With the expansion of broadband, we are on the cusp of incredible economic growth leading to innovations and breakthroughs in medicine, business and technology.”  

Besides addressing its growing municipal needs, the city of Virginia Beach anticipates having enough fiber available to lease fiber to private businesses. If that occurs, one potential beneficiary could be the developers of a proposed biomedical park on 155 acres in Princess Anne Commons, according to Warren Harris, the city’s director of Economic Development,in the Virginian Pilot news story.

In April, the Virginia Beach City Council approved transferring that 155 acre parcel in Princess Anne Commons to the city Development Authority to create a biomedical-related business park. In an earlier news release, the city said, “Expanding ultra-high-speed Internet to the park is a high priority.”

Three Communities Make Big Moves Toward Municipal Fiber Networks

A March article in Broadband Properties Magazine spotlights three communities around the country that are making progress toward creating municipal fiber networks. The City of Centennial, Colorado announced that they have completed a feasibility study and a Master Plan detailing the city’s plans to develop a network. Additionally, the Cities of Indianola, Iowa and Rancho Cucamonga, California announced that they have begun studying the feasibility of starting their own municipal fiber networks. 

Indianola, Iowa

Indianola, Iowa is a city of about 15,000 just 20 miles south of Des Moines. As we wrote a few years ago, Indianola currently owns an open access Fiber-to-the Premise (FTTP) network which provides Gigabit speed Internet access, plus TV, and phone service to most businesses and select residents in Indianola. The study they recently commissioned will explore the feasibility of using this existing network for constructing a FTTP network to the entire community. 

Indianola built its existing fiber network, which they launched in 2012, out of frustration as CenturyLink refused requests from the community to upgrade their DSL network and the incumbent Mediacom began overcharging for their Internet services. Today, Indianola Municipal Utilities is the infrastructure owner and a wholesale provider of this fiber network while Mahaska Communication Group, an Iowa-based Internet Service Provider (ISP), performs the operations and maintenance services for the network. 

Rancho Cucamonga, California

The City of Rancho Cucamonga, California recently asked a private consulting firm to perform a study to determine the feasibility of creating a fiber optic network. City officials see a municipal fiber network in this city of just over 170,000 as a potential driver of economic development. The city is located about 45 miles east of Los Angeles.

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Like Indianola, Rancho Cucamonga owns existing fiber-optic infrastructure. They city owns 25 miles of 96 strand fiber and 5 additional miles of vacant fiber conduit connecting to numerous municipal facilities. The city plans to first create a network for municipal buildings and businesses. Later, Rancho Cucamonga will integrate the network into the city’s traffic system and expand the network to serve residents.

Centennial, Colorado

The City of Centennial, Colorado released the results of a feasibility study and Master Plan in March. The study and plan detail a strategy to expand an existing 48-mile dark fiber infrastructure to create an open access network in this Denver suburb of 100,000.

The Master Plan calls for the city to spend $5.7 million to expand its existing fiber infrastructure and create a municipal fiber network that will provide vastly improved Internet access to all of the schools, libraries, local government and public safety organizations in Centennial. The city is also designing the network to run close to major business and residential areas and will have enough capacity to serve businesses and households. The city would serve as a wholesale provider and lease the network infrastructure on a non-exclusive basis to private ISPs that would provide retail services to subscribers. 

Centennial uses its 48-mile fiber infrastructure to facilitate operations of the city’s traffic signal equipment and to connect its government facilities to privately owned Internet networks. In 2013, Centennial residents voted overwhelmingly in support of a ballot question to reclaim local telecommunications authority that had been hijacked in 2005 when the state legislature passed SB 152. The voters’ 3:1 approval of that referendum opened the door to other possibilities for their publicly owned fiber.

Centennial’s Mayor Pro Tem C.J. Whelan, the chair of Centennial’s Fiber Steering Committee, described city’s vision for the network:

“This plan provides the roadmap for a future fiber-optic network infrastructure that will become a key resource of the city and ultimately enable Centennial to pursue improvements to public services and enhance economic development.”

City Councilwoman Stephanie Piko added.

“The city will now be in a position to partner with anchor agencies, such as school districts and public-safety agencies to offer better alternatives for their technology needs and improve their services to our residents.”

Southern Tier Network Continues Fiber Expansion in Upstate New York

The Southern Tier Network (STN), a community-owned dark fiber network that spans multiple counties in upstate New York, enables fast, affordable, reliable Internet access in New York’s Southern Tier region. Locally based private Internet service provider Empire Access offers services via the network as it continues to expand.

The Corning Leader reports that Empire Access intends to offer residential Internet access over the STN in the Cities of Corning and Elmira sometime in the next year. 

Empire Access

Empire Access, which offers current customers Internet access, voice, and 200-plus Digital TV channels, is waiting to launch services in Corning and Elmira until after they gain approval from the New York Public Service Commission (NYPSC) to provide digital TV services in these communities. Although the company could begin offering fiber and phone services at any time, the company wants to be able to offer the full bundle of options before they officially launch in Coring and Elmira.

As Stop the Cap! wrote in a June 2015 article about the STN, the business strategy at Empire Access is focused on bringing Internet access to areas of the state where Verizon refuses to go and where Time Warner Cable’s service tops out at 50 Megabits per second (Mbps) download and 5 Mbps upload. For current residential customers, Empire Access offers bundled services about $30 per month on average less than competitors.

In addition Corning and Elmira, Empire Service now provides triple play services via the STN Network to the City of Hornell, the Town of Bath, and the Village of Watkins Glen.

Economic Benefits of the STN

As the Corning Leader notes in their article, some businesses in Elmira and Corning are already getting fiber connectivity via Empire Access and the Southern Tier Network. But when we last wrote about the STN in December of 2015, we quoted Elmira-based business owner Mike Mitchell, who had expressed frustration about the lack of fast and affordable Internet services for Elmira businesses:

“It's very, very slow. It's hurting our productivity” Mike Mitchell told the Elmira Star-Gazette last summer. “We hear complaints from our tenants and all the other businesses on this side of the street.”

Thanks to the STN, Mitchell recently told us via email that his building now has a fiber connection and that he expects service to his business in Elmira to be up and running by the end of March.

Montgomery Sees Job Gains in Alabama After Establishing Internet Exchange - Community Broadband Bits Episode 195

In a partnership with the Department of Defense, the city of Montgomery has created Alabama's first Internet Exchange. This week, project manager for Montgomery Cyber Connection, Ben Venable, joins us to discuss this project and the gains the community is already seeing from it.

The effort is a true partnership between General Steven Kwast at Maxwell Air Force Base, the city and county of Montgomery, and others like Wide Open West, the nation's 9th largest cable company. WOW!'s network architect brought not only important technical knowledge, but a major ISP that recognized the benefits of local interconnection.

We discuss how the project began, why it is important, expected (and already achieved) benefits, and how other communities might consider creating their own Internet Exchange. Additional background on the story from WSFA and GovTech.

Read the transcript from this show here.

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

This show is 26 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 Kathleen Martin for the music, licensed using Creative Commons. The song is "Player vs. Player."

AT&T Tries to End the Magic of One Touch Make-Ready

On the border of Kentucky and Indiana a fight is brewing as AT&T and Google Fiber have both announced plans to bring Gigabit Internet service to Louisville, Kentucky. Home to over half a million, the city could see major economic development with new ultra high-speed Internet access, but there’s a problem: the utility poles.

AT&T is suing the city over a “one touch make-ready” ordinance. On February 11, 2016, the Louisville Metro Council passed the ordinance in order to facilitate new competitors, i.e. Google Fiber. 

Utility Poles: Key to Aerial Deployment

Make-ready is the shorthand for making a utility pole ready for new attachments. Although it may seem simple, this process is often expensive and time-consuming. To add a new cable, others may have to be shifted in order to meet safety and industry standards. Under the common procedure, this process can take months as each party has to send out an independent crew to move each section of cabling. 

To those of us unfamiliar with the standards of pole attachment it may seem absurd, but this originally made sense. Utility poles have a limited amount of space, and strict codes regulate the placement of each type of cable on the pole. Competitors feel they have to fiercely guard their space on the pole and cannot trust other providers to respect their cables. Make-ready must involve coordination between multiple providers and the utility pole owners. For some firms, like AT&T, this is an opportunity to delay new competition for months.

“One touch make-ready” simplifies the entire process. A single crew only makes one trip to relocate all the cables as necessary to make the utility pole. Under the amended ordinance in Louisville, the company that wants to add a cable to the utility pole can hire a single accredited and certified crew, approved by the pole owner, which will accomplish the work much more quickly and at lower cost. Also, it must pay for needed fixes or any damages to the pole-owner’s equipment and inform the pole-owner of any changes within 30 days. Such “one touch make-ready” policies quicken network deployments by preventing delays inherent in coordinating many different entities.

Why Oppose It? Private Utility Pole vs. Public Right-of-Way

AT&T is suing to stop Louisville from implementing this new policy in an effort to stop the new competition from entering the market. Ostensibly, AT&T argues they filed the suit because they own many of the utility poles (an estimated 25-40%) in Louisville. The company argues that the municipality does not have the authority to regulate the utility poles and that this is an unjust seizure of property. In other communities where this is the case, the new companies that want to use the utility poles must sign a licensing agreement with AT&T. 

AT&T’s argument, however, fails to recognize that local governments are required to manage the public Rights-of-Way (in layman’s terms, that is the land kept for the public interest near a roadway). The utility poles, although privately owned, serve a key function for connecting the public with needed services. That is why those utility poles are permitted on the public Right-Of-Way in the first place. Local governments, moreover, must have the authority to ensure that anything permitted on the public Right-Of-Way, such as utility poles, meet safety and industry standards in the quickest and most efficient way possible. 

Further Resources on “One Touch Make-Ready”

Chris interviews Ted Smith, Chief Innovation Officer for Louisville in Community Broadband Bits Episode 193. Smith describes how “one touch make-ready” is quicker, safer, and more efficient to use the utility poles in the public Rights-of-Way to their full potential for the good of the community.

For more information on the importance of “one touch make-ready,” check out analyses from the Coalition for Local Internet Choice, Next Century Cities, and FTTH Council. For an in-depth analysis of Right-of-Way regulations, listen to Sean Stokes of Baller, Herbst, Stokes & Lide on Community Broadband Bits Podcast Episode 169.

OECD Study on Munis Digs Deep, Discovers Dividends

A recent large-scale cross-national study from the Organisation for Economic Co-operation and Development (OECD) offers strong evidence that municipal broadband networks provide numerous benefits for communities around the world. Among the study’s major findings include evidence that municipal networks contribute to efforts aimed at improving local economic development, stimulating business productivity and innovation, and enhancing people’s quality of life.

The study's analysis of European nations is of special interest to us as European municipal networks are the only international municipal networks in the study that closely resemble U.S. municipal networks. In particular, the findings from the study’s central econometric analysis of Swedish municipal networks have direct implications for our understanding of the impact of municipal networks in the United States.

Findings from Econometric Analysis of Sweden

As the researchers note, extensive municipal broadband development across Sweden has contributed to a remarkably high level of nationwide fiber penetration, putting the country far ahead of the US in global rankings. The researchers report a series of features and benefits of Sweden’s widespread fiber penetration and aggressive municipal broadband efforts, including:

Increased rates of employment (with even greater employment increases in highly urbanized municipalities), increased business creation, and reduced car usage (also greater in the most urban cities) as fiber networks make it easier to telecommute to work and to shop for goods and services online.

Overall Economic Development Benefits: The authors cite a previous socio-economic analysis of the municipally-owned broadband network in Stockholm, Sweden showing that this network has generated about $2.5 billion (U.S. dollars) in economic returns for the city, or three times the initial investment. This includes $1.2 billion through the creation of new jobs, $800 million in new economic activity for the broadband supplier industry, $300 million saved by the City of Stockholm from lower service costs, and $300 million in increased values of public housing properties, along with additional savings.

Benefits from E-services: 80 percent of municipalities in Sweden are able to provide enhanced e-services including home care, nursing services, social services, library services, civil dialogue, and digital security alarms, enabling significant cost savings for goods and services and improved quality of life for Swedish citizens. In particular, users of home medical care reported that digitally facilitated home care give them an increased sense of independence, security, participation, and freedom of choice in their health needs.

Benefits of improved competition: The prices for Internet service over Swedish municipal networks are 23 percent to 38 percent lower than national prices. Further, prices for service over open access networks are also 25 percent lower compared to those municipal networks that have only one ISP.

Policy: Although the Treaty on European Union generally prohibits state aid out of concern that it could stifle competition and discourage private investment, the Treaty does permit state aid for public private partnerships (PPPs). Notably, the Treaty also makes exceptions on its prohibition of state aid for rural areas lagging behind the European Commission’s Digital Agenda 2020 targets which call for universal European access to 30 Megabits per second (Mbps) broadband speeds and 100 Mbps connectivity for at least 50 percent of the population by 2020.

Early Federal Stimulus: A federal bill in the year 2000 allocated $900 million to stimulate nationwide equality of access to information for Swedish citizens. The authors credit this bill with prompting a proliferation of major broadband initiatives in the ensuing years.

The Swedish Model: To be eligible for state aid, the Swedish government requires community networks to be operator-neutral (open access). Thus, most Swedish community networks are open access and 93 percent of the nation’s municipal networks have at least two ISPs offering service.

PPPs: These Swedish municipal networks are generally structured as PPPs in which a municipality or regional group of cities own a carrier-neutral infrastructure (owned by a neutral party that is NOT one of the ISPs). As the authors report, a general consensus exists among Swedish policy makers and market actors that PPPs, in combination with an open access model, serve to effectively “safeguard a competitive market on services and applications for the benefit of consumers and businesses” (p. 51).

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Additional Findings about International Municipal Networks

The study’s strongest and most consistent finding was that municipal broadband networks around the world inject competition into local telecommunications markets. According to the researchers, these enhanced competitive environments generally lead to lowered Internet service prices, increased investment by the private providers in markets with municipal initiatives, and/or increased opportunities for private ISPs to use shared infrastructure over open access networks.

An analysis of the UK offers conclusive evidence that access to fiber networks in businesses leads to increased worker productivity.

The importance of pre-existing public utilities: Community networks tend to have the most success in communities that had pre-existing public utilities for services such as water, energy, or gas before they developed their community networks.

Successful municipal networks require competent personnel, sound organizational structure: Cases of failed municipal networks tend to share a common characteristic: lack of previous organizational and financial stability in those cities. In other words, in the observed cases of some failed municipal networks, the study’s findings suggest that such failure is typically due to pre-existing deficiencies in the organizational structure and personnel in those communities, not because the networks were inherently problematic.

Citizens are willing to contribute resources/expertise to solve local broadband needs: In addition to the country's 190 municipal networks, Sweden also has around 1000 small village fiber networks that are generally operated as co-ops. The authors observed cases in these villages where the citizenry voluntarily contributed their labor or other resources, including machinery, to assist in the construction of municipal broadband networks. Some of the telecommunications companies in Sweden provide tool kits and other services to help villages collaborate to help solve their own fiber access needs.

The study offers a useful overview of municipal broadband issues in each nation studied, providing a glimpse into a variety of relevant public policies, common strategies, and other major developments in the deployment of municipal networks in the respective countries. We encourage you to check out the entire study.

Additional Notes on the Analysis of Swedish Municipal Networks

Importantly, the researchers chose Sweden for their central econometric analysis largely because its high number of municipal fiber networks offers an especially large sample set for analysis purposes. They were also careful to statistically control for potentially confounding variables in their analyses.  For example, they controlled for variables that could otherwise skew the evidence of benefits from municipal networks such as local tax rates, average yearly income per person, population age distribution, and share of foreigners and immigrants. These measures help to ensure that the observed benefits of municipal networks are actually due to the impact of municipal networks and not a product of any other secondary variables. 

Chattanooga's EPB Sparks Local Entrepreneurial Ecosystem

Chattanooga's EPB Fiber Optics continues to stand out as a model for the municipal broadband movement, demonstrating the extraordinary impact that fast, affordable, reliable Internet access can have on economic development efforts. 

Now, a new research report from the Ewing Marion Kauffman Foundation highlights the network’s vital role in kick starting the development of what has become a thriving “entrepreneurial ecosystem” in this city of about 174,000.

Collaboration, Public Private Partnerships

The report, titled "Little Town, Layered Ecosystem: A Case Study of Chattanooga," credits the EPB network as the “spark” for an explosion of economic development since the network's launch in 2010. As the article notes, the EPB estimates that since the launch, Chattanooga has seen an influx of ninety-one new companies with approximately $50 million in venture capital contributions from six firms. 

According to the report, the network has also encouraged an entrepreneurial climate in this city that had a “long history of collaboration and public-private partnerships” even prior to the network launch. The report cites examples of the city's collaborative spirit in several non-profit entities, city officials, local anchor companies and universities, and the city’s recently opened Innovation District.

Yasuyuki Motoyama, director of Research and Policy at the Kauffman Foundation and one of the paper's authors, explains the lessons that other cities might take away from Chattanooga’s example:

"Chattanooga organized and mobilized its assets to orient itself to entrepreneurial initiatives. This demonstrates what a small-size city can do when factions from different sectors focus on a common goal and collaborate to achieve that goal. This case of Chattanooga provides lessons for other cities to leverage their own unique assets and to create equally successful ecosystems."