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City Council Moves Forward on Muni Project in Ellsworth, Maine

The Ellsworth City Council voted on February 9th to proceed with the first steps to developing yet another municipal fiber network in Maine. Community leaders plan to develop open access fiber infrastructure. Five ISPs have already expressed an interest in working with the city to provide services via the network.

Ellsworth is home to approximately 7,500 people and is located along the south not far from the central coast.

The Ellsworth American reports that council members decided unanimously to lease a parcel of land on which to place a headend facility. The Ellsworth Business Development Corporation (EBDC), which also obtained a $250,000 grant to expand high-speed Internet in Ellsworth, will lease the property. The grant came from the Northern Border Regional Commission in 2014.

The Council also agreed to commit $28,445 in tax increment financing (TIF) funds toward the project. Those funds will be used for the headend building and to install a two mile stretch of fiber to tap into the community's abundant fiber resources. Community leaders want to create options for local businesses and the numerous home based businesses in Ellsworth.

“You have the superhighway already,” said Andy Hamilton, an attorney with Eaton Peabody who serves as legal counsel to EBDC. “But you need the off-ramp and the local roads to take you to the office buildings.”

Indeed, a report from Portland-based Tilson Technology Management said Ellsworth is located at “an information superhighway crossroads” and that it has a lot of fiber optic infrastructure — “more than most Maine communities.”

The network project is being developed in conjunction with a business incubator project in Ellsworth. Biotech and health science related businesses are abundant in the region and city leaders want to make the city attractive to the industry.

Council members are also considering the long term:

Lili Pew, a real estate agent who heads the EBDC broadband committee, pointed out many people have home-based jobs or businesses. She said the number one question she hears from her clients looking at Ellsworth is, “Do I have access to high-speed broadband?”

Running fiber lines to every residence in Ellsworth would be cost-prohibitive — in the range of $8 million to $12 million, according to Tilson — but there are other ways to reach parts of the city that Pew said are “in the black hole of technology right now.”

“This is more important to have in the city than natural gas, right now,” he said, referring to higher-speed Internet. “This is a utility that is really going to help us get ahead.”

An Update on Utah's UTOPIA Open Access Network

For the facts on all things UTOPIA, we turn to Jesse Harris at In his latest post, he provides an excellent bullet list of the key factors in Macquarie's Milestone 2 proposal. An excerpt From his post:

  • The final cost per address is estimated at $22.60 per month. Macquarie estimates that re-working the deal to account for five cities bowing out trimmed the cost by $8.57 per month.
  • The revenue split is much more generous than I expected, allowing the cities to keep 75% of wholesale revenue after the first $2M per year. It’s expected to completely cover the debt service by 2021 with just a 24% take rate for premium services.
  • The basic level service has also been improved. Instead of 3M/3M service being included at no extra cost, it’s been bumped to 5M/5M. This matches Google Fiber speeds on the free tier. The data cap stays put at 20GB per month.
  • Almost all of the network revenues are being driven by Veracity, XMission, and SumoFiber. Other ISPs are very small by comparison.
  • The majority of currently connected users are in opt-out cities. This only reinforced that the votes there were “we got ours” selfishness.

Jesse has also managed to obtain a draft copy of the Milestone Two Report and has it posted for your review at his blog.

Recently, the network settled a long running dispute with the Rural Utility Service (RUS), reported the Standard Examiner. UTOPIA was awarded a $10 million settlement in a lawsuit filed in September 2011.

A November Salt Lake Tribune article reported that the RUS encouraged UTOPIA to seek federal loans in 2004 but took 19 months to approve the first payment, generating unanticipated expenses. Later, the agency withdrew promised funding with no formal reason. 

Maine Legislature All About That Broadband in 2015

Maine continues to be a hot spot in the drive to improve connectivity as the 2015 state legislative session opens. According to the Bangor Daily News, 35 bills have been introduced that deal with broadband issues.

The story also notes that several lawmakers have introduced bills that propose funding from the state. House Republican Norman Higgins advocates broadband infrastructure in rural areas of the state:

“I think most people understand that in this day and age for us to be competitive, that’s one of the necessary tools,” Higgins said, noting he’s found bipartisan support on the issue. “The question, I think becomes: How do we do it? And who does it?”

He proposes allocating millions of dollars to expand the availability of grants to municipalities that want to build and own high-speed fiber-optic networks that would be open to companies that want to serve businesses and homes, similar to the model pursued by Rockport, South Portland, Orono and Old Town.

Momentum is growing outside the Senate and House Chambers as well. In December, Governor LePage asked the ConnectME Authority to consider redefining "underserved" for projects it considers funding. The Authority obliged, reported the Bangor Daily News:

The new standard set Friday includes for the first time speed requirements for uploads, which supporters of the change said would serve small businesses.

The new standard would qualify any areas with broadband connections slower than 10 megabits per second for both downloads and uploads — a 10-10 symmetric standard — as “unserved.”

For those working on the issue of broadband, the energy is contagious:

“It’s exciting as someone who cares about broadband that there’s so much energy around it,” [public advocate with the Maine’s Public Utilities Commission Timothy] Schneider said. “And it ties into this whole trying to figure out how to do economic development not based around Maine’s legacy industries.”

Roanoke Valley Broadband Authority Issues RFP

The Roanoke Valley in Virginia has taken a deliberate pace on the road to improving local connectivity. On December 10th, the Roanoke Valley Broadband Authority (RVBA) released an RFP for proposals for an open access fiber optic network.

The RVBA is seeking a partner to build the network that will remain a publicly owned asset but will be managed by a private partner. According to the RFP, the City of Salem Electric Department has fiber in place that will be integrated into the the network. The RVBA has already invested in design, engineering, and permitting of 42 miles of a fiber network to jumpstart the process. Construction should begin this year.

In November, the Richmond Times-Dispatch reported:

The valley is often described as being caught in a “doughnut hole” for broadband service because it’s not a large enough area for the marketplace to drive creation of a truly high-speed network, but it’s too large to qualify for grants available to more rural locales.

The Times-Dispatch reports the estimated cost for the project is $4 million. 

Missouri Bill Creates New Barriers to Community Networks

Republican State Representative Rocky Miller began the new legislative session with a bill designed to yank authority from local communities that need better connectivity.  Even though the state already preempts local authority to sell telecommunications services and requires a referendum for cable, there is a current exemption for "Internet-type services." HB 437 [PDF] removes that exemption and would make it all but impossible for a local community to ensure they had access to the same types of services now available in Kansas City.

The bill prohibits communities from offering services if there are any private providers with no regard to the type or quality of those services. There can be no mistake that bills such as these are aimed directly at communities contemplating building their own gigabit networks because the existing service providers have refused to invest in the needed infrastructure.

Cities like Columbia, Nixa, and Carl Junction have taken proactive steps to encourage investment economic development growth that this bill would prevent. In Springfield, the city would have more than 1,000 fewer jobs without the city-owned SpringNet, which we have covered multiple times.

The Coalition for Local Internet Choice (CLIC) released this statement about the bill:

The state of Missouri is the latest legislature to attempt to erect barriers to the deployment of broadband networks that are critical to the future of its local economies and the nation, via House Bill 437. High-bandwidth communications networks are the electricity of the 21st century and no community should be stymied or hampered in its efforts to deploy new future-proof communications infrastructure for its citizens – either by itself or with willing private partners. It is ironic that while the International CES show in Las Vegas spotlighted hundreds of new devices and applications that require big bandwidth, legislation would be introduced in Missouri that would impair the development of networks that enable that bandwidth.

The hundreds of communities, companies, and private citizens that make up the Coalition for Local Internet Choice (CLIC) urge the Missouri legislature to reject this ill-informed effort to tie the hands of Missouri’s own communities.

Over the past year, the community of Columbia contended with incumbent CenturyLink's efforts to block its attempt to improve connectivity for local businesses. Consultants recently found that 84% of local businesses do not get the Internet speeds they need. While Columbia Water & Light now offers dark fiber, the consultants suggested developing an open access fiber network for commercial customers.

Miller's district includes Jefferson City, one of the communities where CenturyLink announced it would offer limited gigabit services.

HB 437 is not scheduled for a hearing yet, but we are watching and will post relevent updates.

Update: Missouri removed the referendum requirement for municipal cable in 2010. It is unclear but cities do not appear to have the authority to offer cable services in any circumstance presently.

Open Access Network Proposal Goes Before Bozeman City Commission

At a December 15 Bozeman City Commission meeting, broadband advocates, local incumbents, and city staff all had their say on the idea of an open access network. The hearing was part of a process that began last year, when the idea of a public network was first brought up. Bozeman issued an RFP last spring for help in planning their next steps, and eventually selecting a consultant to shepherd the process from a feasibility study and public input through to final planning. We wrote in more detail about the start of this planning phase back in August.

At the December meeting, Bozeman Economic Development Director Brit Fontenot asserted that "The existing model of Internet service provision is outdated," and laid down for the Commissioners the broad outlines of plan for a public-private partnership to create an open access network involving anchor businesses, the city, the local school district, and Bozeman Deaconess Hospital. A memo submitted by Mr. Fontenot in advance of the meeting, as well as a series of other documents relating to the planning process including a consultant summary report, are available on the city’s website [PDF]. 

Several local citizens spoke on the proposal at the Commission meeting in addition to Mr Fontenot. According to the consultant, a survey of city businesses found that nearly two-thirds were dissatisfied with their current Internet service. This claim was supported by local business owner Ken Fightler of Lattice Materials, who according to the Bozeman Daily Chronicle

said that [his] company employs 50 people in Bozeman but struggles with "really abysmal Internet." They've talked to every major provider in town trying to find a better option, he said, but have found everything available involves either mediocre speeds or unaffordable pricing. 

Perhaps the most interesting comments came from a representative of one of the local incumbents:

Jason Weathers, with Charter Communication, one of the city's major Internet providers, told the commission that he agreed with much of what was being said.

The company has 130 miles of fiber cable in operation already, he said, but installing the final section to connect the existing network to homes or businesses tends to be expensive, driving up the price

The open-access network proposal "has a lot of things that benefit us as a provider," Weathers said.

By providing neutral last mile infrastructure for multiple independent ISPs to use, publicly-owned networks can lower barriers to entry and facilitate competition, driving down prices and improving service. There is nothing revolutionary in this idea, but it is unusual to hear an incumbent admit that it has merit. More often, incumbents who have already paid off their inferior copper or coaxial cable networks are reluctant to open themselves up to competition on a level playing field. 

The meeting concluded with the Bozeman City Commissioners directing Fontenot’s Economic Development Office to come back in February with a draft of an amendment to the city’s “Growth Policy” that incorporates elements of the Bozeman Master Fiber Plan - in effect, to draft a way to put the plan into legal action. With neighboring cities like Butte, Missoula, and Livingston in various phases of consideration or construction of their own networks, Bozeman is feeling the pressure to move forward and stay economically competitive.

Ting to Offer Fiber Internet Service in Charlottesville

Comcast may be an ISP Goliath, but a new David will soon move to Charlottesville. Tucows Inc., recently announced that it plans to begin serving as an ISP in the area and will eventually expand to other markets.

In a Motherboard article, CEO Elliot Noss said:

"At the simplest level, we'll be offering a lot more product for the same price, and a much better customer experience. We want to become like a mini Google fiber."

The company began in the 1990s and is known for registering and selling premium domain names and hosting corporate emails accounts. Two years ago they ventured into wireless cell service and were immediately praised for their top notch customer service and no-frills billing. Tucows promises to fill the customer service gap left by incumbent Comcast, one of the most hated companies in America.

Tucows will operate its Internet service under its cellular brand, Ting. It will take over existing fiber infrastructure owned by Blue Ridge InternetWorks and will begin serving customers as early as the first quarter of 2015. Ting hopes to be able to charge less than $100 per month for gigabit fiber service. Comcast charges $90 per month for 50 Mbps and CenturyLink charges $40 per month for 10 Mbps in Charlottesville.

As far as "fast lanes" go? From the Motherboard article:

Noss said that the company is dedicated to net neutrality as a "sensible business practice" and said "it's our responsibility to make sure content like Netflix is fast on our network. We're not looking for content providers to pay us in a double-sided fashion."

Ting reaffirms that philosophy on the Ting Blog:

Tucows believes very strongly in the open Internet. Up until now, there wasn’t a whole lot we could do but educate, agitate and contribute. Getting into fixed access, owning our own pipe, is an opportunity for us to practice what we preach when it comes to the open Internet and net neutrality.

Noss told Motherboard the company is looking beyond Charlottesville and taking input from an interested public at their website. They will first look at partnering, buying infrastructure, and leasing fiber from local governments. From the article:

"The one thing we won't do is spend a lot of time convincing people of the need for a fiber network,” he said. “We think that's a waste of time, and I think people already see the value.”

Community Broadband Media Roundup - December 19

This was a big year for local governments and many year-end discussions have noted the role of cities in expanding high quality Internet access. Among them, The Free Press' Timothy Karr:

The rise of homegrown Internet infrastructure has prompted industry lobbyists to introduce state-level legislation to smother such efforts. There are at least 20 such statutes on the books. But in June, the FCC stepped in with a plan to preempt these state laws, giving communities the support they need to affordably connect more people.

and Broadband Breakfast's Drew Clark:

...viewed from the vantage point of the future, the far more significant development will be the emergence of opportunities outside of Washington for high-capacity broadband networks. It’s a world in which cities and municipalities are playing the leadership role...

The most direct crystallization of our municipal broadband moment is the new non-profit coalition dubbed Next Century Cities. Launched less than two months ago in Santa Monica, it now boasts membership from 50 cities, representing 25 states. From Los Angeles to communities along the Pacific Northwest, from Lafayette in Cajun country to Chattanooga, and from patrician Boston to a city that got its start as a cow town, Kansas City, each of these 50 cities have different motivations and approaches to Gigabit Networks.

Almost 60% of the United States has access to 100 Mbps Internet connections, but only 3% can get a gig. Ars Technica's Jon Brodkin and Anne L. Kim from Roll Call both take a look at a new report from the Department of Commerce this week. 

The ESA report titled, “Competition Among U.S. Broadband Service Providers,” finds that far more competition exists at slower speeds than at higher speeds (only 8% can choose from at least two 100 Mbps providers.) 

"This report gives policymakers a deeper understanding of what is occurring in the ISP marketplace," says U.S. Commerce Department Chief Economist Sue Helper. “We know that competition typically drives down prices. And we also know that increasingly, higher Internet speeds are required for optimal functionality of popular, high-bandwidth computing applications. As more and more commerce and information move online, we risk further widening the digital divide if access to affordable, higher speed Internet doesn’t keep pace.”  

Anders Bylund with Motley Fool posted an article this week about why AT&T might nervous about the days to come. Bylund asks whether municipal broadband projects like those in Chanute, Kansas, and Google Fiber’s entry into the market are rendering AT&T obsolete. 

“You might think that AT&T would shrug its shoulders over new competition in such a laughably small market. But the company sees this as the beginnings of a much larger threat: Allow one high-sped service at incredibly low prices, and other cities will surely follow. Soon enough, this tiny insurgent will have turned into a nationwide trend, putting enormous pressure on AT&T's existing business model.”

Small towns, larger cities, counties and cooperatives all over the United States are catching on. 

In Renville, Nicollet and Sibley Counties in rural Minnesota, residents have a lot to look forward to in 2015. Cassandra Sepeda with KEYC Mankato reported on RS Fiber’s growing momentum. The fiber-to-the-home initiative could reach more than 6,000 residents by 2016. The groups financial planner, and local business man, Phil Keithahn works from home and is definitely on-board:

"...That's what this does. It levels the playing field for people who live and work in rural America with people who are in the twin cities. So it's an economic development tool for south central Minnesota."

In Virginia’s rural Bedford County— a cooperative partnership could soon connect thousands of homes. Last week the county’s board announced they would collaborate with Mid-Atlantic Broadband Cooperative to get high speed Internet in the area.

“[Internet infrastructure] is a public utility build-out — the biggest one so far in this century — and it’s pretty much equal to the rural electrification that happened at the turn of the last century,” said Allen Boaz, who presented the advisory proposal to the supervisors.

“That’s how important I believe it is, and a whole lot of other people are with me.”

The county’s economic development director says that residents might be connected within six months.

And, speaking of development, 10 Connecticut communities are rolling forward with high speed Internet goals in mind. According to Brian Fung with the Washington Post, half of the state's population could some day be wired for high-speed, fiber-optic Internet. Stephen Singer with the Associated Press writes that while the cities have committed to wanting businesses to build and finance Internet service, they don't want to get into the business themselves: 

Among the goals are to create a gigabit-capable network for targeted businesses and residential areas with a "demonstrated demand" to drive job creation and stimulate economic growth. The call [out to a business or partner] also seeks to provide free or heavily discounted Internet service of between 10 and 100 megabits to underserved and disadvantaged residential areas and deliver gigabit Internet service at prices comparable to other gigabit fiber networks in the United States.

Students in South Bend, Indiana are now fiber-connected. Metronet's grant program helped pay for the high-performing school to connect to Metronet's dark fiber network. Before the upgrade, students often had to do their Internet research from their own homes. 

McHenry County’s Northwest Herald, and Charleston, South Carolina’s The Post and Courier, put their support behind competitive Internet this week. In Charleston, the paper threw down on South Carolina’s 2012 law that prohibits public networks, saying that the state cannot afford to continue to be left behind in terms of speed and connectivity: 

“South Carolina communities with limited or inadequate bandwidth access stand virtually no chance of attracting industries that increasingly rely on high speed Internet connections to do business. Gov. Nikki Haley's record on job creation is strong, but her decision to sign the 2012 bill dealt a serious blow to the state's ability to attract investments.

Perhaps regulating the Internet under a labyrinthine federal communications code would indeed slow innovation and hurt the economy. But preventing competition - the inevitable effect of South Carolina's law - can be equally harmful.

Companies like Comcast, Time Warner and AT&T operate like monopolies in too many markets, and monopolies require rules to prevent actions that harm consumers and other businesses.”

The Star Tribune and MSP Business Journal are reporting that Chaska’s city-owned Internet service will be switched off next year. The city opted out of the wireless Internet offerings rather than pay the $3 million to upgrade. Since it launched in 2004, the city has seen a rise in competition, with more providers offering service. 

“We never wanted to compete with the private sector,” Podhrasky said. “We just wanted to make sure our residents had access to [wireless Internet] until there were more options out there.” He said the city concluded the time has come, with people now having a variety of choices, including bundled services at high speeds through cable modems at prices close to’s."

The city will continue to provide its fiber service to the school district and one data center.

And Susan Crawford came out another good piece: “The 3 Big Myths that are holding back America’s Internet.”


Charlottesville, Virginia could soon be home to what one alternative wireless carrier calls, “Google Fiber lite.” Ting announced this week they will build their own 1Gbps fiber-to-the-premises when they purchase Blue Ridge InternetWorks to serve Charlottesville customers— and, as Sean Buckley with Fierce Telecom reports, they don’t plan to stop there. 

"We'll be on the lookout for the next town or city in which we can lay down roots," wrote [Andrew] Moore-Crispin, [senior content manager at Ting.] “Roots made of fiber optic cable and ultimately leading right to the home. If you'd like to see Ting Internet in your town, let us know on the Ting Internet page… We admire what Google is doing with and for gigabit fiber Internet access, but for the Internet giant, access is more of a side project," wrote Moore-Crispin. "Also, Google is a lot of great things but human scale isn't one of them."

Jason Koebler with Motherboard covered the story as well

"When we got into mobile, we just took the same business processing and billing and applied them to mobile, which was suffering from incredibly high pricing and a low level of service," he added. "We thought, where else can we take these things we've gotten good and apply them to?"

Hypocrisy Department

And Time Warner Cable is fighting to keep its Broadband expansion projects private.

"'As outlined in our appeal, disclosure of Time Warner Cable build-out plans, including details like completion dates and the areas and number of potential customers served, would clearly harm our competitive position,' Time Warner Cable spokesman Scott Pryzwansky said Monday."

Time Warner Cable and other private providers regularly demand this information from local government providers. This is a frank admission that local governments operate from a position of disadvantage relative to private sector providers.

Transcript: Open Access and Incumbent Challenges Podcast Episode 128

Thanks to Jeff Hoel for providing the transcript for Episode 128 of the Community Broadband Bits podcast with Eric Lampland of Lookout Point Communications. Listen to this episode here.


Eric Lampland: But the monopoly is created by the physical infrastructure ...


Chris Mitchell: Exactly.


Eric: ... of those particular things, and so, yes, that does need to be replaced.


Lisa Gonzalez: Hello. You are listening to the Community Broadband Bits Podcast, from the Institute for Local Self-Reliance. My name is Lisa Gonzalez.

In episode 80 of the podcast, we introduced you to Eric Lampland, Founder and Principal Consultant at Lookout Point Communications. In that episode, Chris and Eric discussed indirect cost savings from municipal networks. This week, Eric stopped by our Minneapolis office for a discussion about "open access," today and in the future. We find that many of the communities we study that deploy or consider municipal broadband networks see an open access arrangement as the preferred business model. Traditionally, this would mean that the municipality would provide the infrastructure and providers would offer commercial or residential services to customers over the infrastructure. We also find that a large percentage of those communities find it difficult to implement this model. In our conversation, we dig into some common challenges associated with municipal open access networks. We also talk about some possible cures, and we look at how the very definition of the term "open access" is changing.

Every week, we bring you the Community Broadband Bits Podcast advertisement-free. Please consider contributing in any amount to help us in carrying on this service. Just visit and click on the orange "donate" button.


Chris Mitchell: Welcome to another edition of the Community Broadband Bits Podcast. I'm Chris Mitchell. Today, I'm in the office with Lisa Gonzalez.


Lisa: Hey there.


Chris: And we've got Eric Lampland back, the Founder and Principal Consultant for Lookout Point Communications.


Eric: It's good to be here with you, Chris.


Chris: Thank you for coming back in, Eric. We had a great conversation about two weeks ago, and I fouled up the recording. So we're going to attempt to recreate that. And I really appreciate your patience, and coming back in to, once again, discuss "open access" with me.


Eric: We've discussed open access, I think, for about ten years, so doing this a couple of times is not an issue.


Chris: Yes. We've been talking about it a long time. It's been a passion of yours, which is why I wanted to have you in here. And you've worked with a number of communities that have, I think, followed a similar trend that we've seen in the industry, which is that most communities fundamentally would prefer to build the infrastructure but not engage in the service competition with a Comcast or an AT&T or someone like that. Even through most cities would prefer not to engage in that level of competition, we find that most cities ultimately DO end up engaging in that level of competition. I was hoping that you would help us to sort that out a little bit. Why is it that cities that would prefer open access ultimately often find they can't make it work?


Eric: I think the simple reason is that it's very difficult to get legacy providers to operate their services across other people's infrastructures. And so there hasn't been an option not to produce your own retail services.


Chris: So, you and I are in St. Paul. And if St. Paul built a fiber optic network -- in this mythical future where we have a mayor that cares about the future of our community --




Chris: not that I feel personally about this -- what you're identifying as the problem is that the -- Comcast and Centurylink would refuse to use a fiber optic network that was even superior to what they had in the ground. They're the legacy providers that you're identifying.


Eric: Right. Well, the intention, the old business model for service providers is a simple one, and that is that they own the customer by owning the connection to the home or to the business. And when you take that business model, and you take away the connection, that doesn't reflect well on the way they've set their business models.


Chris: So, when you're talking about the legacy providers, you're talking about Comcast and Centurylink. And they just don't have an interest in using an even superior fiber optic network a city may build.


Eric: They have an interest in using a superior fiber optic network, if they built it.


Chris: Right.


Eric: But they don't have an interest in using somebody else's.


Chris: Right. And I think one of the reasons for that is, these are companies that are fundamentally built on a business model that was not one that was existing in a competitive environment. And that, frankly, it would be difficult for them to suddenly change tens of thousands of employees to be operating in a competitive environment.


Eric: I don't want to speak directly to why -- to what the change would be for legacy providers, because I don't think they know it. I think it's rather simply that they're comfortable doing what they do.


Chris: Um hum.


Eric: And they're not comfortable entering into a different monetization approach which they do not understand.


Chris: The result of that is -- regardless of what their reasons are, and I think you're absolutely correct, that they probably don't even know -- I mean, I'm always worried about giving too much agency to massive bureaucratic organizations.


Eric: Right.


Chris: They're -- they don't have cohesive set of interests. They have competing interests that are fighting within their own bureaucracy. So, let's leave that to the side. And let's look at what that means for a city, then. So, a city that wants to build this network, because they know that the legacy operators won't operate on it -- I think that changes the approach that a city can use. You can't just go out and borrow $100 million -- or $300 million if you're a big city -- to build a network if you are not going to have significant buy-in from the legacy operators and you want to use an open access system. Is that right?


Eric: Well, that is correct. There are actually multiple models in which a municipality can pay for a fiber infrastructure today


Chris: OK.


Eric: One of those models -- and the traditional approach -- is to pay for them out of retail services. And within that model, and as a subset of that model, open access has been thought to solve certain other kinds of political problems.


Chris: OK, so we have -- now, this is open access as a solution to a political problem.


Eric: Correct.


Chris: What is that political problem?


Eric: The political problem is that many governments do not feel that they are in a position to compete with the private sector. And that they would like to enable the private sector. It's interesting that in this particular section of the economy, that particular point of view is maintained, whereas in other sectors of the economy, we've passed that view. There was a long time ago when sewer systems were private, when electrical systems were completely, you know, individually competitive.


Chris: Um hum.


Eric: And we can look back on, you know, even roadways that do that type of thing. But the truth is that we as a society have moved forward to a point where cities are very comfortable in providing roads and sewers and water and so forth and so on. But in this sector, they have not yet made that transition.


Chris: Right. And I think it remains to be seen whether we'll live in a future where, 10-15 years down the road, we'll have a monopoly regime, saying -- recognizing that fiber optic networks are a natural monopoly, and that there is no real viable way to have competition when you have private ownership or -- this or that. I, frankly, don't actually think we're going to get there, for broadband and Internet-type services. But I think it's an interesting conversation. But one thing I want to note is that even we've started on how open access is very difficult, we have seen cities that have figured out ways of moving forward with it. We've seen Danville. We've seen Palm Coast. FastRoads. There's all those public utility districts in Washington state. Many of them have built in an incremental-type fashion. The Washington state ones have not found a way, in all cases, of paying down their debt. And many of those have wholesale power sources of revenue. So they have extra money floating around. And they're used to cross-subsidizing for, you know, sewer. So they may not have an issue with building some of this infrastructure.

But in places that absolutely want the network to pay for itself -- where you want only the revenues of the network to pay for the costs of having built the network -- it seems like the most viable model has been this slow, incremental expansion.


Eric: Well, I'm not so sure I agree with that. But -- And I think that there's something that's important that's implied in your comment. And that is, what is the definition of "open access"? In the cases of Danville and various different places that you mentioned, the approach to open access has to either do with the selling of components of the physical infrastructure, such as fiber optics -- dark fiber, we call it -- or the allowance of people to use exclusively some part of the infrastructure. That's a very limited view of open access, in my opinion.


Chris: So, let me just push this out a little bit. You and I were recently in Salt Lake City.


Eric: Yes.


Chris: And this is something that I've heard regularly with criticism with regard to UTOPIA, which is an open access network. But, for the most part, you can only buy vanilla from different people. Right? You don't have 31 flavors. You really have, you know, a whole bunch of different companies that are selling one flavor. And I think that's what you're getting at here. Is, you have a different vision for how open access could work -- and, you think, should work.


Eric: There are multiple aspects of this. I think the large piece, which I won't address right away, is the perspective of open access as we see it in places around the country now is really an orientation to providers. It is how a provider can use that access to obtain customers. But once obtained, those customers belong to that provider. So it's really a -- it's a bit of the same version of what we have today. The other side of that is a customer-oriented open access, in which the customer has the ability to elect the choice of provider, and may, indeed, have multiple providers at the same location. That is not -- we haven't seen that type of open access yet develop.


Chris: But when you say services and providers, what I'm confused about is, you know, in UTOPIA, you have a choice of many different providers.


Eric: Right.


Chris: Now, they're all selling pretty much the same thing. Now, you question is basically, you know, is, how can we set this up so that those service providers actually have differentiated offerings?


Eric: No, what I'm really saying is that, you know, in normal marketplaces that we have -- if you're buying jeans, for example, right? -- you have a lot of people who sell jeans. But they have found ways to differentiate their products -- this jean from that jean -- it might be the design on the back pocket or it might be the fit, however it's so determined. There's no reason in the world that video, for example -- video services, entertainment services -- can't find similar differentiations. And when they find those differentiations, then open access within the video service arena would be something that would probably we welcomed by many people. Today, unfortunately, we still are stuck with the fact that -- in the case that we're making an example of here -- video services -- that video services are thought to have some hundreds of channels, most of which you don't watch, and has a fairly large price, and as long as you have two competitors that are doing exactly the same thing, then you're right, there's no differentiation of service and there's no benefit to the customer or the provider.

So, the notion on services is really kind of twofold when you get into open access. The first is, do we have competitive understandings -- or, do we have differentiated services between providers of a given aspect of service -- such as video, such as voice, such as various kinds of healthcare services and so forth? The second piece of that comes into play in that most people are making conversations about what has traditionally been thought of as communications services. That thing that we call "triple-play" -- voice, video, and data. But in fiber optic networks, we're talking about orders of magnitude in capacity that are greater in fiber than they are in the copper infrastructures of today. And so the types of services that will begin to occur in an open access network are much greater than just voice, video, and data. Certainly, some providers, like Comcast, have actually included things like home security, right? Well, home security is an easy extra service, right?


Chris: Um hum.


Eric: But healthcare is an easy extra service, right? And if you wanted to do something with your fitbit, you know, wrist, and somebody had a service that amalgamated that with your trainer at the local gym, that would be a different service. Right?


Chris: Right. However, what I think -- when I hear you say that, my thought is, well, what you're describing is things that are data.


Eric: Hmm.


Chris: And so, you know, at home right now, I have Comcast. And I could have a home security system riding over my Comcast connection. And I can do some home-healthcare-type stuff over my Comcast data connection. So how would you vision of open access differ from my idea, which is that I have a data connection and I can do a hundred different things over that?


Eric: Well, I think that's kind of interesting that you think of the data connection, OK, as something where you can do hundreds of things over it, but you think of a fiber optic network as where you can only do three things over it. The fact of the matter is, everything we do over networks today is a data connection, whether it's voice, video, or these things that we think of as Internet. Right? If, for example, I had a service that I offered out of my local gym, that was your or my -- preferably me -- physical training activity, and that the service that was offered actually included tracking my physical activity during the course of the day, that brought it back to my trainer at the gym, and so forth and so on. Could I run that as a web-initiated-type service? Well, I could. OK? But when I think, in fact, that I've got a local function here, going through the expense of a web service and a local level may not be the best way to do that service. There may be many alternatives about doing that kind of delivery of service. So, you know, when we think in terms of a web application, we think in terms of a large-scale aggregation of clients; when we think in terms of a local application, we think of a smaller group of clients, with a more focused need. The range of services is much greater than we currently generally think about.


Lisa: So, where do you feel that we are in terms of these differentiated services now? I mean, how close are we to getting that type of thing now?


Eric: It's emerging rapidly. And it will -- you know, one of the things that you have to be careful about -- that I have to be careful about, and I've been in this business for a long, long time -- and a long, long time ago, we didn't foresee many of the web services that we have available today. And today we would only enjoy the wonder of these emerging services when they actually occur.


Lisa: Um hum.


Chris: You didn't foresee the Yo app ...




Eric: I didn't foresee a LOT. But healthcare services, for example, that involve children at schools, your own doctor, the specialist that might service your family or your school, the parents that might get involved, is a very localized healthcare service function that is not a web-type-based orientation. So there are many things that could come forward. Farmers in the field who measure their water in their underground wells to determine what kind of irrigation -- is a local service. It's not something that you do at a national level. Right? Or an international level. So, what the services will specifically be -- and we certainly have good examples of services that are beyond voice, video, and data, OK? -- it's all data. It doesn't make any difference anymore.


Chris: Well, let me ask you this: so, right now, one of the drawbacks of what I've been describing, which is thinking of the fact that -- I get a Comcast connection, and I can use that to watch Netflix. Well, it turns out that the way the network's architected, Comcast makes decisions that impact Netflix's ability to deliver me content. And, similarly, if you and I, who -- we live a mile and a half apart from each other -- wanted to have some sort of direct connection to each other, and we're both on Comcast, well, those packets might take this incredible route all the way down to St. Louis, or something like that.


Eric: Right.


Chris: So, you know, how does that sort of architecture play into the fact that we may want to have a network that's built where we keep more traffic locally, and that sort of thing?


Eric: Any decent network architecture attempts to localize as much common traffic as possible. And that's been true in this business for a long, long time. I think I want to pick on your example a little differently, if I can. OK?


Chris: You never do what I ask you to ...


Eric: I know.




Eric: It's just the way I am. If you're talking about you and I both having a choice of Comcast, and they're limiting a certain amount of traffic of one kind or another, or the performance is not as good, this is exactly what we want to see in open access. We want to see another company, other than Comcast, be available to the user, to -- who doesn't do that type of limitation. And that is product differentiation -- kind of the standard form we expect in competition. If those two are available on an open access network, Comcast and our hypothetical other company, then we leave it to the customer to make a choice of the product he chooses to buy.


Chris: Um hum.


Eric: And thereby, the kinds of behaviors that we see today in legacy providers, it will be their own incentive not to do so -- not to create bad behavior. OK?


Chris: Um hum.


Eric: Because they'll lose customers if they do.


Chris: Right. if they have the choice. Now, I think one of the next questions, though, is, if we have this open access network, but it's been built basically copying a Comcast-style architecture, because someone like me says, you know what, we really need gigabit Internet access, and let's build this network so that we have gigabit Internet access, right? We're going to offer one service: Internet. Right? Which is how, I think, a lot of people think about it.


Eric: Right.


Chris: How do design choices that we make in building that network, regardless of whether it's open access, if we just see it as being a one-service network -- I understand the irony of describing the Internet as a one-service network, but I think you know what I mean: the idea of just having a big pipe of transferring packets -- how will we build a network to make sure that we can accommodate your vision of open access?


Eric: I think there are two things I want to say. The first is, the Internet today is an example of a perfectly open access network. There is customers who choose which sites to go to. They are customers who choose which sites not to go to. And it's totally within the customer's control. Now, when you think of that model and you try and put it into this other form that we've had -- the legacy providers right now -- they are starkly different. But what we're trying to accomplish is, effectively, the type of service selection that we know and we actually have today. Only we want to apply it against all services. And we want new services to be added when they come around, you know, just as quickly as can possibly be done.

Now, some of those services that we were talking about earlier are local. They have local quality. So, they might have something to do with your school and your students, your local university and the students there. Which may, in fact, have both local and national relationships. But the way you architect networks -- OK? Which was really the core of our question. And I avoided it. I apologize. But -- the core of your -- the question is, how do we architect it?


Chris: Right.


Eric: Well, we don't architect it the way we used to architect it, any more than we would think in terms of the speed as being only one factor of an architecture. You know, it's sort of like saying, on my 1972 Volkswagen beetle I put on high-speed performance tires so it can go faster. It doesn't work that way. You know? You need the entirety of the architecture. And one of the things that has come forward recently is an architecture choice called "software-defined networks." Network function virtualization. Now ...


Chris: SDN. NFV.


Eric: Very good. You know. And the way this particular kind of new architecture is constructed, it allows us to add and withdraw services at will, rapidly, quickly, and even uniquely, to a certain set of customers. It also allows for automatic provisioning of services, such that a customer can go to a web page -- perhaps the service provider's web page -- and select multiple different services off of that that are instantaneously provisioned to that person's home. There are many aspects that are coming forward in this particular new architecture. But, you know, we don't design modern-day jets that have buggy whips attached to them.


Chris: Right. Well, let me just throw something out that I think is important. Which is the idea of what a service provider is. A service provider could be the church down the street. Right?


Eric: Yes.


Chris: And so, what would happen is, potentially, a person who, let's say, has broken a leg, and attends this church could sign up and receive the church sermons, and through the magic of this SDN, you would have a local connection that would be provisioned at a very high capacity to deliver this. The payment would be transacted one way or another way. That would be easily, you know, basically be abstracted away from the user. Which is a different way of saying, you wouldn't have to worry about it. You know, all these sorts of things would happen instantaneously, and easily. I mean, that's fundamentally the goal, right?


Eric: It's fundamentally the goal. But in this goal, we're also seeing all manner of other changes. So, I think one of the ways of looking at a service provider is that a service provider's function is really to operate the physical network, and to interface with those kinds of services that are requested on it.


Chris: Wait. I would have said the network -- you mean the network operator. Like a monopoly network operator operates the physical stuff.


Eric: OK.


Chris: And a service provider is any one of -- is what I would have expected.


Eric: Well, today -- today, when you're talking about a service provider, you talk about Comcast, you talk about any number of those legacy providers. And the interesting piece is that we -- when we have -- when we use that language, we are implying both their physical network as well as the services over which -- over what -- that they are in fact selling us.


Chris: Right.


Eric: So there are really kind of two functions going on.


Chris: Right. Well, I mean, in fact, if Comcast, you've actually got them separated now. Comcast does physical stuff. Xfinity delivers services.


Eric: Um hum. Right. And Comcast has other services, like NBC television, that is available on many, many systems besides Comcast's network. So we're seeing changes happen at a number of different levels. We're seeing monetization change, between -- For example, myself. I happen to be in that group of people who have "cut the cord," as they say. OK? And I pay certain services -- Netflix, Amazon Prime, the various Hulus, and so forth and so on -- a subscription-base, that doesn't go to what used to be the legacy provider collection for video entertainment.


Chris: Um hum.


Eric: So, a service provider, meaning a person who operates this physical network, in this case -- I'm using that term -- has an interest and role in the way the monetization structures go forward, and in the actual operation of the network itself. So -- And those two are very closely related. One of the things that might well be the role of an open access service provider is to provide an interface for users to be able to select services that are openly offered across that network. We see a little bit of that today in programming guides on smart TVs and Tivos, on various different video entertainment boxes, where they've all got certain kinds of apps. But, you know, for those of you who have tried it, like I have, you know, you can find that it's even confusing between how they display the apps on a smart TV, on different smart TVs in the same house, on different devices -- BlueRay players, Tivo players, ...


Chris: Right.


Eric: ... and so on, down the line. Wouldn't it be nice to have a service provider that provided an interface that was easy to negotiate and navigate, and allowed you to select these various different -- we'll call them services, OK? And perhaps interact on them multiply on the same display device, right? Could well be one of the reasons you'd want that service provider's services.


Chris: Right. But fundamentally, I think, we can sort of head toward the end of the show with the thought that we can't do any of those things until we get rid of the monopoly on the end user, basically, which, currently, cable companies tend to have.


Eric: But the monopoly is created by the physical infrastructure ...


Chris: Exactly.


Eric: ... of those particular things, and so, yes, that does need to be replaced. Now -- but -- and so, earlier, you mentioned that you don't see this coming together as a public piece. I do. OK? I don't see how we can avoid it. Because the cost of deploying physical infrastructures -- multiple physical infrastructures -- to businesses and to homes is a foolish expense. A singular connection today -- well -- provides it all.


Chris: I'm totally with you on that. But I think anyone who's closely observed our healthcare debates over the last 20 or 30 years may argue, we can do foolish things for a very long time.


Eric: We can. We can. I'm just very glad that the sewer system that connects my house also connects your house and my neighbors' houses, and so on and so forth.


Chris: Right.


Eric: And they really don't care what any of us put down those ...


Chris: Right.


Eric: ... particular pipes.


Chris: I do still toss urine out my window, though, ...


Eric: Oh, you do. Oh, good.


Chris: So, thank you for coming in.




Lisa: For more on "open access," follow the tag at . Learn more about Eric's firm at . Send us your ideas for the show. E-mail us at . Follow us on Twitter. Our handle is @communitynets . Thank you again to Dickey F for the music for the show. His song, "Florida Mama," is licensed using Creative Commons. And thank you for listening.


Chanute Receives State OK to Bond for FTTH Deployment

The Kansas Corporation Commission (KCC) will allow the city of Chanute move forward with its plan to serve residents and local businesses with its municipal network reports the Wichita Eagle. KCC staff had recommended that the community, which has built out a network over the course of decades, receive KCC approval. 

In keeping with an antiquated 1947 state law, K.S.A. 10-123, the city needed KCC approval to issue the revenue bonds. In keeping with the statutory requirements, the KCC found that the expansion is necessary and appropriate for the city, its consumers and investors. The KCC also also determined that the expansion will not duplicate an existing utility service.

In its filing [PDF], Chanute indicated that its network is an essential part of the local economy and the community's future:

Chanute is a rural community, and like all rural communities, access to broadband is fundamental to the well-being of its citizens and even to the survival of the community itself. Chanute does not need to convince the Commission of the importance of having access to a high- speed broadband network. The Commission is well aware of that need. The investments contemplated for Chanute's broadband network are necessary and appropriate to allow Chanute to meet that need in its territory.

As the city points out, incumbents AT&T and Cable One, do not offer anything close to the level of service of the planned gigabit FTTH network. As we cover in our 2012 report on Chanute, AT&T and Cable One seem to have no interest in serving the community beyond minimum expectations. It was the need for better services that inspired the city to build out its infrastructure and offer services to local businesses.

Prior the the KCC ruling, the Wichita Eagle reported that AT&T requested and obtained permission to intervene in the proceeding. AT&T's subsidiary Southwestern Bell Telephone Company (SWBT) petitioned to intervene in November [PDF], stating:

SWBT's interests and those of its customers may be affected by any order or determination of the Commission as may hereafter be adopted in the above- captioned proceeding.

AT&T told the Eagle:

“Any decision made by the KCC could impact AT&T’s business operations in the area, which is why we asked to intervene in the proceeding,” the company said in a written response to questions from The Eagle. “AT&T remains interested in both broadband issues and the work of the KCC.”

Larry Gates, Director of Utilities in Chanute, 
told the Eagle that the city is ready to issue the revenue bonds and begin connecting customers as soon as the KCC approves the request.

In their filing, the city also commented on the the outdated nature of the state law requirement. From the Eagle article:

In the commission case, Chanute is arguing that the 1947 law was actually designed to protect municipalities from defaulting on bonds because of private-sector competition, not to protect private-sector providers from competition with local government.

Since then, lawmakers and regulators have almost entirely deregulated telecommunication services, counting on competition in the marketplace to keep providers from charging too much or providing substandard service.

“This reasoning (behind the 1947 law) reflects an environment where construction of a telecommunications network was considered a natural monopoly, where one company could supply an entire market at less cost than two or more companies,” Chanute’s filing said. “That is no longer the case in the telecommunications marketplace.”

The 1947 law “does really sort of fly in the face of everything that has been said about competition,” [David Springe, chief consumer counsel for the Citizens' Utility Ratepayer Board] said. “It’s either a competitive world and you can stand on your own two feet, or it’s not.”

KCC staff agreed with Chanute. At the time the law was implemented, it was meant to protect the interests of the monopolies that served the rural areas, but the Telecommunications Act of 1996 shifted policy to encouraging competition.

There are other providers in the area, writes staff, but none of them can provide the caliber of services Chanute will offer. Because AT&T and Cable One do not offer services anywhere near the gigabit FTTH planned by Chanute's broadband utility, there would be no duplication of services.

Staff also agrees with the city, when it analyzes the need for the expansion. From the staff report [PDF]:

Upgrading Chanute's facilities would not only benefit the citizens of Chanute but its community anchor institutions and community business partners as well. In addition, by improving and expanding upon the fiber optic network currently in place by Chanute, Chanute is protecting its current investment. Staff therefore believes the expansion plans as contemplated are appropriate for the municipality and its consumers, and for the protection of its investors.

For a look back at Chanute's story, listen to episode #16 of the Community Broadband Bits podcast. Chris interviewed Larry Gates and then City Manager JD Lester.