As of this January, the FCC defines broadband as 25 Mbpsdownstream and 3 Mbps upstream, but in some rural areas in the United States, people are still struggling to access DSL speeds of 768 kbps. In a few extreme cases, individuals who rely on the Internet for their jobs and livelihoods have been denied access completely.
The sad state of affairs for many Americans who subscribe to the major Internet service providers like AT&T and CenturyLink was recently chronicled in an article on Ars Technica that examined AT&T’s stunning combination of poor customer service, insufficient infrastructure, and empty promises to subscribers. It tells the unfortunately common story of the little guy being systematically overlooked by a massive corporation focused solely on short-term profit maximization.
Mark Lewis of Winterville, Georgia, and Matthew Abernathy of Smyrna, Tennessee, are two examples of AT&T subscribers who, upon moving into new homes, found that not only were they unable to access basic DSL speeds, but that they had no Internet access whatsoever. Alternatively citing a lack of DSL ports and insufficient bandwidth, AT&T failed to provide Lewis Internet access over the course of nearly two years. As for Abernathy, the corporation strung him along for 9 months without providing DSL, forcing him and his wife to rely on a much more expensive Verizon cellular network to go online.
For residents of rural communities who rely on the Internet for work, the paucity of broadband options can even be a legitimate reason for individuals to sell their houses and move, which — spoiler alert — is what Lewis eventually did:
With no wireline Internet available, Lewis and his wife have relied on Verizon Wireless service. This has limited Lewis’ ability to work at home. Luckily, they won’t be there much longer — Lewis, his wife, and their kids are putting their house on the market and moving to Massachusetts, where he’s secured a new job at a technology company.
The new job is "the main reason we're moving," he said. "But in the back of my mind this whole time, I'm saying we can't continue to live here."
And while things turned out OK for Lewis and his family, limited broadband access in rural communities remains an obstacle for many. Individuals and communities should continue to demand accountability from their ISPs, who have for too long reneged on their not-so-ambitious broadband promises.
The city of Morristown, Tennessee received more positive economic news recently when Sykes Enterprises, a global company that operates in more than 20 countries, announced plans to open a call center in an abandoned big-box store and connect to the city’s municipal network, FiberNet. Sykes estimates that the call center will employ up to 500 workers over the next three years, the large majority of which will come from the Morristown community.
According to the president of the Morristown Chamber of Commerce, Marshall Ramsey, the existence of FiberNet played a role in attracting the 50,000-plus employee firm to Tennessee:
For Morristown to be able to have a local provider and a secondary provider in AT&T with a gig gives us that redundancy that most companies can’t get elsewhere in the country.
FiberNet is operated by Morristown Utility Systems, the publicly owned electric and water utility. It began offering gigabit Internet speeds in 2012, though it has served local businesses since 2006.
This is the second time in two months WBIR – Morristown’s NBC network – has run a story about FiberNet. In May, the station covered the way in which the municipal fiber network has stimulated economic development by increasing competition between service providers. When FiberNet upgraded its network to provide gigabit speeds, the incumbent telephone company in Morristown, AT&T, responded with some upgrades of its own. Morristown is one of a select few cities to have multiple gigabit-offerings, along with neighboring Chattanooga, Tennessee.
Chris interviewed General Manager and CEO of FiberNet, Jody Wigington, in 2013 to discuss the municipal network’s deployment. You can find the interview here.
When a community invests in a municipal broadband network, it often does so because it hopes to reap economic benefits from the network. Much has been written about the positive relationship between municipal Internet networks and economic development, including a White House report published in January 2015. Municipal networks create jobs by serving existing businesses and attracting new businesses to local communities, increase productivity by allowing individuals to telecommute and work from home, support advanced healthcare and security systems, strengthen local housing markets, and represent long term social investments in the form of better-connected schools and libraries. They also create millions of dollars in savings that can be reinvested into local communities.
When municipalities choose to deploy fiber networks, they introduce Internet services into the community that are not only significantly faster than Digital Subscriber Lines (DSL) and cable, but more reliable. With fiber connections, businesses and individuals are far less likely to experience temporary blackouts that can harm their ability to provide services to customers. And because these networks are locally-owned and operated, business owners do not have to spend hours on the phone with an absentee Internet Service Provider like AT&T in the (albeit unlikely) event of a problem.
Community Broadband Networks and the Institute for Local Self-Reliance have catalogued numerous examples of economic development achievements that have occurred as a result of cities and counties deploying a municipal broadband network. Below, you can find a wide range of articles, studies, blog posts, and other resources that speak to the economic successes enabled by municipal networks, organized by topic:
Athens, Tennessee, has struck a deal with Chattanooga's EPB and the Volunteer Energy Cooperative (VEC) that could facilitate the city's interest in a municipal fiber network. According to the Times Free Press, the Athens Utility Board (AUB) hammered out the final agreement earlier this month.
AUB is leasing fiber from VEC that carries a gigabit signal from EBP to the AUB system.
According to the article, AUB has explored the prospect of developing their own fiber network as early as November 2013 and now offers Internet access to one business in a local business park. AUB General Manager Eric Newberry told the AUB Board that they plan to approach other local businesses to set up additional commercial accounts. They plan a slow buildout and urge local businesses, many of them clamoring for a reliable connection, to be patient as they take next steps.
Athens is part of the Chattanooga-Cleveland-Dalton area in the southeast corner of the state and home to around 13,500 people. In March, the City Council voted unanimously to pass Resolution 2015-11 supporting local authority for telecommunications. [See the PDF of the Minutes p.1]
Thusfar, the investment has cost $58,258.69 for labor, materials, and equipment. The Board had budgeted $100,000 for the project.
For the first time in four years, EPB is asking its board of directors to approve a rate increase for electric power charges, reports the Chattanoogan. According to EPB, revenue from the Fiber Optic division has kept electric power prices in check for the past four years.
Price increases are always a frustration for residents and businesses, but this is actually another example of how the entire community, even those who may not subscribe to EPB's fiber network, have beneifted via reduced energy rates. We wrote about this last in 2012.
According to the article, several years of deadly storms have caused damage that have increased the average cost of cleanup from $2 million per year to $6 million per year. Additionally:
Officials said this rate increase "is driven by a continuing trend over several years of higher-than-normal costs associated with the greater frequency of devastating storms and by large peak energy demand charges that EPB pays to TVA for power generation. These demand charges are not covered by regular power sales during months with extreme fluctuations in temperature, particularly when there are a few days of extreme temperatures and the rest of the month is much milder."
The article also notes that the fiber optic division has made $13.4 million over the past fiscal year. Debt from the investment made to offer telephone services is expected to be paid off this June.
[EPB CEO Harold] DePriest said it was "the best investment we ever made."
In an effort to extend the benefits of its gigabit network to lower income Chattanooga school kids, Mayor Andy Berke announced that the EPB will soon offer the "Netbridge Student Program."
WDEF reports that children will qualify for the program if they are enrolled in Hamilton County schools and are currently enrolled in the free or reduced price lunch program. Comcast's Internet Essentials uses the same eligibility criteria. Households that qualify will be able to sign up for 100 Mbps service for $26.99 per month. Details are still being discussed.
Last year, Hamilton County schools replaced a number of textbooks with iPads in an attempt to take advantage of Chattanooga's fiber asset to improve student performance. The move revealed a grim reality - that many students' access to that incredible gigabit network (or any network) stopped when they walked out of the school. Educators found that children with Internet access at home made significant strides while those without fell behind. From a December 2014 article on Internet and Chattanooga students:
In the downtown area, for example, only 7 percent of potential customers subscribe to high-speed broadband Internet. In economically depressed areas such as Alton Park and East Lake, only 15 percent of residents have high-speed Internet, according to EPB.
We spoke with Danna Bailey, Vice President of Corporate Communications from EPB, to get some details on the plan and she confirmed that the program is still in its infancy; officials at EPB plan to have it ready for students by the fall. She told is that the rate of $26.99 is what EPB must pay to bring 100 Mbps to a customer when it is unbundled. The regular rate is $57.99.
Note that the slowest speed anyone can get on the EPB Fiber network is 100 Mbps symmetrical. Unlike other providers, EPB is not offering a much slower tier to low income households. We haven't been able to verify, but we suspect that EPB is limited by state law on its pricing. State laws that prohibit municipalities from offering services below cost may be uniquely hurting low income households -- yet another reason that states should allow communities to make these decisions locally.
We were curious about how EPB plans to contend with the high incidence of mobility among lower income families, which often complicates their ability to qualify for Internet Essentials from Comcast. EPB acknowledges that this may become an issue, but because they are so entrenched in the community and serve so a large segment of housing, Danna does not believe it will be a difficult problem to overcome.
They are also determined to avoid the enrollment pitfalls of Internet Essentials because, according to Danna, it defeats the purpose when people who need the program cannot enroll. It is also undecided at this point whether or not the program will be extended to other low-income households, such as the elderly or adults without children.
We applaud any community's attempt to provide fast, affordable, reliable Internet access to their less advantaged citizens. The program is new, but we hope that EPB will consider this sort of program for all those that need affordable access, rather than just a small segment. We want to see capable communities address the digital divide with force and conviction.
In a recent report, WBIR Knoxville shined the spotlight on Morristown. The article and video discuss how FiberNET has improved its telecommunications landscape by inspiring competition, offered better connectivity to the region, and how state law prevents other towns from reaping similar benefits. We encourage you to watch both of the videos below.
Morristown's utility head describes how it considers high-speed Internet access to be a necessary utility:
"You had railroads, you had interstates, and this is the new infrastructure cities need to have," said Jody Wigington, CEO of Morristown Utility Systems (MUS). "To us, this really is as essential to economic development as having electricity or water."
Morristown began offering gigabit service via its FTTH network in 2012. It began serving residents and businesses in 2006 because the community was fed up with poor service from incumbents. Since then, FiberNET has stimulated economic development, saved public dollars, and boosted competition from private providers.
Prices for Internet access are considerably lower in Morristown than similar communities. From the article:
Morristown's Internet service is more expensive than Chattanooga, but much faster than the rest of the region at a comparable price. A 100 Mbps synchronous connection is $75 per month. Advertised rates for Comcast in Knoxville show a price of almost $80 per month for a 50 Mbps connection with much slower upload speeds. A 50 Mbps connection in Morristown costs $40 per month. The cable Internet option in Morristown is Charter, with an advertised price of 35 Mbps for $40 a month.
As we have seen time and again, the presence of a municipal network (nay, just the rumor of one!) inspires private providers to improve their services. AT&T offers gigabit service in Morristown and Comcast has announced it plans on offering 2 gigabit service in Chattanooga.
"Without a major disruptor like we've seen in Chattanooga and in Morristown, there's really no reason for these guys [private companies] to go out of their way to make a big spend to make bandwidth faster. It just simply doesn't make good business sense," said [Dan] Thompson, [senior analyst for Claris Networks].
Thompson said he does not believe there should be any concern that municipal Internet would result in a monopoly akin to other utilities.
"If you go to Chattanooga, Comcast advertises like crazy on billboards down there. You don't see that here [in Knoxville] at all. Comcast is still there. AT&T is still there. They're still viable options."
Beyond offering better service to residents, FiberNET also attracts more employers. In 2013, we reported on 228 new jobs in the community, attracted here in part because of FiberNET's reliability. Most recently:
"There is a new call center that is looking at relocating to Morristown. They told us the local provider can get them fiber in the building for around $1,000. The guy from our utility company told him we've already got fiber to your front door and we'll put it in the building for free because you're going to be helping our economy and jobs. Their jaws drop. Businesses really are shocked by what we have here," said [President of the Morristown Chamber of Commerce Marshall] Ramsey. "They looked at Blount County and looked at Knoxville, but the confidence in the networks just isn't there right now."
Even though the FCC struck down state restrictions on municipal networks in Tennessee, local communities are not rushing to deploy their own networks. The state is challenging the federal action, and no local community has announced an expansion due to the uncertainty around the appeal. With this appeal, the state of Tennessee is wasting taxpayer dollars to deliberately slow the deployment of essential infrastructure in rural communities.
As Wigington acknowledges in the story, a municipal fiber network is no small endeavor. Nevertheless, only a local community can know if it has the ability, drive, and need to venture into Internet access as a utility.
Wigington said the decision of whether to compete with private industry should ultimately be made by the cities, not made for them by the legislature or the cable companies.
Senator Janice Bowling and Representative Kevin Brooks have decided to table their legislative efforts to remove state restrictions in Tennessee. While backing for SB 1134 and HB 1303 was growing beyond the walls of the state Capitol, the sponsors decided to shore up stronger legislative support rather than risk derailing the bill entirely.
"We have had a lot of good progress, and we don't want to throw it all away," Brooks said. The votes were not there in the Senate, and he and co-sponsor state Sen. Janice Bowling, R-Tullahoma, have asked to roll the bill to the beginning of the 2016 calendar, giving them more time to garner support from their colleagues.
"We have pressed the pause button to keep it alive," Brooks said.
Energized by the recent FCC decision nullifying state laws restricting Chattanooga from expanding, Bowling, Brooks, and other local leaders thought the time was right to once again try to eliminate state barriers. The FCC decision has already been formerly challenged by Tennessee's Attorney General with the support of the Governor. Rather than depend on federal intervention to establish an environment that will encourage connectivity, SB 1134 and/or its companion HB 1303 would have solved the problem on the home front.
Economic development has been stifled by state barriers preventing municipal network expansions in the state but many constituents are plagued by lack of personal access. Incumbents who have spent millions lobbying to keep these restrictions in place during past legislative sessions, do not serve a number of rural areas. Those areas could benefit from municipal network expansions. From a March 6th Tennessean article:
"My district said we need help. We have some folks with little service, some folks with no service," Brooks said. "This is not about government intrusion; this is a bill about service exclusion."
Even though the legislation will not change state law this session, the FCC decision still stands for now. It may take years for the issue to be finally determined but hopefully the momentum will continue and more Tennessee voters will let their elected officials know they want to strike anti-muni laws from state books.
From an EPB Press Release:
“Thanks to a growing number of Tennesseans, who are contacting their representatives to communicate their critical need for broadband services, we made more progress this legislative session than ever before,” Senator Bowling said. “Next year, I hope the needs of the hundreds of thousands of Tennesseans with little or no broadband service will override the vested interests of the legacy carriers who refuse to serve them while lobbying to prevent community-based providers from meeting the needs of the people in our state.”
We simply find it stunning that a majority of legislators in Nashville believe that their state is better off with slower Internet access. That is exactly what this is about - AT&T and Comcast have purchased another year of not having to worry about competition from the Tennessee General Assembly.
It is duplicitous to suggest that the incumbents represent the “free market” against “government-subsidized” municipal networks. Incumbents are incumbents precisely because they have had the weight and resources of government to back them up for years. Furthermore, they have had backing from those levels of government - the federal and state - which are least pervious to direct participation by local residents. Municipal networks, funded by the public and accountable to the public, represent a balance to the domination of telecommunications infrastructure by huge corporations which have long enjoyed substantial government subsidy. Banning or restricting municipal networks will end this effort to create a level playing field.