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GovTech Reports on Broadband Legislation in Five States

Broadband is a topic of interest in several state legislative chambers this session. In a recent Government Technology article, Brian Heaton focused on five states where community broadband is particularly contentious. In some cases, legislators want to expand opportunities while others seek to limit local authority.

We introduced you to the Kansas anti-competition bill in January. The bill was pulled back this year but could be back next year. When the business community learned about the potential effects of SB 304, they expressed their dismay. From the article:

Eleven companies and trade organizations – including Google – signed a letter opposing SB 304 as a “job-killer” that restricts communications services expansion in the U.S.

Minnesota's leaders introduced legislation to expand broadband. Efforts include financial investment earmarked for infrastructure:

Senate File 2056 – referred to as the Border-to-Border Infrastructure Program – would take $100 million from the state's general fund to be applied to broadband projects. A companion bill in the House, HF 2615 was also introduced.

As we reported, there is bipartisan support for the bill in the House, but the Senate and Governor have not prioritized SF 2056.

New Hampshire's legislature wants to open up bonding authority for local communities that need help:

Legislation is making its way through the New Hampshire Legislature that would give local government expanded bonding authority for areas that have limited or no access to high-speed Internet connectivity. Sponsored by Rep. Charles Townsend, D-Canann, HB 286 passed the House earlier this year and is up for a hearing in the Senate Energy & Natural Resources Committee on April 23.

Heaton also reports on the Utah bill that targeted UTOPIA. The bill concerned potential private partners and appears defeated, but broadband advocates remain alert.

The agency [UTOPIA] has 11 member cities, but communities located outside the limits of member cities can pay to have the network built out to them.

HB 60 would prevent that from happening with specific language that targets only municipal fiber networks – potentially including a Google Fiber rollout in Provo, Utah. That means other forms of broadband such as DSL or cable would be exempt.

Tennessee is especially busy this session. Lawmakers introduced a collection of legislation aimed at enabling local communities to develop community networks. All appear stalled in committee or forgotten by leadership. Heaton spoke to Chris Mitchell about action in Tennessee:

Christopher Mitchell, director of the Telecommunications as Commons Initiative of the Institute for Local Self-Reliance and a national expert on community broadband, told Government Technology that he wasn’t surprised that the bills stalled. He explained that for years, broadband advocates have tried to remove some of the barriers to network expansion in the state, but to no avail.

“The ironic result is that the federal government may be subsidizing obsolete DSL because the state will not allow local governments to expand next-generation community fiber networks even when they are not subsidized in any way,” Mitchell said.

“Many of the elected officials still don't [have] enough pressure on them from constituents to stand up to AT&T and Comcast,” he added. “Those two firms have a lot of power in the [Tennessee] Legislature.”

Tennessee Legislature Considers Four Pro-Muni Bills

Even though there are several publicly owned networks in Tennessee, existing state statutes create barriers discouraging investment. This year, there is a movement at the state Capitol that may change the environment.

The Jolt Digest and CivSource recently reported that four bills aimed at expanding municipal networks in Tennessee have strong support in Nashville. These Tennessee bills are a refreshing change from bills that are pushed by the cable and telephone companies to limit investment in next-generation networks.

However, these bills are often killed quickly in committee or subcommittee due to the tremendous lobbying power of the big cable and telephone companies.

According to the Jolt Digest, two bills are location specific. From the article:

S.B. 2005 and H.B. 1974 would expand the municipal electric system’s provision of broadband service in Clarksville, Tennessee’s fifth largest city, while S.B. 2140 and H.B. 2242 would allow Trousdale County  to contract with a rural electric cooperative to provide broadband services.  

As the rules stands, municipal electric utilities that offer broadband cannot expand beyond their electric service territory. Clarksville would like to reach out further to offer services to schools, hospitals, and industrial parks. CDE Lightband now provides a gig product that community anchors need. According to Christy Batts at CDE Lightband, the network recently upgraded residential customers without raising rates. The lowest Internet access speed available to new customers is now 50 Mbps for $44.95 per month.

The Jolt Digest describes the remaining bills as intended to redefine the state's current definition of "telecommunications." The change would allow electric cooperatives to use their existing dark fiber to reach customers that are not served by rural telephone cooperatives. The goal is to encourage economic development, education and health care.

As we so often find, these bills have bipartisan support. Though Republicans at the state and federal level tend to support big cable and telephone company positions more often than Democrats, both Republicans and Democrats at the local level overwhelmingly support the decision being made at a local level rather than state or federal preemption.

PDFs of the full text of the bills are available online:

SB2005, HB1974 - Affecting Clarksville

SB1240, HB2242 - Affecting Trousdale County

SB2428, HB2364 - Addressing the definition of "telecommunications"

SB2562, HB2482 - Facilitates the expansion of municipal utilities’ broadband services for economic development, education, and health care.

LightTUBe Financially Secure in Tennessee

Tullahoma Utilities Board's triple-play FTTH LightTUBe, began serving Tullahoma in 2009. The fiber network utility is paying off its city bond debt on schedule reports the Tullahoma News.

The network's income during the first four months of fiscal year 2014 is a positive $58,939. General Manager Brian Skelton spoke with Chris Mitchell in July 2013 and expressed confidence that that network will continue to operate in the black. The News reported on our podcast interview with Skelton and provided some recent updates:

With an estimated potential customer base of 9,000 in the TUB service area, LightTUBe services 3,201 fiber customers. That number is slightly ahead of goal (3,186) and represents nearly 36 percent market penetration against primary competitor Charter Communications.

Tullahoma deployed its network to encourage economic development. In 2011, we reported on J2 Software Solutions. The company located its headquarters in Tullahoma because LightTUBe offered fast, reliable, affordable service. 

According to the News article, expenditures on Internet service remain consistent while subscriptions grow. The Tullahoma Utilities Board (TUB) only recently approved a $7 rate increase for video service due to an increase in the cost of television content. When content rates rose in the past, TUB chose to absorb the increase but the cost of content continues to increase for all providers. Since 2009, TUB increased Internet service speeds five times without increasing prices. From the article:

”LightTUBe is in a very comfortable position from a financial perspective. Our biggest concern at this point is the unreasonable price increases that we (and others in the video business) are seeing from many of our channel providers,” said Skelton.

That comfortable financial position appears to rest largely on the shoulders of LightTUBe’s Internet service.

While video and telephone services together generate enough income to offset the system’s net maintenance and depreciation costs, Internet services generate enough income to offset its additional customer service, sales, administration and debt costs.

Unlike the private providers it competes against, Tullahoma is limited in where it can offer service. State law prevents it from serving customers outside its electrical territory - something AT&T and Comcast lobbyists have preserved year after year by killing bills that would remove this damaging law. Across Tennessee, local businesses, residents, and anchor institutions are stuck with slower, less reliable connections despite desiring expansion from the nearby utility but they are denied.

Because Tennessee law prohibits municipal utilities from providing their fiber services outside of their electric service territory, LightTUBe cannot offer its 1G Internet to – for example – the Coffee County Joint Industrial Park, which is serviced by Duck River Electrical Membership Cooperative (DREMC). The joint park, located five miles northeast of Tullahoma and outside of TUB’s service area, has cable-based Internet service.

Chattanooga Cements Status as Best Network in the Nation

Chattanooga's EPB Fiber, a municipal FTTH system owned by the city's electric power board, has dramatically lowered its prices for the gigabit connection and increased all Internet speed tiers.

The slowest connection you can get from EPB Fiber is 100 Mbps symmetrical - and it comes at the same price that most cable tiers start at for much slower connections - $58/month. Want a gig? That is now $70/month. Here is the announcement:



Video streaming by Ustream

The Washington Post covered the story, including several quotes from me.

DePriest tells me that EPB's fiber network is "a great profit center." In the four years the service has been active, the utility company has increased its mid-tier speeds three times — from 15 Mbps to 30 Mbps, from 30 Mbps to 50 Mbps and now from 50 Mbps to 100 Mbps. About 2,500 elite users will enjoy 1-gig speeds by the beginning of October.

Phil Dampier has more coverage at StoptheCap.com, including an analysis of AT&T and Comcast competition.

AT&T charges $65 a month for 24/3Mbps service — its fastest — with a 250GB monthly usage cap, currently not enforced. For $5 more, EPB customers get 1,000/1,000Mbps with no usage limits or overlimit fees.

A recent article in the Chattanoogan noted that Chattanooga had surpassed 50,000 subscribers and was on path to surpass Comcast in subscriber base locally.

Mr. DePriest said Comcast had some 122,000 customers on the EPB grid when EPB launched its rival program. He said Comcast is down to around 75,000 and will likely drop to around 60,000 next year.

Morristown Network Creates Cost Savings and Spurs Job Growth

Located in the northeast corner of Tennessee, Morristown Utility Systems (MUS) offers gigabit broadband throughout a region that covers 30,000 residents and businesses. I recently spoke with MUS General Manager and CEO, Jody Wigington, about FiberNET’s progress and he had much to report, starting with over $5 million in cost savings for local businesses, residents, and the local government itself.

Asked about cost savings to Morristown’s city government, Wigington pointed to $840,000 in total savings from a smart meter program - a combination of lower annual power consumption and operational efficiencies. Another $20,000 in annual savings is due to the county not having to pay out-of-town IT contractors to maintain its network because the required expertise can now be found locally thanks to MUS’s dedicated network specialists.

Morristown businesses and residents are also saving, to the tune of $3.4-million annually thanks to FiberNET’s introduction of lower prices in the local broadband market. That’s $3.4-million, every year, which can be spent locally rather than being siphoned out of the community to corporate shareholders.

In terms of revenue, FiberNET generated $8.6-million during the most recent fiscal year and is projected to generate $8.8-million during the current one. FiberNET's solid financials have translated into increases in MUS’s payments in lieu of taxes (PILOT) to the city, which now amount to $350,000 per year, up from $150,000 in 2010. FiberNET’s strong financial performance resulted in MUS becoming cash flow positive just two years after launch, and net income positive after five years. Both of these key milestones were reached significantly quicker than initially projected.

MUS FiberNET’s impact on economic development is also notable. Oddello Industries, a contract furniture manufacturer that relies on FiberNET for its communications, recently announced a $4-million expansion in Morristown, resulting in 228 new jobs. Oddello CEO, Tom Roberts, cited “reliable utilities” among the reasons for investing in Morristown. This growth is part of a larger trend for Oddello, which has grown its Morristown presence from 35 to 415 employees in just the past year. 

Another sign of FiberNET’s impact on economic development is the recent decision by Molecular Pathology Laboratory Network (MPLN), a global leader in personalized laboratory medicine, to locate its primary backup facility in Morristown. As a global provider of diagnostics to hospitals, medical labs and physician groups, MPLN requires ultra-reliable data replication and disaster recovery services, which FiberNET enables.

Chattanooga's EPB Fiber on Community Broadband Bits Podcast Episode #59

Chattanooga's EPB Fiber is the highest profile community network in the U.S. It was the first network in the nation to offer a symmetrical gigabit tier to every last address in the community. On today's Community Broadband Bits podcast, Danna Bailey joins us to discuss the network.

Danna Bailey is EPB's Vice President of Corporate Communications and has long helped behind the scenes to keep our site informed of Chattanooga's progress. We talk about why Chattanooga built the network and the role of the stimulus award for smart grid in expediting the build out long after the project had started.

We also talk about job growth - both large firms and small entreprenurs locating in Chattanooga while citing the community fiber network as a big part of the reason.

The conversation updates the Chattanooga case study we published last year. Chattanooga remains far ahead of its business plan and is doing very well financially. Read all the stories we have published about Chattanooga here.

We want your feedback and suggestions for the show - please e-mail us or leave a comment below. Also, feel free to suggest other guests, topics, or questions you want us to address.

This show is 25 minutes long and can be played below on this page or subscribe via iTunes or via the tool of your choice using this feed. Search for us in iTunes and leave a positive comment!

Listen to previous episodes here. You can can download this Mp3 file directly from here.

Thanks to Break the Bans for the music, licensed using Creative Commons.

TV Everywhere in Tullahoma, Tennessee

Tullahoma's network, LighTUBe, continues to bring new services to residents and business customers, including smart metering and gig service. LighTUBe has increased Internet speeds without raising rates five times since 2008. Now, LighTUBe offers 'TV Everywhere' to subscribers.

The Tullahoma New reports:

TV Everywhere allows customers to watch content on mobile devices such as iPads and smartphones, according to communications specialist Chelsea Adams.

“What’s even better is that there is no additional cost to LightTUBe customers for using this service,” she said.

To sign up for the TV Everywhere option, LightTUBe customers should log into the TV Everywhere website at www.watchtveverywhere.com, register as a user with information provided on their monthly LightTUBe statement, and an activation link will be emailed to them.

Additionally, LightTUBe customers can register up to four user accounts to use with their TV Everywhere accounts, according to Adams.

You can listen to the story behind LighTUBe in Episode #54 of the Community Broadband Bits podcast. Chris interviewed Brian Skelton, General Manager of the Tullahoma Utilities Board, about the network and the benefits it brings to the community.

Tennessee Town Tullahoma Tells us Why They Built a Network - Community Broadband Bits Episode #54

For our 54th episode of the Community Broadband Bits podcast, we are back in Tennessee to interview Brian Skelton, General Manager of the Tullahoma Utilities Board. They built the network in 2008 and have weathered the tough economy, meeting the business plan while greatly benefiting the community.

This is a particularly content-rich interview, covering the importance of non-gimmick pricing, benefits to schools, local programming, and why they decided to become a gigabit community.

They haven't increased prices of the Internet or telephone service even though they have increased speeds five times for subscribers and added new telephone features. Despite facing tough competition and deep discount pricing, Tullahoma has experienced extremely low churn, which itself is a sign of how valued the service is. You can read our historic coverage of Tullahoma here.

We want your feedback and suggestions for the show - please e-mail us or leave a comment below. Also, feel free to suggest other guests, topics, or questions you want us to address.

This show is 30 minutes long and can be played below on this page or subscribe via iTunes or via the tool of your choice using this feed. Search for us in iTunes and leave a positive comment!

Listen to previous episodes here. You can can download this Mp3 file directly from here.

Thanks to Eat at Joe's for the music, licensed using Creative Commons.

Knoxville Downtown Wondering 'Where Is All the Broadband?'

Knoxville Metro Pulse reporter Paige Hunton published a story last month about a common complaint from downtown residents and businesses - "Downtown Knoxville's Internet Access Kinda Sucks. Can It Be Fixed?" The problem worked its way from local talk to twitter and city leaders have met with residents and business owners to publicly discuss options.

This is a perfect example of what happens to a community that refuses to take responsibility for ensuring local businesses and residents have access to the essential infrastructure they need. Knoxville's approach to improving its Internet access is akin to crossing one's fingers and hoping really hard for the best.

Hunton' describes modern day disaster in the downtown area comprised of an inconsistent patchwork of AT&T DSL, Comcast, and a very limited amount of private provider fiber optics. Some areas have no access, others have no choices. While the city tries to encourage downtown commerce with tax credits for developers and a new entrepreneur center critical high-speed connections are missing.

City officials say the downtown area has a limited amount of aging conduit, discouraging private providers and cost prohibitive to expand. Likewise, old buildings with substandard internal wiring discourage investment from private companies.

Hunton tells the story of Ian Blackburn, a former colleague that now works for a downtown employer impacted by the lack of high-speed broadband downtown. After outgrowing its T1, the company went with 6 Mbps through AT&T DSL. AC Entertainment soon outgrew DSL:

"On one occasion in our DSL days, we had to download a video spot from an artist management site, make a few edits, burn it to disc, and get it to FedEx that day. The browser was estimating over an hour remaining for the download, which would miss the FedEx cutoff point. I remotely logged into a server in my living room, started the download, jumped on my bike, pedaled home, burned the file to a DVD, and was back in the office inside of 20 minutes,” he says. “The problem got solved, but that’s a ridiculous way for a company to have to operate. You can’t do business if you can outrun your Internet on a bicycle.”

AC Entertainment Logo

The building that houses AC Entertainment is now served by Windstream via AT&T fiber optic cables, but many other businesses must contend with pokey DSL as the best option. City and business leaders are considering wireless for the short term:

“It’s not a perfect solution. You always want physical wiring wherever you can get it. But if you can’t get it, wireless Internet is a great option,” Blackburn says. “[Knoxville doesn’t] need fiber-to-the-door like Chattanooga has. A WISP [Wireless Internet Service Provider] will do, and it’s something we can do now while we’re looking to the future for more substantial infrastructure improvements.”

Hunton also talked with Eric Ogle, a researcher at the University of Tennessee's Hoawrd J. Baker Jr. Center for Public Policy. Ogle studies Internet access and community development. Ogle did not rave about Knoxville's tepid approach to ensuring broadband downtown:

“Additional broadband options in Knoxville at a lower cost would force Comcast and others to lower their costs to become more competitive. We see it all the time, when an incumbent provider enjoys a local monopoly and they suddenly get new competition, their pricing drops,” Ogle says. “So it would be no surprise if Knoxville started talking seriously about deploying a city-wide network, companies like AT&T and Comcast would increase their efforts here.”

For the time being, though, [Knoxville’s Chief Policy Officer Bill] Lyons and [Knoxville Downtown Coordinator Rick] Emmett do not sound keen on serious city involvement in the private broadband market.

“I don’t think we missed any economic activities,” Emmett says, compared to Chattanooga’s network build-out. “That’s the point of this [strategy] is trying to draw in some business.”

That attitude, Ogle says, could be a major mistake in the future.

“I’m a believer that the best way to undermine investment in the future is to fail to provide the needed infrastructure of today,” he says.

Knoxville officials don't think they missed any economic activities? Perhaps they should visit the WBIR archives for examples of companies that deliberately chose to expand in Chattanooga rather than Knoxville specifically because of Internet access. Knoxville may not want to build its own network due to the dirty tricks commonly employed by carriers like Comcast and AT&T, but they had better come up with some sort of a plan.

Catching Up on Clarksville - Community Broadband Bits Episode #51

Clarksville is the fifth largest city in the state but was among the first networks in nation to offer symmetrical fast connections with a 10 Mbps basic offering when it launched. Christy Batts, Broadband Division Manager of Clarksville Department of Electricity, joins us to share some of the lessons learned and successes from Clarksville, which is now offering a gigabit everywhere in the community.

Clarksville has a significant population attached to a military base, which results in significant churn - meaning frequent connect and disconnect requests. High churn is costly to utilities. But having its own fiber network helps to keep costs lower for other utility services as well as benefiting the community.

However, Clarksville also had some difficulties that led to a large change in management. Though the network has not been subsidized in any way, it is only now on track to be where the utility wants it to be financially.

And finally, Christy Batts offers some thoughts on how to engage a local Chamber of Commerce.

This show is 25 minutes long and can be played below on this page or subscribe via iTunes or via the tool of your choice using this feed. Search for us in iTunes and leave a positive comment!

Listen to previous episodes here. You can can download this Mp3 file directly from here.

Thanks to Eat at Joe's for the music, licensed using Creative Commons.