The Secrets Behind Partnerships to Improve Internet Access

Publication Date: 
July 14, 2016
Author(s): 
Patrick Lucey
Author(s): 
Christopher Mitchell

placeholderA growing number of U.S. cities have broken up monopoly control of the Internet marketplace locally. They're promoting entrepreneurship while giving residents and businesses real choice in how they connect and reach new audiences. They've put a new wrinkle in an old model: the public-private partnership.

"Communities desperately need better Internet access, but not all local governments are bold enough to 'go it alone'", says Christopher Mitchell with Community Broadband Networks at the Institute for Local Self-Reliance. "Here, we've outlined a few remarkable cities who have demonstrated how smart strategies are helping them help themselves."

A city that builds its own fiber and leases it to a trusted partner can negotiate for activities that benefit the public good, like universal access. It may even require (as Westminster, Maryland did) that the partner ISP have real human beings answer the phone to solve a customer's problems.

The term "public-private partnership" has been muddied in the past. This report clears up the confusion: public entities and private companies must both have "skin in the game" to balance the risks and amplify the rewards.

Inside The Report

  • Partnerships in broadband have never been in greater vogue. Communities are realizing they don’t have to build it entirely themselves to get the benefits of gig networks in Chattanooga or Google cities.
  • The report features the revolutionary Westminster/Ting partnership and notes its first copycat: Cruzio and the city of Santa Cruz. These networks are groundbreaking in terms of offering a "third way" for communities to join the ranks of gigabit cities.
  • This report offers a roadmap for cities and outlines the important questions that need to be asked and answered in order to find the right partner with the right priorities for each community.

WATCH THE VIDEO: Westminster & Ting: The How and the Why

DOWNLOAD THE REPORT

Get Your Applications Ready For Minnesota's $35 Million

The Land of 10,000 Lakes wants to become The Land of 10,000 Lakes With High-Speed Internet Access. 

The Minnesota Department of Employment and Economic Development (DEED) will begin taking applications for the Border-to-Border Broadband Development Grant Program on July 22, 2016. The program offers a total of $35 million in funding for projects in unserved and underserved areas. The application submission period closes on October 3, 2016.

The Grant Program

The Border-to-Border program will pay for up to 50 percent of project development costs, awarding a maximum of $5 million per grant. This round of funding sets aside $5 million specifically for underserved areas, and $500,000 will be set aside for areas that contain a significant proportion of low-income households. Officials estimate this year's $35 million in funding will impact an additional 2,000 Minnesotans.

Since May 2014, the Border-to-Border program has provided over $30 million in assistance to over 30 projects throughout Minnesota. This latest funding opportunity brings the total funding up to $65.4 million. It is the largest funding appropriation for the program to date.

Still Not Enough

The Governor’s Task Force on Broadband estimated that Minnesota needs $900 million to $3.2 billion of investment to bring high-speed Internet access to all in the state. The latest funding for the Border-to-Border program, although more than past years, is still not enough. Minnesota Lieutenant Governor Tina Smith stated:

“Broadband isn’t nice, it’s necessary if we want Minnesota’s economy to work for everyone, everywhere in the state. This new investment will connect businesses to customers, students to learning opportunities, and patients to their doctors. This is an important investment but we have a long way to go...”

Learn more about the Border-to-Border program and our suggestions for how to improve it by downloading our May 2016 policy brief Minnesota's Broadband Grant Program: Getting the Rules Right

To learn more about the program or to apply visit the DEED website here. Applications will be accepted from July 22nd through October 3rd.

Comments Wanted: Proposed HUD Rule To Expand Low-Income Residential Internet Access

As part of a growing interest in expanding fast, affordable, reliable Internet access for low-income families at home, the United States Department of Housing and Urban Development (HUD) has proposed a new regulation requiring high-speed Internet infrastructure to be installed in HUD-funded multi-family rental housing during new construction or substantial rehabilitation. While the proposed rule doesn’t require developers to pay for Internet service subscriptions, it is a step in eliminating barriers that low-income families face in obtaining quality, consistent Internet access. Public comments are due July 18, 2016.

The proposed rule covers HUD’s rental assistance and grant programs, including its Section 8 housing assistance program, Supportive Housing for the Elderly and Disabled program, Community Development Block Grant program, and Choice Neighborhoods Implementation Grant program. Families living in multi-family housing can then choose to purchase full-priced Internet access from local providers or utilize other resources in their community, which include federal subsidy programs in addition to other state, local, and charitable programs.

Getting Wired Up

As for the actual infrastructure, several types of Internet access technologies satisfy the requirement. Developers can install either wireless (Wi-Fi, fixed and mobile wireless, satellite) or wired (digital subscriber lines also known as DSL, power lines or BPL, cable lines, or fiber) infrastructure. HUD expects most builders will elect to install wired access because of the rapidly changing nature of wireless technologies.

Additionally, wired access is more likely to provide meaningful competition between several Internet Service Providers (ISPs), lowering costs and improving service quality for multi-family housing residents. In an open access network, ISPs typically lease space on infrastructure owned by another entity rather than owning the physical infrastructure themselves. If HUD's new rule called for an open access model, multiple ISPs could utilize a building’s wired infrastructure to offer services to residents. According to HUD’s estimates, which are detailed in the proposed rule, the average construction costs for wired broadband access in its multi-family housing is approximately $200 per unit.

Promoting Equity Through Competition

HUD’s proposed rule is one of the federal government’s initial attempts to address the digital divide. Programs such as the Federal Communications Commission’s Lifeline program provide credits to families to purchase Internet services, but the programs are small and help consumers pay bills rather than lower costs by promoting competition.

HUD seeks public input about the proposed rule. While HUD asks for feedback on specific questions in the proposal, ILSR also encourages comments that affirm the importance of the proposed rule and support the installation of wired technologies that create open access networks that offer multiple benefits to subscribers rather than wireless technologies. Comments can be submitted online or by mail and are due July 18, 2016

Community Broadband Media Roundup - July 11

Maryland

Town receives grant and funding for fiber optic cable by Joseph Norris, The Bay Net

Minnesota

Kandiyohi County signs letter of intent with broadband partner by Anne Polta, West Central Tribune

General

Untangling Google Fiber's twist on America's unending digital divide by Lauren Walker, Daily Dot

Whether [the provider] is public or private, if it is owned by the community, there is typically pressure on them to deliver a good product,” Mitchell says. “But when it is owned by someone who has no connection to the community, or can’t even find the community on a map, then the quality of the product tends to decline.”

Dear Landlord: Don't rip me off when it comes to Internet access by Susan Crawford, BackChannel

Analysis: Internet access - An incomplete promise by Frederick L. Pilot, Daily Yonder

Americans are victims of arbitrary redlining by incumbent telephone and cable companies. It’s difficult to make a credible argument that living a third of a mile from existing infrastructure puts a customer in the middle of nowhere, making it too expensive to extend service.

Elizabeth Warren slams Comcast, wants more antitrust enforcement by Karl Bode, DSL Reports

[Video] Small towns join forces to bridge the digital divide by Zachary Green and Ivette Feliciano, PBS Newshour

Community Connections - Jason Hardebeck, Baltimore

Residents and businesses in Baltimore have been dealing with poor access for years. In 2015 the city's mayor, Stephanie Rawlings-Blake named a 27-member task force to address the problem and has spoken out about the need for more investment.

In this episode of Community Connections, Christopher Mitchell caught up with Broadband Coordinator Jason Hardebeck to talk about about his city's challenges and opportunities.

Hardebeck is tasked with developing a strategy that puts his city's residents and businesses first. These challenges are familiar to many cities across the United States and this interview serves as a good illustration of why owning some conduit and dark fiber can be a big benefit to cities as they try to solve the problem of the digital divide. 

 

Fiber in Lenox, Iowa

When community leaders in Lenox, Iowa, gathered together to examine the community's cable TV options in the 1980s, they probably didn't expect their decision to impact local Internet access. Fast-forward 30 years, and this town of 1,400 people now has one of the most sought after forms of Internet access infrastructure: Fiber-to-the-Home (FTTH).

Lenox Municipal Utilities owns and operates a FTTH network that offers symmetrical speeds to hundreds of customers in town. It’s just one of many communities around the nation that have invested in this rugged, future-proof technology.

Same Utility, Changing Technology

We spoke with the Lenox Municipal Utilities General Manager John Borland who graciously provided some of the history of the network.

Since the early 1900s, Lenox has operated its own electric and water systems. These essential services enabled the community to thrive in the southern plains of Iowa. Eventually, a local entrepreneur decided to build and operate a TV system to ensure that the Lenox community stayed connected. In the 1980s, the town purchased the coaxial network from the owner who was ready to sell the system, but wanted to keep ownership within the community. Unfortunately, Borland didn’t know the identity of the entrepreneur whose investment eventually led to top-notch connectivity in this most unexpected place.

By the late 1990s, the network needed replacing, and nationwide, communities had already begun to realize the importance of Internet access. The incumbent Internet service provider, Frontier, offered dial-up and some DSL. Anticipating future need, Lenox decided to rebuild the entire network with fiber. 

Better Connectivity in the Community

In 2005, the community voted on a referendum to enable the utility to provide Internet service; it was one of many towns voting that year to ensure local control. The FTTH build cost about $1.5 million, which they funded through municipal revenue bonds.

Farmers Mutual Telephone Company ran a fiber line to Lenox, ensuring middle mile connectivity. By 2008, Lenox Municipal Utilities had the FTTH system up and running, bringing high-speed Internet to residents and businesses.

Now, Lenox Municipal Utilities offers triple play: television, telephone, and symmetrical Internet service, so upload and download speeds are equally fast. They also provide bundled packages for customers who want to purchase all three services. The network has about 450 customers for their Internet service, and several larger businesses have dedicated lines. 

Lenox is just one of the many small communities that offer next-generation high-speed connectivity in Iowa. For more stories about these self-reliant Iowa communities, check out our past stories in the Iowa tag.

Broadband Communities Regional Conference This Fall In Minneapolis

"Fiber For The New Economy" will be the theme of  Broadband Communities' annual regional conference which is scheduled from Oct. 18th to 20th in Minneapolis.

The conference will explore the hottest developments in fiber and economic development with panel discussions and workshop sessions on such topics as Google Fiber, incumbent and other provider deployments, and public-private projects, according to Jim Baller, the conference’s economic development chairman.

There will also be sessions about developments in “major verticals,” including health care, education and energy, adds Baller, who is also co-founder and president of the Coalition for Local Internet Choice

The conference will focus on broadband activities and projects in primarily Minnesota, Wisconsin, Iowa, North Dakota, South Dakota, Nebraska, and Montana, as well as western Ontario and Manitoba. 

The Blandin Foundation is assisting Broadband Communities with content and conference planning, a move that means the Minnesota non-profit will have a much smaller fall event of its own, said Bernadine Joselyn, Blandin Foundation director of public policy and engagement. Blandin’s fall conference is scheduled for Sept. 13th and 14th in Duluth.  For further information, go to the event website.

Key facts on the Broadband Communities’ Conference

What: “Fiber for The New Economy”

Where: Radisson Blu Downtown Hotel, 35 S. Seventh St., Minneapolis, Minnesota  55402.

When: Oct. 18-20, 2016

Register online for the conference at the event website. Check back in the future with the main event page for more as the agenda is set.

Leverett Releases RFP For ISP: Responses Due August 15th

Leverett, Massachusetts, has operated its Fiber-to-the-Home (FTTH) network since August 2015, working with Crocker Communications to bring Gigabit per second (Gbps) connectivity to residents and businesses in the Massachusetts town. The contract with Crocker is not indefinite, however, and the city has issued a Request for Proposals (RFP) for other Internet Service Providers (ISPs) to offer services on the network. Responses are due August 15, 2016.

According to the RFP, the ISP selected will have an exclusive agreement to provide services to the community as leverettnet.net. The community seeks a three-year contract and will begin on or before July 1, 2017. 

Leverett’s contract with Crocker Communications was also a three-year term, commencing in 2014. Releasing an RFP now will give community leaders eleven months to review submissions from potential providers and negotiate terms. With their own infrastructure, Leverett has the ability to take a discerning approach and explore other options from the RFP release.

RFP SCHEDULE: 

Written Questions Due: July 18, 2016 at 10 a.m. 

Answers to Questions Posted: July 25, 2016

Submission of Proposals Due: August 15, 2016 at 10 a.m.

Finalist Named: August 26th, 2016

Contract Award: September 2nd, 2016

For Block Island, RI, a Better Network Could Be Blowin’ in the Wind

Eight strands of publicly available fiber optic cable made landfall on Block Island, Rhode Island this month, opening the door to Fiber-to-the-Premise (FTTP) for local businesses and residents. Local officials are moving forward with a once in a multi-generational opportunity to share an underwater cable with Deepwater Wind and National Grid. The energy companies are laying lines to the nearby Block Island Wind Farm

A Brief History of Eight Strands of Fiber

The island is home to only one municipality, New Shoreham, which covers the entire land mass. Block Island residents have struggled with poor utilities for more than a century. Located about 12 miles off the Rhode Island coast, the island has never been connected to the mainland electrical grid or Internet backhaul network. As a result, the town of about 1,000 year-round residents has reported the highest energy costs outside of Alaska and dismal Internet speeds of 2 Megabits per second (Mbps) or slower download and upload speeds that are even more lethargic.

Local residents have put up with unreliable DSL Internet access from incumbent provider Verizon; it delivers service via microwave antennae. The island’s lack of bandwidth was the talk of the town in 2014 when up to 20,000 tourists flooded the network during the summer months:

  • “We have Verizon and live down in Franklin Swamp. No cell service. Our Internet is painfully slow unless you wake up super early. We have no choice but to disconnect when we come out to the island!”
  • “I was on the island for two weeks in July... We have Verizon and service was practically non-existent. My husband needed to complete some work and I was trying to update web pages I manage. Only had service downtown. Even the shop owners were having difficulties.”

Taking Advantage of the Sea Breeze

The first U.S. offshore wind farm is changing all of that. Eight years ago, Deepwater Wind and National Grid envisioned the five turbine pilot program they named the Block Island Wind Farm. Local officials convinced National Grid to include a mainland Internet connection in its undersea cable. Block Island Times reported on their success in 2012, 

“Deepwater will lay the cable at no cost to the town. At each end of the fiber optic cable, it would be the town’s responsibility to negotiate with a telecommunications service provider – be it Verizon, currently under fire for its DSL speeds here, or another provider.”

Options on the Horizon

The local government decided to move forward without Verizon. They hired a consultant in 2012 to advise the island on how to construct a publicly owned broadband network that will benefit future generations on Block Island. 

After a feasibility study in 2015, the town issued an RFI for potential partners - Internet service providers (ISPs) to operate a publicly owned network and potentially to build it. Earlier this year, the town narrowed down its options to two models under either GWI or Crocker Communications. From the RFI response memo

“Under both these models, the Town builds the complete (FTTP) network infrastructure, as well as the interconnection on the mainland from the National Grid cable to a negotiated point of presence for the selected provider. The Town is responsible for the fiber cable, electronics, real estate and structures. [The Town] received no responses under which the vendor would build a fiber network.”

Solving The Island Issue 

Block Island’s history is not unique - island communities often struggle to attract investment from larger ISPs as they are remote, sparsely populated, and often hilly. Islesboro, Maine, and Doe Bay, Washington, both suffered with unreliable, frustrating Internet connections and decided to take matters into their own hands. Islesboro’s 566 residents voted recently to bond and will build a gigabit FTTH network. Doe Bay became a self-reliant community with a fixed wireless system built and operated by its own residents

Early projections estimate a $4.3 million expense for Block Island’s network. Local residents are set to vote on bonding specifics at a town financial meeting later this summer. 

With the wind farm scheduled to be operational before the end of 2016 and the fiber network to be connected in early 2018, Block Island has taken massive steps towards a better future for its residents. They’ll be among the first communities in the world to power themselves with wind energy and own a next-generation fiber-optic network. 

Grover Beach Conduit: California's New "Silicon Dunes"

The city of Grover Beach, California, recently finalized a 10-year agreement with Digital West, Inc., to bring gigabit speed fiber to local businesses. The coastal town in San Luis Obispo (SLO) County wants to attract tech companies like those making waves in Silicon Valley and the "Silicon Beach" in Los Angeles. 

Terms of Agreement

The agreement specifies that Grover Beach will maintain ownership of the conduit system and lease Digital West conduit access at an annual rate of 5.1 percent of total fiber revenue. Digital West will build, own, and maintain the fiber-optic network, several lines of which will be leased to the city for public administrative use. Upon approval from both parties, the 10-year agreement can be renewed in 5-year increments.

A May 2016 Grover City staff report provided an optimistic forecast from Digital West:

The forecasted revenue amount speculated by Digital West Network, Inc. for the City is estimated to grow from a first year projection of $4,437 to $112,302 in year 10, for a total over the 10 years of $602,285. This amount is much higher than the originally predicted 10 year projection of $32,038 per year represented by Digital West Network, Inc. in 2014. The increase projections are due to the fact that they plan to add the residential market to our options which is projected to fall under the lease agreement. This brings greater benefit to the community, as well as more revenue commission to the City. 

We outlined the network’s projected costs in a story last year.

Fiber Surfin’ USA

The Central Californian coastal city hopes its unique location near a trans-Pacific cable landing station will attract scores of investment and cause the moniker “Silicon Dunes” to stick. Pacific Crossing’s undersea cable is part of a four point fiber ring connecting the Japanese cities of Shima and Ajigaura with Harbour Pointe, Washington, and Grover Beach.

Initial plans call for connecting the city’s 727 businesses. With little more than 13,000 residents and a city area of only 2.3 square miles, locals are optimistic that the rest of the community will be hooked up in the near future. Grover Beach Mayor John Shoals stated in the press release:

“The agreement is a major milestone in moving the City’s Broadband Network Initiative forward and achieving the Council’s goal of strengthening the City’s economic base by attracting new business... We look forward to continuing our partnership with Digital West to bring this important project to the community.”

With the agreement finalized, city officials will soon seek bids to lay remaining conduit. Construction may be underway as early as the end of the summer.