Tag: "FTTH"

Posted October 18, 2010 by christopher

As Salisbury prepares to officially launch its publicly owned FTTH network offering triple-play services, it offers lessons for other communities that want to follow in its footsteps. As we wrote a month ago, Fibrant has candidly admitted it cannot win a price war with incumbents. Companies like Time Warner Cable have a tremendous scale advantage, which allows them to price below cost in Salisbury because the large profits from all the non-competitive markets nearby can subsidize temporary losses.

On October 10, the Salisbury Post ran a story "Fibrant can't match cable company specials." Alternative possible titles for the article could have been "Cable Co cuts prices to drive competition from market," or "Time Warner Cable admits customers pay different prices for same services." Interestingly, when Fibrant unveiled its pricing originally, the headline read "Fibrant reveals pricing" rather than "Fibrants offers speeds far faster than incumbents."

A lesson for community networks: do not expect the media to cover you fairly. The big companies have public affairs people with relationships with the press and they often buy a lot of local advertising. This is not to say all local media is bought off -- far from it -- but local media will have to be educated about the advantages of community networks.

Quick question: When you hear this quote, who do you first think of?

"We always work with customers to meet their needs and budget."

The cable company, right? Well, that is Time Warner Cable's claim in the above Salisbury Post article. Later in the article, a local business owner expressed a different sentiment: "Time Warner has the worst customer service I have ever dealt with."

The business owner goes on:

“Fibrant may have these same kind of issues, however I can actually go to the source to deal personally with someone who is vested in the community, not spend two hours on the phone and never solve the problem as I do with TWC,” he said.

“Even if pricing is higher, I would make the change. Price is important, but quality and service is tantamount.”

Speaking of the services...

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Posted October 6, 2010 by christopher

In Virginia, Danville's open access all-fiber network, nDanville, currently serves only businesses and large clients. In the early summer, Danville Utilities decided to recommend expanding the network to between 2,000 and 3,000 residential homes with a 10 year, $2.5 million loan.

As Danville Utilities operates the network purely on a wholesale basis, it would not provide services directly. From an article leading up to the decision:

Danville Utilities would run the broadband services to the homes, to a box mounted on the house, and the user would pay a monthly service fee of $8.80 on their utility bill for the box. Gamewood would bill customers for the actual services provided, and pay the city 20 percent of those charges as an access fee for the cable.

Gamewood, a company that would have provided IPTV services on the network, had attempted to measure subscriber interest by mailing a postcard to 1000 local residents. The response failed to persuade at least one city council member, who demonstrated a total lack of understanding of the situation.

Luther bluntly said he had “no faith” in the numbers, and said he is convinced “nDanville is not going to fly.”

“If they want to build it, let Gamewood built it,” Luther said.

Of course, a private company is not interested in an investment that takes 5 years to break even. Even if it were, it would have little incentive to open the network to competition as nDanville does.

Ultimately, the City Council neglected to fund the project - perhaps an unsurprising decision in a time of economic woe. However, for a community like Danville, one wonders how it will recover without access to better broadband than last-generation cable and DSL services that are commonly available throughout the region.

The local paper editorialized in favor of the decision, but noted that the public power utility should continue expanding the network for commercial subscribers.

Posted October 2, 2010 by christopher

Missouri's Cass County, has received both a loan and grant from the broadband stimulus program run by the RUS in the Department of Agriculture.

The $26 million “Last Mile, Fiber-To-The-Home” network will be capable of providing service to 18 communities, nearly 12,000 households and 700 businesses within 625 square miles of mostly rural and underserved areas of the county.

The project, funded by an $18 million grant and $8 million in loans, also will connect schools to students and hospitals to patients.

Like the Cook County, MN, project, Cass County is working with Pulse Broadband to build an open access network.

Posted September 24, 2010 by christopher

The nation's newest community fiber network (FTTH) is launching in Salisbury, North Carolina, in the next month. Fibrant, a $29 million project financing by general obligation bonds, is slightly behind schedule but way ahead of the cable and DSL competition.

The City Council has approved the network's pricing in anticipation of hooking up customers in October. Some 70 people have been testing the network, but it will soon be available to everyone in the community. The basic tier of broadband speeds is 15Mbps and they have a second tier at 25 Mbps. The network is capable of much faster speeds but these are the tiers they will start with, making them the fastest basic tier available in North Carolina.

They are offering over 460 television channels, of which 100 are HD. HD quality over fiber-optics tends to be the highest quality viewing experience (though not everyone can tell, depending on their level of obsession with picture quality) but the first year or so of video service on Fibrant may suffer from occasional problems as they iron out the quirks of the new system. Reports of the broadband and voice services are tremendously positive.

They have made it clear that they cannot get into a price war with incumbents (Time Warner Cable and AT&T) and cannot beat the "promo" prices these companies offer for the first x months. However, Fibrant's rates are 7-10% lower than the regular rates of the incumbents and will come with local, superior, customer service.

Big companies like Time Warner Cable often claim they are at a disadvantage relative to these municipalities but the reality is that the massive scale of national cable and phone companies give them many more advantages to offer lower prices for their services (which tend to also be lower in quality).

“If you get deal you can’t refuse from someone else, just thank Fibrant for it because you wouldn’t have gotten it if we hadn’t been here,” Clark [Fibrant Marketing Director] said.

Fibrant aims for a 30% take rate (4400 subscribers) by the end of year 3 and a positive cash flow in year 4. Pricing and channels lineups are available at the end of this Salisbury Post article. Subscribing to the service has no installation fee...

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Posted September 22, 2010 by christopher

If Seattle moves forward on the Community Fiber Network it has been considering, it will be the largest such network in the nation. However, as we recently noted, progress has been slow. Reclaim the Media recently noted progress toward publicly owned fiber in Edmonds and asked why Seattle is stuck in the mud on the issue.

The City's "Seattle Jobs Plan" devotes a significant mention of a publicly owned fiber network as a smart investment:

Seattle’s economic prosperity, its ability to deploy effective public safety systems, and its determination to reduce gridlock and greenhouse gases are increasingly dependent on its communication systems. Currently, the communication systems serving Seattle businesses and residents are controlled by a few private companies, using older technology. With a lack of competition, there is little incentive to invest in more innovative technologies. Although some of Seattle’s larger institutions have migrated to their own fiber networks, these types of networks are unavailable to residents and Seattle’s small businesses. Multiple surveys indicate that 70% of Seattle households want to see more telecommunications competition. A recent study listed global cities with the fastest broadband connections; not a single U.S. city was listed in the top 20. A network of municipal fiber optic cables would instantly put Seattle at the top of the list of U.S. cities capable of supporting next-generation, data-intensive businesses, making it a potential hub for a number of fast-growing industries.

But the network requires a significant amount of planning:

The City has built and maintains a high speed, fiber optic broadband network connecting schools, government facilities, and community institutions. An interdepartmental team of staff in SCL, SPU and DoIT are currently developing a high level business plan that will guide this effort to expand broadband to businesses and homes. The business plan will be completed in early 2011. Once the plan is finalized, the City will explore funding options and next steps.

The report notes that Seattle applied for BTOP stimulus funding from NTIA, but the recent...

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Posted September 17, 2010 by christopher

Jackson Energy Authority in Tennessee, long the largest community fiber network in the US, is investing in greater smart-grid capabilities. If you aren't already familiar with this network, an article in Electric Light & Power offers some history:

After receiving local government support and revenue bond issue funding, JEA went ahead with the $54 million project. Now its FTTP network boasts 16,500 cable, 10,843 Internet and 7,000 telephone subscribers. JEA is preparing for the next phase of its FTTP deployment with a smart grid initiative expected to begin in 2010.

The article also makes an important point that many find confusing in understanding the economics of these community fiber networks:

In the early years, JEA focused on subscriber growth as its key performance metric, rather than average revenue per user (ARPU). The capital-intensive cost of acquiring and hooking up new customers, however, can create significant cash flow problems for a network operator, especially when growth substantially exceeds the business plan. JEA had to secure more financing to support its incremental growth. The utility also adjusted its business model to focus instead on ARPU and increasing the number of existing subscribers using two or three services. JEA employed special promotions and service packages that took advantage of the huge bandwidth capabilities of its fiber network to build customer loyalty and overcome the customer churn typical of the industry. Today, JEA’s network has passed more than 30,000 homes, more than 16,000 of which are subscribers.

This is a good example of a community encountering a problem and overcoming it. The article also offers other lessons learned along the way. Moving forward, JEA has decided to work with Tantalus to add smart-grid capabilities to the fiber network.

Posted September 15, 2010 by christopher

This is a follow-up to my coverage of Chattanooga's 1Gbps announcement and press around it.

Firstly, I have to admit I was simultaneously frustrated and amused by reactions to the $350/month price tag for the 1Gbps service, like Russell Nicols' "Chattanooga, Tenn,. Gets Pricey 1 Gbps Broadband."

Wow.

I encourage everyone to call their ISP to ask what 1Gbps would cost. If you get a sales person who knows what 1Gbps is, you will probably get a hearty laugh. These services are rarely available in our communities… and when they are, the cost is measured by thousands to tens of thousands. Chattanooga's offering, though clearly out of the league most of us are willing to pay for residential connections, is quite a deal.

The reaction that it is pricey blows my mind… at $350 for 1Gbps, one is paying $.35 for each megabit. I pay Comcast something like $4.5 for each megabit down and $35 for each megabit up (I actually pay more as I rarely get the speeds advertised).

Make no mistake, Chattanooga's 1Gbps is very modestly priced. And I would not expect many communities to duplicate it. Chattanooga has some unique circumstances that allow it to create this deal; the fact that other community fiber networks around the country cannot match it should not be taken as a knock against them. Ultimately, communities must do what is best for them, not merely try to steal the thunder as the best network in the nation.

But for the folks who have the best network in the nation, I get the idea they have enjoyed the vast coverage of their creation. The Chattanooga Times Free Press ran a lengthy story titled "Fastest on the web."

"We can never overestimate the amount of bandwidth that will be needed in the future," said jon Kinsey, a Chattanooga developer and former mayor who is working with local entrepreneurs to study ways to capitalize on the faster broadband service. "What EPB has set up gives us an opportunity as a community to get into a whole new realm of business growth."

One might expect that the president of the "Information Technology and Innovation Federation" would be interested in the most cutting edge broadband network in the country --...

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Posted September 14, 2010 by christopher

I just spoke with Danna MacKenzie of Cook County and Gary Fields of National Public Broadband (working with Lake County) to find out just how excited they are about yesterday's announcement of broadband stimulus awards. Both Lake and County (separate projects) have been funded to build fiber-to-the-home networks to everyone on the power grid in the region.

They are pretty excited.

In a few years, these North Shore Communities will likely have better broadband options than the metro region of Minneapolis and Saint Paul -- a far cry from the beginning of this year when a single fiber cut stranded the whole north shore.

Bob Kelleher at Minnesota Public Radio covered the awards:

Combined, they will connect 37,000 residents, 1,000 businesses and 98 institutions such as hospitals and schools.

Cook County actually has a double whammy - they already stood to benefit from the North East Service Cooperative, which is building high capacity fiber-optic lines through the North Shore to offer middle-mile backhaul and connect local government facilities and schools.

As of yesterday, they will also get a fiber-to-the-home network from the Arrowhead Electric Cooperative. Cook, currently served in part by Qwest, has little access to true broadband -- some 37% have access to anemic DSL connections and the rest are stuck with dial-up.

Details of the award from Kelleher at MPR:

Joe Buttweiler, who directs membership services with the Lutsen-based Arrowhead Electric Cooperative, said 70 percent of the federal award is a grant and the remainder a loan. He said the cooperative will add another $600,000 for capital.

Back in April, Blandin's Broadband blog published the short summary of the Arrowhead project:

Arrowhead Electric Cooperative proposes to build and operate a fiber optic network to the residential and commercial...

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Posted September 13, 2010 by christopher

Chattanooga has announced a new level of service, offering 1Gbps to all subscribers in a unique citywide offering. Chattanooga previously led the nation with a 150Mbps tier. Today has been crazy, and lots is being written about this announcement, so I'll highlight stories and saving adding something interesting until later.

A quick reminder, we recently wrote about their insistence on taking fiber to everyone, rural and urban.

The New York Times started the Choo Choo coverage this morning:

Only Hong Kong and a few other cities in the world offer such lightning-fast service, and analysts say Chattanooga will be the first in the United States to do so. “This makes Chattanooga — a midsized city in the South — one of the leading cities in the world in its digital capabilities,” said Ron Littlefield, the city’s mayor.

Ars Technica offers additional perspective (as usual):

The city hopes this will give it a competitive advantage; on the new website promoting the service, the city's Electric Power Board pitches its country-leading broadband as "a test bed for next generation technology," as "the ultimate tool for entrepreneurs," and a place where "bandwidth is no problem." The consistent theme: you should move to Chattanooga.

(It also reminds us that Chattanooga is far beyond the FCC's timid goals in the National Broadband Plan.)

Giga Om has lost the lust for his still-respectable 100Mbps.

EPB says that their 100 Mbps service is now costing $140 a month and the 1 Gbps service will cost $350 a month.

Though Chattanooga has beat Google to the punch, this does little to change Google's goal of even cheaper 1Gbps with open access - the race is not simply to 1Gbps, it is to the future! Those who are putting Google down in some way are grasping for something to say about a stunningly unique offering. Sad to see Google put down in some way merely because they announced their big ambitions.

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Posted September 6, 2010 by christopher

OptiLink, the community fiber network in Dalton, Georgia, has been chosen by local newspaper readers as the Best Internet Provider in 2010 - the third year in a row.

According to Stop the Cap!, the community network has a take-rate of 70% and generates $1.5 million in revenue monthly - real money that stays in the community rather than being distributed to Charter shareholders.

Learn more about OptiLink here.

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