Multichannel News Examines Munis and Economic Growth

Multichannel News recently published an informative and detailed look at municipal networks and the surge in interest that communities have exhibited as they've explored ways to improve local connectivity. Author Mike Farrell provides an indepth examination some of the many local communities that have used fiber optic connectivity to attract job creators and some of the common challenges they've encountered.

Still Some Opposition 

As Farrell notes, several candidates for President have mentioned funding for municipal networks in their platforms, bringing more attention to publicly owned Internet networks. The interest has been growing for some time, however, as has opposition. Farrell writes:

But no matter which side you’re on, one thing is increasingly clear: municipal broadband is gaining steam and some communities are finding innovative ways to finance and maintain projects. And the risk, as many areas are finding out, is becoming worth it.

When Farrell spoke with the NCTA - The Internet & Television Association (formerly the National Cable & Telecommunications Association), which lobbies on behalf of large and small Internet service providers, they indicated a dislike of competition:

“Broadly, we support government programs that dedicate money to building networks where they don’t exist or make economic sense for private ISPs to build, and believe that taxpayer dollars should not be used to subsidize competition where networks already exist,” NCTA senior vice president, strategic communications Brian Dietz said in an email message.

Here and There

Farrell covers communities where networks have been serving the public for years and in places where locals have only recently decided to make the investment. One of the places Farrell writes about, which many other authors have covered, is Chattanooga, Tennessee: 

When municipalities want to talk about successes, they usually point to Chattanooga, which built its broadband network in 2009 and became the first municipality in the country to offer 1 Gigabit per second Internet service city-wide. That “Gig City” designation made the community a magnet for business. According to a study by the University of Tennessee, broadband helped drive about $1.3 billion in economic development and attracted about 5,200 jobs between 2011 and 2015.

Read more from the study by Prof. Bento Lobo here [PDF] and learn about the development of the network from our 2012 report Broadband At the Speed of Light: How Three Communities Built Next-Generation Networks.

In addition to the southeast, one of the regions where publicly owned fiber optic networks have ample support is in Colorado:

“Colorado is a hotbed of activity right now,” said Colman Keane, broadband executive director for Fort Collins Connexion, the municipal broadband service in that rural town. Before coming to Fort Collins, Keane was director of fiber technology at Chattanooga’s EPB.

Keane likened the move toward municipal broadband to moves in the 1930s to electrify the country. 

“Municipal investment in utilities has been going on forever and citizens should have the right to self-determination,” Keane said. “If they feel that it is in their best interest to have core infrastructure available for their future growth or economic development, social equity issues, they should have the right to do so.”

In Colorado, voters in around 145 municipalites and counties have decided to opt out of the state's restrictive SB 152, which prevents them from investing in publicly owned Internet network infrastructure. Keane tells Farrell that incumbents have improved services in the areas now served by munis, which is a common occurrence in many other communities we've studied. Often incumbents improve the services they offer simply when a local community discusses investing in a network.

More Models 

The article also discusses the public-private partnership between Huntsville Utilities and Google Fiber, in which Google leases dark fiber from the utility to serve businesses and residents.

“Our financial return is not based on Google’s sales success,” Huntsville Utilities CEO Wes Kelley said. “This is not a revenue share. They are leasing our infrastructure for a fixed price per hme passed. To our knowledge no one else has done that before.”

Kelley said HU has already turned over about 90,000 addresses to Google, and plans to increase that to 105,000 in early 2020. “How many of those are Google [Fiber] customers, I have no idea,” he said.

Even though the network is still being deployed, it's already having an impact: 

Although Huntsville hasn’t fully completed the network yet, several big economic development projects came to life shortly after plans for the service were revealed, including Mazda-Toyota’s plans to build a $1.6 billion auto assembly plant and Facebook’s pledge to construct a $750 million data center in the city. In addition, Blue Origin, Amazon chief Jeff Bezos’s rocket company, is spending about $200 million to set up shop to build rocket engines in Huntsville. Toyota is increasing the size of its engine plant at a cost of about $288 million, separate from the other Toyota facility.

Farrell talked to Tom Reiman from The Broadband Group about more opportunities for public-private partnerships, including the recent agreement annoncement between Springfield, Missouri, and CenturyLink.

“Together we de-risk the partnership because we both have to make it work,” Denzin [of NTCA] said. “That’s why this partnership with Springfield is going to work, because we’re both fully vested. They’re great at something. They’ve chosen to stay great at that one thing. We’re great at certain things as well: transport, content delivery, billing, delivery in the home.”

Read the full article here. This is a good read!