With the best intentions, Kentucky announced in late 2014 that it would build out a statewide open access fiber optic network to at least one location in each county to encourage high-quality connectivity in both urban and rural communities. Hopes were high as rural residents and businesses that depended on DSL and dial-up envisioned connectivity to finally bring them into the 21st century. After almost three years and multiple issues that have negatively impacted the project, legislators and everyday folks are starting to wonder what's in store for the KentuckyWired project. 

Local Communities Are Best Suited To Deploy Community Networks

There is no one-size-fits-all method of deploying across a state filled with communities and landscapes as diverse as Kentucky. From the urban centers like Louisville and Lexington to the rocky, mountainous terrain in the southeastern Appalachian communities, demographics and geography vary widely. But most lack modern Internet access and local ISPs have found it hard to get affordable backhaul to connect to the rest of the Internet.

There are several municipal networks in Kentucky, some of which have operated for decades. In addition to Glasgow, Paducah, Bowling Green, Frankfort, and others, Owensboro is currently expanding a pilot project that proved popular. As our own Christopher Mitchell discussed at the Appalachia Connectivity Summit, several cooperatives have made major fiber-optic investments in the state.

When it comes to connecting residents and local businesses, we strongly believe local entities are the best choice. Local officials have a better sense of rights-of-way, the challenges of pole attachments, and the many other moving pieces that go into network investment. Projects with local support see fewer barriers - people are more willing to grant easements, for instance. 

New Hampshire has made strides in bringing better connectivity to unserved areas with projects like New Hampshire Fast Roads, but for years one factor has held them back: state law limitations on municipal bonding for Internet infrastructure. Once again, a proposal to change the law is in the state legislature.

SB 170 - It's Simple

SB 170 proposes to eliminate the one provision in New Hampshire law that has prevented municipalities from bonding for Internet infrastructure - the requirement that the infrastructure can only serve properties where there is no existing service. By blocking access to funding, the requirement has prevented projects that might bring service to whole communities when small pockets of service already exist in those communities.

The House companion bill, HB 191, passed the Science, Technology and Energy Committee but died when brought before the full House for a vote. The bipartisan vote against the bill was 193 - 168, emphasizing that the issue of connectivity is not related to political party.

SB 170 was heard in the Senate Public and Municipal Affairs Committee in early February and, even though a number of individuals and organizations from communities in effected towns spoke on its behalf, a motion was presented to kill the bill. We’re happy to report, however, that the motion failed and the bill was rereferred to the same committee. It’s been sitting there ever since. In other words, it’s still alive, but it may not be picked up again unless committee leadership feel motivated to do so.

Tell Them, "It's About MY Hometown"

The community of Rock Falls, Illinois, is well on its way to developing a gigabit municipal network to offer better connectivity to residents, businesses, and public facilities. Last week, the City Council adopted an ordinance that allows the city to issue general obligation bonds to fund citywide fiber-optic Internet infrastructure.

Following Demand

The city’s plan will expand first in business corridors and then use the fiberhood approach in residential areas, building only after a certain percentage of households preregister. The plan divides the city into 14 fiberhoods with each area’s build out cost estimated to be approximately $250,000. Residential fiberhoods will require 45 percent participation prior to construction. Consultants estimate citywide buildout costs will be $13 million; the City Council authorized bonding for that amount. The first bond issue will be $4.1 million likely to happen in early May if approval proceeds as planned.

The City Council authorized the first phase of the project to begin - network design and project administration - which will cost approximately $207,000. The process to issue GO bonds will start in March and city leaders hope to have the backbone completed by the end of June.

Most publicly owned Internet infrastructure is funded by revenue bonds, avoided costs, or interdepartmental loans rather than GO bonds. When funded by general obligation bonds, a project is backed by the credit and taxing power of the issuing jurisdiction and the resource is always publicly owned. Clearly, the community of Rock Falls recognizes how critical the investment is to the community's future.

From The Mayor

In his recent State of the City address, Mayor Bill Wescott focused on three factors that drove the initiative: growth, the city’s strong finances, and local control.

While it’s common knowledge that economic development needs better connectivity than what is now available in Rock Falls, Wescott noted that residents stuck with 10 - 20 Megabits per second (Mbps) download Internet access need and deserve higher capacity connectivity to participate in the modern economy. He defined “growth” broadly, encompassing jobs, education, innovation, public safety, and government.

Not long ago, FairlawnGig in Ohio began serving businesses with symmetrical connectivity, offering speeds up to 1 Gigabit (1,000 Megabits) per second. The incremental build is progressing and now the city is offering Fiber-to-the-Home (FTTH) connectivity to residents in Fairlawn.

They Want It

According to a recent Akron Beacon Journal article, demand for residential services is already strong with more than 1,400 subscribers in line for installation; one-third of the installation is now complete. If 4,100 households and businesses in Fairlawn sign up, the city estimates it will break even. In the neighborhood where the first series of installations are taking place, 80 percent of households have signed up.

Fairlawn's goal is not to make profits from its investment; city leaders consider the network an essential piece of infrastructure like roads or sewers. They’ve chosen to fund the investment with municipal bonds, an atypical funding mechanism for Internet infrastructure. Their decision, however, underscores their commitment and belief that better connectivity is an essential service that will keep the community competitive.

“It’s going to make [Fairlawn] much more attractive,” [said local business development manager Mike Perkins]. “Fairlawn is at the forefront and everyone else is going to be playing catch-up.”

Nuts And Bolts Of FairlawnGig

When we interviewed Deputy Director of Public Service Ernie Staten about the project last spring, he described the city’s partnership with Extra Mile Fiber, an Ohio company that collaborates with Fairlawn to provide Internet access services. The city and Extra Mile will share revenue from the service, FairlawnGig.

A new year promises a fresh slate for many people. For the folks at Washington’s NoaNet, it means starting out 2017 bond-free.

In his year-end message, Chief Executive Officer Greg L. Marney announced that the organization has paid off its start up debt. At the November Board of Directors meeting, Controller Paul Harding reported that revenues are positive and that, “Budget to actual figures are favorable, with revenues above Budget and expenses a little below Budget.” Things are looking good at NoaNet.

A Washington Staple

NoaNet has become a solid presence in the state of Washington. In 2000, Northwest Open Access Network (NoaNet) began connecting 170 communities across the state with approximately 2,000 fiber miles. The middle mile network provides connectivity in both urban and rural areas to schools, libraries, hospitals, and other government facilities. Sixty-one Internet Service Providers (ISPs) offer retail services vis the open access infrastructure. Recently, Anacortes and NoaNet decided to work together as the small community addresses its local connectivity problems.

Last year, we put together a list of 15 NoaNet accomplishments, but you can also listen to Chief Operating Officer Dave Spencer visit with Christopher for episodes #164 and #159. Congrats to NoaNet!

Linda Gott, President of the NoaNet Board of Directors, cuts a cake to celebrate the payoff of NoaNet's startup bonds this year.

(Photo courtesy of NoaNet)

About a year ago, we reported that Rock Falls, Illinois, had decided to develop a fiber network to offer connectivity to local businesses. Now, the town of less than 10,000 is closer to expanding that network to offer Gigabit Internet access and voice to residents.

Considering Expanding Services

In September, community leaders began considering the expansion after consultants suggested investing in Fiber-to-the-Home (FTTH) as the best way to make use of the city’s resources. They offered a “fiberhood” option so Rock Falls Electric Department could connect new subscribers incrementally; they suggest starting with business corridors where many commerical entities are already taking service. The fiberhood approach requires people in specific areas of the city to sign up first, then after a certain percentage of the households committ, construction begins.

Rock Falls began planting fiber and conduit in the 1990s and have connected the municipal electric utility substations, schools, and other municipal facilities. They have also leased out excess capacity to private providers who want to offer connectivity to commercial customers in prior years.

Funding - It's Complicated

The fiber backbone is already in place but a complete citywide FTTH system will cost approximately $13 million, estimate consultants. After consulting bonding professionals, city leaders discovered that they needed to consider a few issues before deciding how to proceed. SaukValley.com reported on the financing discussion:

“We need either a feasibility study or our most recent audit that includes revenues from the broadband business to show we can make our bond payments,” [City Administrator Robin] Blackert said. “But a new feasibility study would cost us between $60,000 and $80,000, and we have no past revenue history with the new utility.”

Since late 2015, the small city of Fairlawn, Ohio, has been planning and preparing for a network with next-generation connectivity. The city is building the network, FairlawnGig, which will offer speeds of a Gigabit (1,000 Megabits) per second to subscribers. All speed tiers will be symmetrical, so upload and download will be equally fast.

Lightwave reports that FairlawnGig has officially connected its first two business customers: RDA Hotel Management and the architectural firm David A.Levy & Associates.

Necessary Connectivity For Businesses

RDA Hotel Management officially signed up for the service and immediately experienced a 733 percent increase in Internet access speeds in its local hotel. The management company owns and operates the Hilton and Doubletree hotels throughout the nation. Two of the company's hotels have been connected to the network since early August as “beta customers” of the network. These “beta customers” (including hotels that hosted some Republican National Delegates) helped determine how well the network functioned, providing feedback on how to improve the experience for future subscribers. 

The local architectural firm David A. Levy & Associates is also pleased with the new connectivity. Neal Levy, business development director at David A. Levy & Associates described how the municipal fiber network has already improved productivity in the Lightwave article:

 "Prior to FairlawnGig, reliability was a serious issue and it took several minutes to save, transmit, and open a 50-MB file. Plus, our team couldn't work simultaneously in an AutoCAD [a design application used by many architect firms] file while it was auto saving or the file would freeze. Now it takes less than 10 seconds to open or save a file."

The FairlawnGig Story

With charming cornfields and bustling cities, Iowa is a Midwest hub of community networks. Harlan, the county seat of Shelby County, is located in west central Iowa. About 5,400 people live in the town, situated along the West Nishnabotna River. Back in the ‘90s, Harlan was one of several Iowa towns that built their own cable networks to deliver video and Internet services. In August, Harlan Municipal Utilities (HMU) announced it will continue upgrading to fiber, a project they started in 2012. Upon completion in early 2017, much of the town will have Internet access via fiber.

The Present: 2016-2017 Fiber Project

HMU announced the project on their website in early August. For more details, we spoke with Director of Marketing, Doug Hammer, previously a guest on our Community Broadband Bits podcast. 

During the fiber expansion, HMU will build out to the southern half of town, which is bounded by Highway 44 to the north, Highway 59 to the west, and the river to the east. The utility also intends to build out slightly north, into the center of town. The project will take approximately six months to complete. 

First, HMU will install conduit, the reinforced tubes which hold the fiber, to all their electric, gas, and water customers along major roads. Then, in the first quarter of 2017, they will bring fiber to homes and businesses. [Update: Those homes and businesses already receiving telecom services. Fiber to non-telecom customers will be connected if the property adds telecom services or when advanced metering applications are launched.]

The Past: Projects and Paperwork

By 1997, HMU was providing Internet service via a Hybrid Fiber-Coax (HFC) network. They financed the network with a grant from the Commerce Department and utility revenue bonds. Committed to affordable, high-quality service, the utility began to install fiber in certain areas in the north [Update: the northwest portion] of town in 2012.

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.

Now that a judge has legally approved it, Ammon is forging ahead with an innovative approach to financing Internet infrastructure in Idaho.

On May 19th, the city council unanimously voted to create a Local Improvement District (LID). Ammon’s decision has secured a way to finance its open access Fiber-to-the-Home (FTTH) network.

Local Improvement Districts: You're In or You're Out

LIDs have been used for fiber-optic infrastructure in other places, such as New Hampshire and Poulsbo, Washington, but the approach is still not widespread. In Ammon, the city council's action creates a district from five subdivisions, where residents can “opt in” or “opt out” of participation in the FTTH network. The district includes 376 individual properties, and 188 of those property owners have expressed a desire to "opt in" to the benefits, and costs, of the network. Those who have chosen to "opt out" do not use the network, nor do they pay for deployment.

LIDs are specifically designed to take advantage of any boost to local property value -- and studies have linked FTTH with increased local property values. We’ve previously summarized the most common ways communities finance networks, but LIDs are a little different.