Perhaps the biggest disappointment from the broadband stimulus program was its focus on middle mile investments in a bid to avoid overly upsetting powerful incumbent providers who do not look kindly upon competition (something we discussed here). Some claimed that by increasing middle mile options, the private sector will have greater incentive to invest in the next-generation broadband networks communities desperately need. While this is undoubtedly true, it ignores the biggest hurdle facing network deployers: the high cost of building the network. Reducing the operating expenses of a new network by dropping backhaul prices does very little to allow a deployer (private, public, etc) to better afford the high capital cost of building the network. To illustrate, I could greatly improve my vertical but I still would not play in the NBA (apparently, that requires talent also). Remarkably, we have a fantastic test case of what happens when a government builds massive middle-mile connections and expects the private sector to complete the last mile build: Alberta Province in Canada. Ten years ago, Alberta began building the Supernet, a massive mostly fiber backbone delivering 100Mbps into just about every town in the province (we wrote about this in the back of our Breaking the Broadband Monopoly report). Despite the fact that anyone could get affordable backhaul, a recent Calgary Herald article revealed that half a million people still only have access to dial-up. This illustrates an important lesson: by making ubiquitous backhaul available, the private sector did invest. Unfortunately, it invested only in the profitable areas and has left perhaps a larger problem behind for the public sector to solve.

The county brought the broadband cooperative in to lease out unused fiber on the county’s 110-mile network, which it built over the past two years. The cooperative will connect business customers with its own members, which include various sizes of Internet service providers that can link the businesses to the network. Prices will vary depending on the service provider and location of the business.

Every county school, every major county facility and Carroll Community College is on broadband Internet, said Mark Ripper, chief information officer with the Carroll County Department of Technology Services. All county facilities and libraries and the board of education will have broadband Internet shortly, he said. The Maryland Broadband Cooperative, a public/private partnership that promotes economic development through technological infrastructure, will lease the "dark fiber," unused fiber, to its member companies, who can in turn sell Internet service to local businesses. The MDBC has 59 members, about 30 of which are Internet providers, said Patrick Mitchell, president and CEO of the MDBC.

As I was catching up on some of the good broadband stimulus awards, I came across this Sun Patriot newspaper article about Carver County's award. Carver County, perhaps having learned from its neighbor Scott County (which built a great FTTH network quite economically), will soon operate a broadband network far superior to the expensive leased T1 lines it currently uses. Carver County will receive almost $6 million from the award,

The county has agreed to provide $1.5 million, the required 20 percent match of the total project budget of $7.5 million. The county will use $400,000 in cash funds allocated from its Information Technology operating capital budget for the project. The remaining $1.1 million will come from a bond sale. The county’s recent upgrade to AAA bond rating means it will obtain the lowest possible interest rate on the 15-year bonds, according to a Carver County news release.

The Carver County Open Fiber Initiative (CCOFI) network will connect 86 anchor institutions (including 28 schools) in 55 locations and will not provide services directly to residential or business customers. Instead, the network will offer wholesale access to private providers, in hopes that they will improve broadband access in most areas of the county. The County will own the network; Jaguar Communications has partnered with the county to build and maintain the backbone. This network will allow the County to stop grossly overpaying some $230,000 a year for T1 lines delivering too little capacity for their needs. Over time, ownership of the network will allow them to pay less over time (with technological innovation lowering prices) for broadband rather than paying more over time as occurs with those relying on leased T1s. We continue to question any community that relies on leased copper rather the building their own fiber networks for essential muni functions.

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:

“With this broadband network, Bristol Virginia Utilities will enable service to more than 120 of what we refer to as anchor institutions,” [US Senator] Boucher said. “That includes schools, libraries, hospitals, clinics, major government facilities and other large public facilities. The new network will also come within two miles of 18,000 homes and 500 businesses. That makes it feasible for what we refer to as last mile service to be provided to these 18,000 homes and 500 businesses. Some of these have broadband today, but not all of them do.”

Boucher said the original broadband line deployed across the region several years ago has already helped to create a number of new jobs, including 137 new virtual call center jobs that have been created in the region by DirectTV, and another 700 plus jobs that have been created by the Northrop Grumman and CGI technology centers in Lebanon.

Once the non-profit has been formed, financing options would have to be identified, and preliminary design and cost estimate work would start. None of the cost of the project would be borne by the towns, Webb said. Ongoing maintenance cost and debt service payments would come from money paid to the agency by the service providers, added Andrew Michael Cohill, president of Design Nine, a consultancy hired to help WiredWest through the next phase of development.

Monica Webb, a spokesperson for WiredWest, said that a consultant who met last year with representatives from Mount Washington and 10 other towns in southern Berkshire County estimated the cost of building a fiber-optic network for that region at $27 million. But, Webb said, the consultant calculated that the roughly 12,000 households in the region were already paying an average of $125 a month for Internet and other telecommunication services – an amount that adds up to $18 million a year that people “are putting in an envelope and sending outside of your region.”

This will enable a robustmiddle-mile network to be built by the Massachusetts Broadband Institute (MBI) in Western and North-Central Massachusetts that will serve 123 communities.

Unlike numerous similar attempts in other parts of the country, Ontario County funded its network without dollars from the American Recovery and Reinvestment Act. Those who created Axcess Ontario were insistent the project shouldn't rely on the availability of outside funding, according to Edward Hemminger, CIO of Ontario County. The network's startup costs were $7.5 million, which the municipality generated through the Ontario County Office of Economic Development/Industrial Development Agency. The organization is a quasi-government agency created by the state to generate economic activity.

... Maine Fiber Co., won a $25.4 million grant to build what is called the Three-Ring Binder, an middle-mile fiber optic network that will include three fiber rings in Western, Northern, and Downeast Maine. Maine Fiber’s intent is to lease dark fiber as an open access network, and not to sell commercial services.

It [Three Ring Binder Network] is now facing a challenge from FairPoint Communications Inc.

• A columnist explains why Missouri hired broadband network consultant Jim Baller to aid in expanding broadband across the state.

  That won’t be easy. Fewer than two-dozen cable and telephone companies control more than 95 percent of the country’s residential broadband market. In the past decade, the “incumbents” have shut out competitors by restricting the use of their existing infrastructure and by suing any municipality or public utility that has tried to build its own network.

  This piece offers some good history for those relatively new to community broadband.

• Mike Masnick over at TechDirt recently asked (ironically) "But Wait, Wasn't Muni-Fiber Supposed To Take Away Incentive For Private Fiber?"

  Over the past few years, there have been numerous lawsuits by telcos against various municipalities that have decided to launch municipal fiber broadband projects. Most of these lawsuits have failed -- but the main argument from the telcos is that it's unfair to have to compete against the government, and it would take away incentives for the telcos to actually invest in infrastructure to provide for those towns. Of course, that doesn't make much sense.

  This article otherwise rehashes the Monticello post we recently ran.

• In Maine, Fletcher Kittredge makes the case for a public-private partnership to bring affordable middle-mile access around the state. These ultra-fast connections would not connect directly to home users, but will be open to providers creating those last-mile networks. In the meantime, it will strengthen community institutions like the University of Maine system. This is a project that should be funded by the stimulus program.