Lake Oswego School District (LOSD) in Oregon is set to make an investment that will save up to $301,000 per year in telecommunications costs - its own dark fiber network.

To Lease Or To Own? There Is No Question!

LOSD is the latest in a string of local schools that have chosen to invest in fiber infrastructure for long-term savings. Caswell County, North Carolina, is also investing in dark fiber with an eye on the future. Because the school district will own the network, they will no longer be surprised by unexpected rate hikes, making budgeting easier. The money they save can be directed toward other programs and, because it is dark fiber, they are only restricted by the equipment they install and the bandwidth agreements they enter into with Internet Service Providers (ISPs). Some schools choose to become ISPs themselves or join collaborations in which they can purchase bandwidth collectively to save even more. 

According to Joe Forelock, the district’s assistant superintendent for academic and student services, “This is a long-term investment for the health of the district over the next many, many years.” Once the network is in place, it will cost approximately $36,720 annually to maintain it, which is 89 percent less than what Comcast plans to charge LOSD for the 2016 - 2017 school year. 

We want to note that Comcast tripled their rates from the 2015 - 16 school year, in part because the 2016 - 17 contract was only for a year while the dark fiber network is being constructed. With no competition in the region, Comcast has broad practical authority to decide what LOSD will pay. “Right now, Comcast is essentially the only game in town in many communities," Morelock says, "including LO."

Clackamas County will install the $1.54 million network; 40 percent of the total cost will be reimbursed through E-rate, the federal program for schools that pays for Internet access and certain infrastructure expenses.

“After six years, if costs remain the same and do not increase, or decrease for that matter, the district will save $181,000 per year in connectivity costs with the E-rate discount, or $301,000 per year if E-rate were to disappear,” Morelock says.

Connecting In Clackamas

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A recent series of in-depth articles from Education Week brings to light a persistent aspect of the digital divide: the lack of fast, affordable, reliable connectivity in rural schools. Throughout the country, schools struggle to pay exorbitant fees for aging copper networks. Teachers and students are cut off from digital learning opportunities as whole regions fall farther behind. Education Week brings these issues to the forefront - and community-owned institutional networks could be the answer.

The Education Week articles describes the harsh impact of these grim statistics. The nonprofit EducationSuperHighway found that for rural schools, the median price for connectivity is more than double that of urban or even suburban schools. Although the number of students without access to sufficient bandwidth has been cut in half since 2013, at least 21 million students do not have access to adequate connections. 

In extremely rural communities, large service providers do not have an incentive to build high-speed networks, and small private providers often cannot take on those high upfront costs. This leaves communities with no choice, but to pay skyrocketing rates for slow, unreliable Internet access over aging infrastructure.

East and West: Students Face Similar Challenges

The articles present two compelling case studies of Calhoun County, Mississippi, and Catron County, New Mexico, to tell the story of how high-speed connectivity is so often out-of-reach for rural schools.

Two schools in sparsely-populated western New Mexico split 22 Megabits per second (Mbps) of bandwidth for $3,700 per month. An increase to 50 Mbps wouldn’t require  new fiber, but the upgrade would cost an extra $1,003.47 each month. The local provider has a de facto monopoly in the region so the schools have no choice but to pay the going rate; with no competition they have no leverage for negotiating. According to the New Mexico Public School Facilities Authority, monthly rates range from $1.35 to $3,780 for each Mbps of speed across the state.

In Calhoun County, the...

In the 1990s, the community of Shafter, California, began developing its strategic plan; the move would eventually lead them to build a municipal broadband network. The town of 17,000 still depended primarily on agriculture but manufacturers were relocating to the community, drawn by its proximity to the railroad and its open space. Potential employers increasingly focused on broadband access as a priority and Shafter realized broadband would be critical to continued growth.

Shafter’s Assistant City Manager Scott Hurlbert recently explained to us how the community built its own fiber network to serve commercial clients, local government, and schools. This incremental approach is not unique but Shafter has no municipal electric nor gas utility, which does puts it in the company of Santa Monica, Mount Vernon, and a few other communities that have built networks without having a municipal power company.

Shafter’s City Council examined its strengths and its weaknesses and found a way to build a network with no borrowing or bonding. The community continues to expand its fiber network, attracting businesses and improving quality of life in this central California town.

In the 1990s AT&T was the main business services provider and it would only improve business telecommunications on an order-by-order basis. Companies that wanted to build beyond the developed town had to pay for the installation themselves, often waiting months to get connected. Prices were "obscene" and the delays almost killed several commercial deals. Even today AT&T takes the same approach in Shafter.

When he joined the City in 2005 as the IT Director, Hurlbert and his staff researched wireless technologies but determined that fiber-optic deployment would be the best option. At that time, the bandwidth demand was already intense and a wireless network would need fiber for backhaul. Hurlbert and staff also investigated other communities, including Chelan, Washington, to look for workable models.

In 2006, three master planned residential subdivisions were approved for expansion of the City of Shafter. The city saw this as an opportunity to...

The Federal Communications Commission released the results of a survey of libraries and schools, the 2010 E-Rate Program and Broadband Usage Survey - announcement here [pdf] and full report here [pdf].

As critical as we are of the FCC, I would like to note that the FCC is doing a better job of collecting data than it did in the past.

I want to highlight a few interesting pieces from the report. Of the respondents, only 21% of schools and 13% of libraries have connections riding on fiber-optics. Half of schools and libraries are stuck on T1 lines.

Schools and libraries reported 63% and 65%, respectively, connections that were under 10Mbps. Considering these connections are likely serving many concurrent connections, they should have faster connections.

The vast majority want to have faster connections:

The question is why they want faster connections. Only 20% say their current connection completely meets their need to conduct online testing and assessment applications - with another 44% saying it "mostly" meets those needs.

These gaps represent a tremendous opportunity for growth - communities should be building their own fiber-optic connections to connect these key institutions and ensure they will have affordable, fast, and reliable connections well into the future. By owning the network, these institutions will have greater control over future costs and their capacity to take advantage of even newer applications.

The FCC should favor locally owned networks to encourage self-reliance instead of never-ending subsidies to private carriers who have little incentive to lower prices and increase investment.