Tag: "barrier"

Posted August 3, 2012 by lgonzalez

Just this week, the Office of the Legislative Auditor General of the State of Utah released a report to the Utah Legislature on UTOPIA. The report, titled A Performance Audit of the Utah Telecommunications Open Infrastructure Agency rehashes prior criticisms of UTOPIA and tells the abridged story of the Auditor's understanding of UTOPIA's financial troubles.

While one can accept the report as truthful, it certainly is not comprehensive. Jesse Harris, of FreeUTOPIA notes that leaving out certain pieces of information taint the presumed impartiality of the report. From Jesse:

The Legislative Auditor General has published an audit of UTOPIA, and, as expected, it drags a fair amount of ancient history back into the spotlight.  The report concludes that additional accountability will alleviate the problems that UTOPIA has experienced, but it missed the mark on a number of points.

The Audit Scope and Objectives are spelled out in the beginning as:

Members of the Utah Legislature asked for an audit of UTOPIA so residents of UTOPIA member cities might know how the organization has used its funds. Legislators also asked for a review the organization’s general management practices. To address their concerns, we developed an audit plan to review the following areas:

  • The size and use of UTOPIA’s debt financing
  • The causes leading to UTOPIA’s current financial 
condition
  • UTOPIA’s management and board governance practices

While there are many bar graphs, pie charts, and dollar signs in the report and it seems to meet the scope and objectives, financial information alone does not explain UTOPIA's troubles. The first place to look is close to home.

From the beginning, UTOPIA has had to overcome difficult odds in a hostile legislative environment. As we note on our Community Broadband Map, the State of Utah effectively requires that community networks function as wholesale-only. The mandate puts them at a significant financial disadvantage from the beginning, severely limiting the amount of revenue they can collect...

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Posted January 5, 2012 by christopher

Provo built a city owned FTTH network after its public power utility started connecting its substations with fiber-optic cables in the early 2000's. iProvo ultimately developed along similar open access lines as UTOPIA, but unlike UTOPIA, Provo did not actually want to operate on a purely wholesale model.

iProvo was forced into the wholesale-only model, where the publicly owned network offered wholesale services to independent ISPs that then resold service to residents and businesses. Comcast and Qwest (now CenturyLink) recognized the threat posed by municipalities building next generation networks -- particularly in communities that did not even have full DSL and cable coverage from the giant providers that long delayed upgrades, knowing that subscribers had no other options.

Comcast and Qwest went to the state legislature and did what they do best -- bought influence and pushed through laws to essentially prohibit publicly owned networks from offering direct retail services, knowing that the wholesale-only approach had proved a very difficult model to work financially.

UTOPIA had long had a vision of making the open access, wholesale-only model work (that proceeded to largely fail, for a variety of reasons -- only to start turning around in recent years) but Provo, with its public power utility, was denied its preferred model of offering services directly.

iProvo was built at a cost of $40 million and has operated in the red since, though a number of postive externalities from the network was not included in those calculations. For instance, City Departments had access to much higher capacity connections than were available previously and were not charged for them (a poor practice in our estimation). For more details on iProvo, I recommend a video of a discussion in 2011.

At any rate, iProvo was then sortof sold off to a private provider (sort of because the city is still on the hook for the debt) in large part because private providers are not as crippled by state law. Unfortunately, the network has already developed a bad reputation for many (thanks to the state law preventing Provo from being able to ensure a good subscriber experience).

And now Provo is...

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Posted November 9, 2011 by christopher

Minnesota's Governor Dayton has already done more for expanding broadband access in Minnesota than predecessor Pawlenty who took the "stay quiet and hope for the best" approach to expanding access in our state.

After being prodded by the legislature (including now-Lieutenant Governor Prettner-Solon) Governor Pawlenty appointed an industry-heavy "Ultra High Speed" Broadband Task Force that exceeded the expectations of many, including myself, with its report [pdf]. I give a lot of credit to a few members, especially "Mikey" and Chairman Rick King of Thomsen Reuters, for that report given the constraints of the environment in which it existed.

Minnesota's Legislature and Governor Pawlenty then created some goals for 2015 and generally ceased any work on ensuring Minnesota could meet the goals. However, some departments (like the Department of Commerce) are using that language to prod broadband providers to consider what steps they can take to get us closer. Despite my frustration, I want to recognize those who are doing all they can to expand access to this essential infrastructure.

Fast forward to this week, when Governor Dayton announced a new Task Force that is supposed to really do things (as opposed to the more common Task Force approach of creating the appearance of doing things).

I am heartened by many of the appointees. There are some terrific people, especially some terrific women who are too often under-represented in technology) that will work very hard to bring real broadband to the Minnesotans that either need their first option or a better option.

And they have their work cut out for them. The state has few options to compel investment from a private sector that sees little reason to invest in an industry with so little competition (St Paul has one high-speed provider: Comcast, and one slower, cheaper alternative - CenturyLink).

For instance, rural Kanabec County took the Ultra High Speed Task Force's recommendation and asked its incumbent to partner in providing better broadband. That went over about the...

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Posted July 12, 2011 by christopher

You can also read this story over at the Huffington Post.

How can it be that the big companies who deliver some of the most important services in our modern lives (access to the Internet, television) rank at the top of the most hated? Probably because when they screw up or increase prices year after year, we have no choice but sticking with them. Most of us have no better options.

But why do we have so few choices? Government-sanctioned monopolies have been outlawed since the 1996 Telecommunications Act. Unfortunately, the natural tendency of the telecommunications industry is toward consolidation and monopoly (or duopoly). In the face of this reality, the federal government has done little to protect citizens and small businesses from telecom market failings.

But local governments have stepped up and built incredible next-generation networks that are accountable to the community. These communities have faster speeds (at lower prices) than the vast majority of us.

Most of these communities would absolutely prefer for the private sector to build the necessary networks and offer real competition, but the economics of telecom makes that as likely as donuts becoming part of a healthy breakfast. In most cases, the incumbent cable and telephone companies are too entrenched for any other company to overbuild them. But communities do not have the same pressures to make a short-term profit. They can take many years to break even on an investment that creates many indirect benefits along the way.

One might expect successful companies like AT&T and Time Warner Cable to step up to the challenge posed by community networks, and they have. Not by simply investing more and competing for customers, but by using their comparative advantage – lobbying state legislatures to outlaw the competition. As we noted in our commentary and video last week, massive cable and telephone companies have tried to remove...

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Posted January 14, 2011 by christopher

Last night, local officials from all over Sibley County gathered in Arlington to learn about the potential fiber-to-the-farm broadband network they could build as early as 2012. Dave Peters, from Minnesota Public Radio, attended and discussed the meeting on MPR's Ground Level blog.

More than 50 elected officials -- county commissioners, city council members, township board supervisors -- gathered in the Arlington Community Center last night to inch ahead a plan to lay fiber optic lines to every home and business in the county plus those in and around neighboring Fairfax in Renville County.

It's an ambitious plan that would require the community to borrow $63 million and then pay off those bonds with revenue from the service. The county-owned operation would offer the usual cable-phone-Internet triple plays, and backers are promising that right out of the gate it would be at a speed of 20 megabits per second, upload and download. That's quite a bit faster than what area residents get now via DSL or cable or wireless.

If the project will move forward, the communities will have to form a Joint Powers Board and seed it with some start-up funds. The next steps will be to do a pre-subscription campaign to get a real sense of how many residents would take service from a new network. Responses are non-binding but will give a better measure of support as well as create an additional sense of responsibility for the project. From Dave Peters:

By the end of February, the 10 governments -- Sibley and Renville counties and the cities of Gaylord, Arlington, Winthrop, Fairfax, Henderson, Gibbon, Green Isle and New Auburn -- will each decide whether they want to create a joint powers board.

The best scenario is that all communities would join. But if one or a few do not, the project may be able to continue as long as some of the remaining communities are willing to take additional risk (which would be rewarded with a higher percentage of net income down the line). As long as the JPA is able to continue, all communities will still be passed by the network and residents able to subscribe. The exception is Sibley County itself; if the County does not join, the project would be hard-pressed to run the fiber out to the farmers...

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Posted May 10, 2010 by christopher

This is a great inside look at how one community built a globally competitive broadband network (probably the best citywide network in the US) and the barriers they faced from incumbent providers Cox and BellSouth.

Terry Huval, the Director of Lafayette Utilities System in Louisiana, spoke to the U.S. Senate Committee on Small Businesses Entrepreneurship on April 27, 2010, on the topic of: "Connecting Main Street to the World: Federal Efforts to Expand Small Business Internet Access." Huval's full testimony is available here.

Huval's presentation told the back story of LUS Fiber, focusing on the barriers to publicly owned networks in Louisiana.

The FCC National Broadband Plan, on page 153, includes Louisiana as one of 18 states that “have passed laws to restrict or explicitly prohibit municipalities from offering broadband services.” While the Louisiana law did not prohibit Lafayette from providing broadband services, its mere presence provided, and continues to provide, a fertile playground for BellSouth (and its successor AT&T), Cox and their allies to create mischief, resulting in discouraging local governments from stepping in to provide these services even when the private telecom companies refuse to do so.

Louisiana, as with many other states including North Carolina, has powerful incumbents that claim there is an "unlevel playing field" and that local governments have too many advantages in building broadband networks (incomprehensibly, they simultaneously claim that local governments are incompetent and publicly owned networks always fail). But state legislators - who hear constantly from the lobbyists of these wealthy companies, have passed laws to discourage publicly owned networks.

Huval details just some of the disadvantages the public sector faces in comparison with the private sector (we detail many other disadvantages in our "Breaking the Broadband Monopoly report).

For example, while Cox Communications...

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Posted May 7, 2010 by christopher

Time Warner, AT&T, and other incumbents have radically changed their strategy to prevent broadband competition in North Carolina via new restrictions that are being debated in the Legislature currently. This switch in strategy offers more proof that they stand on no principle aside from protecting their monopoly.

The famous HB 1252 in North Carolina is back... but different. In the past, the telcos and cablecos have argued that municipal broadband networks are unfair to them because the city could use tax dollars in some way to build the network (ignoring that most publicly owned networks do not use any tax dollars). Now, these companies are pushing a bill to require financing backed by taxpayer dollars. Seems like an odd switcheroo.

As one might expect from companies like AT&T and Time Warner, who have no respect for the public process, the bill was kept top secret until debated in committee, giving only the side filled with monied interests and lawyers an opportunity to prepare. The bill (that we have made available here as there is no official version yet) would not just place significant restrictions on new publicly owned networks, but would also handcuff existing networks like Salisbury and Greenlight in Wilson.

To reiterate, this bill will damage the most advanced broadband networks available in North Carolina today. Sounds like North Carolina wants to take up Mayor Joey Durel in Lafayette on his offer to welcome the businesses moving from North Carolina to Lafayette with a big pot of gumbo.

Fascinating that after an FCC Commissioner noted that the US Broadband Plan recognizes the right for communities to build their own broadband infrastructure, North Carolina is deciding it prefers to preclude any broadband competition, sticking with its last-century DSL and cable. Just fascinating.

The Salisbury Post has been watching and recently published a scathing editorial against the bill. This is one paragraph, but the whole editorial is well worth reading.

Yet, if the HB 1252's intent becomes reality, such areas will be severely hobbled in their near-term ability to tap into the broadband revolution. Private...

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Posted April 26, 2010 by christopher

After focusing on the North Carolina battle at the Legislature (regarding whether cities should be allowed to choose to build their own broadband networks or if they should solely have to beg the private sector for investment), I wanted to check in on Salisbury, which is building a FTTH network.

Salisbury has persevered through many obstacles, including finding financing for the project in the midst of the worst economic downturn since the Depression. They will begin serving customers this August.

After choosing the name "Fibrant" as the name of the network, they have established a slick web presence at fibrant.com. The site has a a blog, but is rarely updated currently.

Earlier in the month, the local paper discussed the ways in which the fiber network will aid public safety. The short answer is video, video, video.

Video can be used for security cameras (both in public places and in private homes) as well as to give officers better situational awareness when they arrive on a scene. But wireless video access is often the key - both so officers can stream video in the cruiser and because wireless video cameras are easier to place (no pesky wires to run) and move around.

Though wireless video is helpful, it creates of a lot of data that is best moved across fast, reliable, wired networks. This is why fiber-optic networks and wireless are better understood as complements than substitutes. A robust fiber architecture greatly eases the problems incurred by creating a wireless network because the wireless nodes will be more efficient if all are tied into a fiber network. Rather than streaming data across the entire city to send a single feed to a cruiser, a local access point will stream it across a smaller footprint.

"They are potentially looking at helmet cams," Doug Paris said, assistant to the city manager. "Those who are sitting outside (the structure) will be able to see what's going on inside."

It would make little sense for the fireman to have wires coming out of their helmets. But that wireless signal from the helmet probably won't propagate to the fire hall or police station. Instead, a wireless access point near the fire can grab the signal and make it available to anyone...

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Posted April 25, 2010 by christopher

Time Warner continues to fight for monopoly protections in North Carolina with legislation to hamstring municipalities, preventing them from building the essential broadband infrastructure they need. While I was in Lafayette at FiberFete, the North Carolina Legislature was considering a bill to preempt local authority, essentially shutting down the prospect for any cable and broadband competition in the state.

Jay Ovittore has covered this legislation in depth.

Salisbury small businessman Brad Walser, owner of Walser Technology Group testified that North Carolina community’s new municipal broadband network Fibrant would meet his company’s needs for broadband capacity not available from commercial providers. Walser noted Salisbury is suffering from an unemployment rate exceeding 14 percent. Advanced broadband, he believes, could help the city attract new businesses that will help create new, high paying jobs. Fibrant is expected to launch later this year.

Folks from Chattanooga also testified about the benefits of publicly owned networks. The public outcry on the issue has been helpful:

All of your e-mails and calls have been getting through to the legislators. This kind of attention makes them nervous and I ask you to continue. I can assure you that we here at Stop the Cap!, along with Communities United for Broadband, Broadband for Everyone NC, and Save North Carolina Broadband are going to ratchet up attention on this issue.

If you live in North Carolina, definitely read the bottom of the post on how to help.

Unfortunately, the state legislature seems to have more nitwits than anyone who knows anything about networks: one State Senator suggested wireless will be replacing fiber soon - one wonders how the wireless tower will connect to the Internet... magic?

North Carolina could become the 19th...

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Posted April 16, 2010 by christopher

Stop the Cap! sounded the alarm that North Carolina is once again considering a bill to prevent competition by effectively banning communities from building their own networks.

The Communities United for Broadband Facebook page notes:

The cable industry will be pushing a bill to stop communities from investing in fiber optic infrastructure on April 21st at 9:30am in Raleigh before the Revenue Laws Committee in room 544 of the Legislative Office Building found at 46 W. Lane St, Raleigh, NC.

This bill is being pushed by the private cable and telephone companies that are threatened by the publicly owned FTTH networks already in Wilson and Salisbury. North Carolina has a number of communities that have been inspired by the Gigabit promise of Google and are considering how they can build their own network if Google does not choose them. This bill will prevent communities from building the infrastructure they need to succeed in the future.

I should note that Craig Settles is working with the Communities United for Broadband folks. They have a great slogan: Picking up Where Google Leaves Off.

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