Tag: "lessons learned"

Posted January 22, 2014 by christopher

To finalize our series on reflections from Seattle and Gigabit Squared, I discuss open access networks and how the requirement that a network directly pay all its costs effectively dooms it in the U.S. Read part one here and part two here. I started this series because I felt that the Gigabit Squared failure in Seattle revealed some important truths that can be glossed over in our rush to expand access to fast, affordable, and reliable Internet connections.

The benefits of public-private-partnerships in these networks have often been overstated while the risks and challenges have been understated. We have seen them work and believe communities should continue to seek them where appropriate, but they should not be rushed into because they are less controversial than other solutions.

Sometimes we have to stop and remember that we will live for decades with the choices we make now. It was true when communities starting building their own electrical networks and is still true today. I hope the series has provided some context of how challenging it can be without removing all hope that we can stop Comcast, AT&T, and others from monopolizing our access to the Internet.

In this final piece, I want to turn to a different form of partnership - the open access network. I think it follows naturally as many in Seattle and other large cities would be more likely to invest in publicly owned fiber networks if they did not have to offer services - that being the most competitive, entreprenuerial, and difficult aspect of modern fiber networks.

Chattanooga construction

The desire to focus on long term investments rather than rapidly evolving services is a natural reaction given the historic role of local governments in long term infrastructure investments. Fiber certainly fits in that description and as many have noted, the comparison to roads is apt. An open access fiber network allows many businesses to reach end users just as roads allow Fedex, UPS, and even the Post Office, to compete on a level playing field.

In an open access approach, the local government would build...

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Posted January 9, 2014 by christopher

This the second in a series of posts exploring lessons learned from the Seattle Gigabit Squared project, which now appears unlikely to be built. The first post is available here and focuses on the benefits massive cable companies already have as well as the limits of conduit and fiber in spurring new competition.

This post focuses on business challenges an entity like Gigabit Squared would face in building the network it envisioned. I am not representing that this is what Gigabit Squared faced but these issues arise with any new provider in that circumstance. I aim to explain why the private sector has not and generally will not provide competition to companies Comcast and Time Warner Cable.

Gigabit Squared planned to deliver voice, television, and Internet access to subscribers. Voice can be a bit of hassle due to the many regulatory requirements and Internet access is comparatively simple. But television, that is a headache. I've been told by some munis that 90% of the problems and difficulties they experience is with television services.

Before you can deliver ESPN, the Family Channel, or Comedy Central, you have to come to agreement with big channel owners like Disney, Viacom, and others. Even massive companies like Comcast have to pay the channel owners more each year despite its over 10 million subscribers, so you can imagine how difficult it can be for a small firm to negotiate these contracts. Some channel owners may only negotiate with a provider after it has a few thousand subscribers - but getting a few thousand subscribers without good content is a challenge.

Many small firms (including most munis) join a buyer cooperative called the National Cable Television Cooperative (NCTC) that has many of the contracts available. But even with that substantial help, building a channel lineup is incredibly difficult and the new competitor will almost certainly be paying more for the same channels as a competitor like Comcast or Time Warner Cable. And some munis, like Lafayette, faced steep barriers in just joining the coop.

FCC Logo

(An...

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Posted January 6, 2014 by christopher

A few weeks ago, a Geekwire interview with outgoing Seattle Mayor Mike McGinn announced that the Gigabit Squared project there was in jeopardy. Gigabit Squared has had difficulty raising all the necessary capital for its project, building Fiber-to-the-Home to several neighborhoods in part by using City owned fiber to reduce the cost of building its trunk lines.

There are a number of important lessons, none of them new, that we should take away from this disappointing news. This is the first of a series of posts on the subject.

But first, some facts. Gigabit Squared is continuing to work on projects in Chicago and Gainsville, Florida. There has been a shake-up at the company among founders and it is not clear what it will do next. Gigabit Squared was not the only vendor responding to Seattle's RFP, just the highest profile one.

Gigabit Squared hoped to raise some $20 million for its Seattle project (for which the website is still live). The original announcement suggested twelve neighborhoods with at least 50,000 households and businesses would be connected. The project is not officially dead, but few have high hopes for it given the change in mayor and many challenges thus far.

The first lesson to draw from this is what we say repeatedly: the broadband market is seriously broken and there is no panacea to fix it. The big cable firms, while beating up on DSL, refuse to compete with each other. They are protected by a moat made up of advantages over potential competitors that includes vast economies of scale allowing them to pay less for advertising, content, and equipment; large existing networks already amortized; vast capacity for predatory pricing by cross-subsidizing from non-competitive areas; and much more.

So if you are an investor with $20 million in cash lying around, why would you ever want to bet against Comcast - especially by investing in an unknown entity that cannot withstand a multi-year price war? You wouldn't and they generally don't. The private sector invests for a return and overbuilding Comcast with fiber almost...

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Posted November 28, 2012 by lgonzalez

As we emphasize time and time again, communities build their own networks because they have to, not because they want to. North Carolina's Fibrant network in Salisbury is no exception and a recent technical headache is a reminder that no network is built without problems developing.

Fortunately, Salisbury's strong reputation for providing great, local customer service is helping as it deals with service interruptions that are the fault of the gear that runs the network. 

According to an Emily Ford article in the Salisbury Post, there have been several outages this month. While some outages are attributed to unreliable access gear, the city is still investigating to determine what other factors continue to cause problems. The network currently serves 2,160 subscribers, with 220 of them being commercial customers.

A November 9th Post article on an earlier outage, noted the problem with faulty equipment. A statement from Fibrant General Manager Mike Jury also attributed the outage to a lack of redundancy, which has since been repaired.

While Zhone has been the access gear supplier, Fibrant is now testing Calix equipment. Calix has long been a favored choice among community networks and has a very solid reputation. This is a reminder to communities of the importance of due diligence in choosing vendors -- make sure to talk to other community networks about their experiences with vendors. All equipment is subject to failure, so a key question should be how quickly different vendors respond with solutions to problems.

This technical problem comes on the heels of political problems as Salisbury has been targeted by Time Warner Cable for attacks. Readers will recall how Time Warner Cable successfully pushed the Legislature to pass H129 in 2011, a bill to neutralize publicly owned networks

Even though there have been recent outages, more people continue to take the service than to drop it. From the Ford article:

The week before the outage, 23 new subscribers signed up.

"Despite the outage, our customer base has grown," [City Manager Doug] Paris said, crediting Fibrant staff's...

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Posted October 4, 2011 by christopher

No matter how much community broadband advocates prepare the community and elected officials for the expected difficulty of building a successful local project, in the midst of the deployment, times are tough.

A local paper in Lafayette claims "LUS Fiber [is] at a crossroads" but starts with an admission that these problems were forecast and expected:

Competitors will pay less for programming than you do, and in turn play hard ball by lowering rates for customers. Good luck keeping up with technological advances, expansion needs and growth costs; it's a risky proposition for a public entity used to maintaining rather than adapting. Your opportunities will be limited because you can't provide services outside the city limits. You'll be criticized for offering programming such as adult movies, and you'll be told you really should be focusing on your core business: running power, water and wastewater plants.

Terry Huval delivered that message in 2000, long before Lafayette committed to building their community fiber network -- a network that delivers some of the fastest speeds in the nation at the lowest rates and has already delivered hundreds of jobs.

Nonetheless, LUS Fiber is behind the take rate goals they had set in the business plan. The expenses are higher than forecast because Lafayette was unfairly denied entry to a coop that secures lowers rates for television contracts for members. The only discernible reason for rejecting Lafayette is that Cox joined the coop after Lafayette committed to building its network. There is little doubt that Cox was influential in denying Lafayette's application, likely increasing LUS Fiber expenses for offering cable channels by more than 20%.

This is just one of the many ways that the telecommunications market is rigged to benefit incumbents at the expense of all of us -- residents and small businesses alike. We will not have real choices in competition until government policy treats telecom like the essential infrastructure it is.

Mike Stagg, a long time supporter of the network is quoted in the article, challenging LUS Fiber to improve its marketing:

Can they do better? Probably so. Part of it is the fact that, just from a mindset standpoint, LUS is a utility and utilities generally do not compete," Stagg said. "I...

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Posted September 19, 2011 by ejames

In the place where “Texas history lives,” the City of Granbury followed a fellow Texas city in delivering a Tropos wifi system that covers all 10 square miles of the city.  Less than a decade ago, Granbury had no functional IT department and after hurdles with a private public partnership, established a functional and successful publicly-owned wireless network.  Initially created to support city functions and mobile police, the network is available to the public, elevating the rural town outside of Fort Worth to the mobile age.

When Granbury hired IT Director Tony Tull in 2003, the technology capabilities of the city were dire: no staff, a budget of $6,000, and only two buildings with access.   Tull quickly brought city and council officials on-board to his ambitious technology plan to deploy wireless WAN to all city buildings in partnership with their existing ISP, Texas-based Frontier Broadband (now acquired by KeyOn).  The initial needs were to equip city personnel with mobile access which focused on police officers, firefighters, and city inspectors.

Other goals included general public and tourist broadband access, reading utility meters, perform live web casts, and connect to nearby governmental networks.   After the City received a Homeland Security grant, $70,000 was earmarked to outfit over 10 police vehicles with wireless laptops.  In 2004 Tull attended the Public Technology Institute’s National Summit for Local Governments in Corpus Christi where he reviewed the city’s 147 square mile wireless network by Tropos.  Convinced the technology was right, Granbury deployed a test run of 40 routers across half the city and eventually 100 more to cover the roughly 10 square miles.

The initial returns on investment came eight months after launch when the police department returned $78,000 in budgeted police salary overtime.  The department later reduced its 2005 budget by $100,000.  The City has also saved time and money with the network reading digital meters, assisting building inspectors and providing cheaper connections to municipal buildings.  The total start-up costs were $325,000 which included acquisition costs, infrastructure, and the Tropos price of $68,000 for each square mile of the network.  City departments continue to streamline with the system and since 2007 public users have been accessing the network for $5.95 daily or...

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Posted September 14, 2011 by christopher

Chattanooga, with the nation's fastest citywide broadband network, offers lessons to many other communities who have built or are building their own networks. Chattanooga is regarded as one of the most successful muni networks in terms of a smooth operation with good advertising and a great back office approach.

They are documenting (with video) the stories of both residents and businesses that have switched to their services from incumbents like AT&T and Comcast (two of the most powerful companies in the US). Below, we include two of our favorites in the series.

This should be an extremely effective form of advertising for community networks -- harnessing the enthusiasm and local attributes of the network. Making these videos available on sharing sites like Vimeo or YouTube allows supporters to embed them in their blogs and share with friends and family.

Quite frankly, these testimonials are not hard to do (hire a local videographer that has experience with lighting and recording good sound) and should be one of the first approaches used by community networks to spread the word. If local thought leaders and small business owners can participate, so much the better.

Wired West has also created a video composed of interviews with people discussing the need for better broadband. These videos are compelling - I hope we see more of them from more communities.

Pasha Coffee & Tea On Why They Switched To EPB from EPB Fiber Optics on Vimeo.

Posted September 9, 2011 by christopher

After more than a year of expecting Citibank to file suit against Burlington, they finally did. Burlington Telecom, a muni FTTH network, now illustrates the worst case scenario for muni broadband. After the founder of the network left following disagreements with the Mayor, the Mayor's Administration ran the network into the ground (leading us to recently publish the report "Learning from Burlington Telecom: Some Lessons for Community Networks."

Burlington had financed its network with a municipal capital lease, rather than the more commonly used revenue bonds, meaning that the actual network secures the loan. In this arrangement, the network is technically owned by the lender (Citi) and Burlington leased it. So when Burlington decided to stop paying the lease for the network, it became Citi's problem.

And Citi had a lot of problems due to the games massive banks were playing having killed the economy. BT became just one more non-performing asset. They did nothing while the City continued to run the network without making lease payments. Now Citi is suing for the world (this is how these things work) but it isn't clear that Citi can actually get what it demands (the State has a say in whether the network simply gets shut down, which Citi is presently asking for). And if the network did get shut down, Citi would be in a worse position to recover any of its losses because the value of the network is far greater than the sum of its parts.

State law says that losses from a public telecom venture cannot be carried by taxpayers, which is where we return to an interesting document prepared by the Mayor's Administration. As reported by Blurt:

In its lawsuit, Citibank notes that a letter written by attorney Joe McNeil on behalf of Burlington "expressly warranted to Citibank that at least 40 percent of Burlington's revenues were derived from sources other than taxpayers' funds and would be available to fund payments to Citibank, and further, that Burlington had the financial resources and ability to make all payments to Citibank for the full...

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Posted August 18, 2011 by christopher

In little more than a year, Burlington Telecom went from being a hopeful star of the community fiber network movement to an albatross around its neck. The controversies surrounding it have encouraged cable and telephone companies to use it as Exhibit A in their case against communities going into the telecommunications business. However, most of those criticizing Burlington Telecom have very little understanding of what went wrong and how it happened. Examining what actually happened helps to explain how these problems may be avoided, as the vast majority of existing community networks have already done.

[Download the full report]

In 2007, ILSR issued a case study on Burlington Telecom. The report argued that Burlington Telecom was a model for how communities could build their own next‐generation fiber‐to-the‐home broadband networks.

This report revisits and updates that report, analyzes Burlington Telecom’s situation (for better and for worse), and extracts useful lessons for other communities pursuing community fiber networks.

In preparation for this report, ILSR examined many documents, including those available due to the investigation of Vermont’s Department of Public Service. We interviewed many people from Burlington, including former BT employees, citizens active around the project, and City Council members. We discussed Burlington’s situation with a number of others intimately involved in community broadband networks around the country and posed questions directly to a representative of BT.

This report catalogs many of the problems Burlington Telecom encountered as well as potential solutions for other communities may have to deal with them. It also discusses some of the benefits from Burlington Telecom in order to offer a complete picture of BT's contribution to the community. This is the most comprehensive discussion of Burlington Telecom available.

Posted June 30, 2011 by christopher

We occasionally see big cable and phone companies getting creative in their efforts to shut down community networks. In socially conservative communities, restrictions on providing adult content is a common approach.

This technique came up several times in North Carolina, where TWC-sponsored elected officials proposed disallowing public providers from offering the same adult content channels that private providers offer. The reason has nothing to do with morals, but rather with the substantial revenue adult content generates. Incumbent providers know that if community networks cannot offer adult content to those who wish to purchase it, they will be deprived a significant source of revenue needed to pay the debt from building a modern network.

Bear in mind that no one is forced to see this content or even a scrambled channel (as was common in the "old" days). Community networks allow each family to decide for themselves what content is appropriate -- to the extent community networks differ from private providers in this regard, they provide more tools to filter out content that some may find inappropriate.

Last week, the Louisiana House briefly considered a bill to limit Lafayette's authority to make adult content available to subscribers that request it. House Bill 142 exists solely to put LUS Fiber, an impressive muni FTTH network, at a disadvantage.

John at Lafayette Pro Fiber has excellent coverage of the situation, with both an initial post featuring eyes-a-rollin' as well as an in depth followup "Lafayette delegation kills anti-LUS bill."

LUS Fiber Logo

The latter is essential reading for those new to understanding how any legislature works. And anyone building a network that will compete with big companies like AT&T, Cox, Time Warner Cable, et al. had better know how legislatures work because those companies live in the Leg. Their...

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