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Santa Clarita Leases Dark Fiber For Better Connectivity And Revenue

Santa Clarita, a community of 220,000 in Los Angeles County, California, recently signed a dark fiber lease agreement with Southern Californian telecommunications provider Wilcon. The city hopes to improve high-speed Internet access for local businesses; this ten-year contract allows Wilcon to provide services via publicly owned fiber-optic cable originally buried for traffic controls. 

The New Agreement

From the City Council’s June 28th agenda, the new agreement includes the following:

  • Initial anticipated annual revenues of $72,256 based on $840 per year per fiber mile.
  • Annual fiber lease rate adjustment based on [Consumer Price Index] (CPI) for the Los Angeles area.
  • Initial anticipated lease of 86.02 total fiber miles.
  • City maintains control and ownership of all fiber at all times.
  • Lease of dark fiber is not exclusive to Wilcon.
  • City may opt out of the contract without cause after ten (10) years.

Santa Clarita and Wilcon can extend their agreement on identical terms for three consecutive periods of five years following the original ten-year term, leading to a potential contract length of twenty-five years. 

Using Existing Assets To Promote Business Connectivity

The third largest city in Los Angeles County is home to the Six Flags Magic Mountain amusement park, a handful of aerospace engineering firms, several medical equipment manufacturers, and a strong business community. Yet, local industry groups like Santa Clarita Business Journal (SCBJ) identified unaffordable Internet access as a major barrier for local businesses, as highlighted by its May 2015 publication

The City Council recently published its 2020 Goals, which include two Internet-specific objectives:

  • Work with the Economic Development Council (EDC) to provide recommendations and strategies on how to ensure high-speed Internet access to business parks.
  • Establish a revenue-generating program that utilizes existing infrastructure to leverage resources and potentially promote greater bandwidth access to the community. 

The lease agreement with Wilcon will move Santa Clarita toward achieving those goals. Although the lease will connect several business parks and individual businesses already located on the existing network, it will open the door for Wilcon or another Internet service provider (ISP) to expand the network to serve even more Santa Clarita businesses. 

Crosstown Traffic Lends a Hand

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As communities like Winston-Salem, North Carolina, and Kane County, Illinois, have shown, extra fiber cables already laid for traffic controls can act as the foundation for better local Internet access. We’ve also written about the city of Aurora, Illinois, received a $12 million grant from the Federal Highway Administration to construct 60 traffic signals. The city has now extended its network to schools, businesses, hospitals, and other community anchor institutions. 

Santa Clarita initially laid 96 strands of fiber to manage traffic signals and cameras starting in 2002, planning ahead for future growth. The City shared the initial expense of the $3.4 million infrastructure project with the Metro Transit Authority. Since then, Santa Clarita has incrementally expanded the network to over 70 miles, using state and federal grants to fund the expansions. Traffic operations take up less than one-third of the network's full capacity. For about four years now, the city has eliminated the cost of leased lines by using its fiber-optic network to interconnect its municipal facilities.

Freedom Dark Fiber Networks was the first private dark fiber provider to work with the city. Freedom used the network to provide services to a number of entities, including the Los Angeles Department of Water and Power, Southern California Edison, AT&T, and Verizon. The company leased small portions of city-owned fiber on a short-term basis to fill in gaps on its network. In 2013, Wilcon acquired Freedom Dark Fiber Networks. At that point, both the city and Wilcon decided it was time to renegotiate.

Dark Fiber = Bright Future

Even with up to eight strands dedicated to Wilcon’s network, about 50 percent of the city’s fiber remains unlit. Now it finds itself with a new revenue stream estimated at more than $700,000 over the course of the next ten years, thanks to its contract with Wilcon. In addition to reducing the cost of maintaining connectivity for its municipal facilities, Santa Clarita is providing an environment where businesses can get the fast, affordable, reliable, connectivity they need.

Community Connections - Jason Hardebeck, Baltimore

Residents and businesses in Baltimore have been dealing with poor access for years. In 2015 the city's mayor, Stephanie Rawlings-Blake named a 27-member task force to address the problem and has spoken out about the need for more investment.

In this episode of Community Connections, Christopher Mitchell caught up with Broadband Coordinator Jason Hardebeck to talk about about his city's challenges and opportunities.

Hardebeck is tasked with developing a strategy that puts his city's residents and businesses first. These challenges are familiar to many cities across the United States and this interview serves as a good illustration of why owning some conduit and dark fiber can be a big benefit to cities as they try to solve the problem of the digital divide. 

 

CityLink Telecommunications in Albuquerque Prefers Open Access - Community Broadband Bits Podcast 208

A small telecommunications company in Albuquerque embodies much of the philosophy that has powered the Internet. And CityLink Telecommunications President John Brown credits Vint Cerf for some of that inspiration.

John Brown joins us for episode 208 of the Community Broadband Bits podcast, where we talk not just about how enthusiastic he is for open access, but how he writes open access requirements into contracts to ensure CityLink would continue to operate on an open access basis even if he were struck down by an errant backhoe.

We also discuss the Internet of Things and security before finishing with a discussion of how he thinks the city of Albuquerque should move forward with his firm to save money and improve Internet access across the community. We also touch on Santa Fe's decision to work with a different company in building their short spur to bypass a CenturyLink bottleneck.

Read the transcript from this show here.

We want your feedback and suggestions for the show-please e-mail us or leave a comment below.

This show is 36 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed.

You can download this mp3 file directly from here. Listen to other episodes here or view all episodes in our index.

Thanks to Forget the Whale for the music, licensed using Creative Commons. The song is "I Know Where You've Been."

Dark Fiber Available In Lewiston But Rivers Slow Expansion

The Port of Lewiston’s dark fiber network is up and running and now has connected a commercial customer, reports 4-Traders, but achieving the maximum reach has hit some resistance.

Warehousing and distribution company Inland 465, is operating a 150,000 square-foot warehouse and obtaining Internet access from First Step Internet, which leases dark fiber from the Port of Lewiston’s network. Community leaders hope this is the first of many commercial customers.

Last summer the community announced that they intended to deploy an open access dark fiber network to spur economic development opportunities. The network plan called for a connection to nearby Port of Whitman’s fiber network, which has operated for more than a decade.

Bumps On Bridges

According to 4-Traders, the Port of Lewiston is encountering issues deploying over the optimal route for expanding to serve more commercial clients. The community is near the Clearwater and Snake Rivers and must cross bridges en route to connect with nearby networks in the ports of Whitman County and Clarkston. Both communities have their own fiber networks and would like to connect to Lewiston’s new infrastructure. The collaborations would allow a larger loop and better redundancy for all three networks.

The Port of Whitman has an agreement with Cable One to use the provider's hangers on the bridge across the Clearwater River. In exchange, Cable One is allowed to access certain Port of Whitman County conduit on a different bridge. The state of Idaho issued the permit to Cable One to allow them to install the hangers and now the Port of Whitman County is applying to the state to have those same permits issued in its name. Once the Port of Whitman County has the permits, the Port of Lewiston will be able to use the hangers to connect to the Port of Whitman County network.

CenturyLink's Conduit...Or Is It?

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In order to achieve the maximum reach, Port of Lewiston officials and Port of Clarkston officials will have to contend with a less-than-eager CenturyLink. There is ample conduit space on the Southway Bridge that crosses the Snake River, but the incumbent provider controls all of it. The 20 conduits on the bridge are legacies from the time when it was part of AT&T. 

Clarkston Port Manager Wanda Keefer told 4-Traders that CenturyLink is only using five of the 20 conduits and the Port of Lewiston would like to take advantage of that empty space to link up to the Port of Clarkston’s fiber-optic network. Before they can do that, however, they have to learn more about CenturyLink’s rights to be on the bridge and where on the bridge any potential ownership may end. In order to obtain that information, the Port of Clarkson filed a Freedom of Information Act with the bridge builder, the U.S. Army Corps of Engineers. 

The Wires Have To Go Somewhere

The situation in Idaho underscores the importance of access to rights-of-way and fiber routes, be it bridge, boulevard, or pole. New York State, filled with bridges and opportunities to host dark fiber over waterways, has its own Bridge Authority that deals with such issues. In Minneapolis, the Park and Rec Board are stalling deployment of a Fiber-to-the-Home (FTTH) network as a local ISP seeks to bury conduit in boulevards that are off limits due to protective agency policy.

Occasionally, incumbents take advantage of pole ownership or dispute pole position to delay municipal networks as a sabotage strategy. Frontier did as much in Lake County, Minnesota.

According to Clarkston's Keefer, however, there are agreements in place that all the ports consider priority. Port of Lewiston and Port of Clarkston have set a September 1st target date for having the connections linked and communicating.

Kane County's Fiber Is Open For Business In Illinois

Kane County, Illinois, is hoping its fiber-optic network will attract more businesses looking for better connectivity. As it turns out, they've had the resources for some time but are now making more of an effort to market the benefits of their publicly owned network.

Sharing The Savings, Services, Speeds

In 2011, reports the Chicago Tribune, the county took advantage of road reconstruction and in a coordinated effort, Kane County and the Kane County Department of Transportation deployed fiber along one of its main thoroughfares, Randall Road. Since then, the county has expanded the network to approximately 47 miles, connecting county facilities in five area cities. Kane County contributed $1.5 million to the construction of the underground network that now offers 10 Gigabits per second (Gbps) capacity.

Since eliminating leased lines, institutions and facilities connected to the network have reported better performance, improved services, and significant savings. For example, Geneva School District 304 needed higher capacity to comply with new state requirements:

The district was paying $9.15 per megabyte for 500 megabytes, which amounted to $54,900 a month, he said.

The district was able get 1,000 megabytes for $24,000 per year through a provider on Kane County's fiber optic network — receiving double the service at half the cost, he said. [emphasis ours]

"From our perspective, it was a win-win," [County CIO Roger] Fahnestock said. "The reseller is working with them and are able to work with them and get this off the ground and get the school district what they needed."

The County hopes to draw in more economic development and increase competition. There are already several companies that take advantage of existing fiber to offer varying services, including connectivity for academic research, colocation and cloud storage, healthcare, and at least one provider that uses the network to provide backhaul in order to offer fixed wireless Internet access to residents and businesses. 

In order to promote the network, the county recently launched a new website that allows interested entities a way to find information.

The Aurora Neighbor

Kane County’s fiber connects with the OnLight Aurora network. Much like the Kane County network, Aurora’s fiber deployment served a dual purpose - better connectivity and traffic control. In Aurora, the city had deployed some fiber on their own, which helped secure federal funding for traffic control. They were able to use that funding to eliminate the debt on their existing network and speed along the process of connecting more entities and upgrade the existing network.

FTTH In The Future?

None of the current partners are providing Fiber-to-the-Home (FTTH) service but in the new website’s About Us section, officials address the benefits of FTTH and acknowledge it as the gold standard. At a Kane County Leaders Summit, Chairman Chris Lauzen expressed the hopes Kane County leaders have for the network:

"We intend to light up Kane County in the most positive way."

Sandpoint Sends Out RFP : Responses Due June 16

Sandpoint, Idaho, located in the state’s panhandle, is likely to host Ting’s Internet service over publicly owned Fiber-to-the-Home (FTTH) infrastructure. All that remains is for the service provider to determine that the demand exists in the anticipated service area of approximately 9,700 people. In addition to residents and businesses in Sandpoint, properties in nearby Dover, Ponderay, and Kootenai are anticipated potential subscribers.

Sandpoint, Idaho

Approximately 7,500 people live in the city, which is the Bonner County Seat. The community is popular as a ski resort town and is located on Lake Pend Oreille. In addition to tourism, the manufacturing, aerospace, software, and healthcare industries are important employers in Sandpoint. It covers approximately 4.8 square miles and, five years ago, was named “most Beautiful Small Town” by Rand McNally and USA Today.

Seeking Assistance Moving Forward

The city has recently issued a Request for Proposals (RFP) to find a firm to propose a plan to make the best use of their existing dark fiber network. According to the RFP, Sandpoint is looking for consultants to help them engage in conversations with stakeholders and providers, determine the city’s assets, use their assets for maximum economic development, and a variety of other tasks.

Sandpoint has had an existing conduit system in place for some time but, according to the RFP, has not been “proofed” and may not be suitable for larger cables. The city also has an underground fiber backbone and is in the process of installing more fiber-optic cable.

Bonner County also owns conduit within Sandpoint that can be accessed as part of the town’s project. The RFP describes more conduit in and around the city and Sandpoint’s preliminary plans to use it to improve local connectivity.

Important dates:

  • Vendor Questions (if any) Due : June 2, 2016 
  • Answers to RFP Questions Released : June 6, 2016 
  • Proposal Responses Due : June 16, 2016 

For details, check out the RFP on the Sandpoint website.

Idaho Falls Thinks Ahead With Circa Network

Businesses in Idaho Falls have access to the city’s municipal fiber network, Circa, but now the city council is considering how to bring better connectivity to residents.

How Best To Use What We Have

In order to get a better idea of what options are available and the costs of each, in 2015 city leaders engaged two consulting firms to evaluate a citywide Fiber-to-the-Home (FTTH) option, an open access network option, how commercial providers may step up to better serve the city, or the city taking on the role as Internet Service Provider (ISP). They are now beginning to evaluate those results.

Private providers have leased Circa dark fibers for years to connect local businesses and businesses themselves have worked directly with Idaho Falls Power, the entity that manages the network. “We have enjoyed a successful public/private partnership in our fiber optic enterprise for well over a decade,” said Jackie Flowers, General Manager, in a recent Local 8 News article.

Nevertheless, city leaders are keeping their eye on tomorrow. From another Local 8 News article:

"We're tripling our broadband needs every few years," said Jackie Flowers, the general manager of Idaho Falls Power that manages the network. "That exponential growth, for us to be thinking about the long term, how are we going to meet those needs?"

Seven ISPs are now using the network to serve approximately 400 businesses in Idaho Falls. The publicly owned infrastructure provides voice, video, and data with Gigabit per second capacity. The city began developing the network in 2002 and began serving customers in 2007 via more than 170 miles of fiber-optic cable throughout the city. In addition to saving the community by reducing telecommunications costs, the network has generated revenue.

City leaders in Idaho Falls are conscious of the value of the asset they have now and smart to consider the future. As they did in 2002, they are looking ahead so they don’t have to play catch-up later on. Consultants put early estimates for a citywide expansion and upgrade at approximately $60 million but:

Many in the City Council agreed that while the initial price is steep, they worry more about what they would loose if they didn't act and didn't prepare for the future. 

"One of the responsibilities of the city council is not to just sit where we are and do status quo," said Ed Marohn, an Idaho Falls city council member. "We have to look at the future for the city. What we envision 20 or 30 years down the road." 

City Council members and representatives from Idaho Falls Public Power agreed to do more research over the summer and aim for public input this fall before taking the next step.

Idaho Falls

The city is the largest in eastern Idaho, with a population of 57,000 within the Idaho Falls-Blackfoot metropolitan area of approximately 136,000. The city is the county seat of Bonneville County and the center of activity in western Wyoming as well as eastern Idaho. Located on the Snake River, Idaho Falls maintains an extensive Green Belt through the center of its 22 square miles. It’s often on various “best places to live” lists with low crime rates, a vibrant art community, and extensive outdoor recreation.

Certainly, a fast, affordable, reliable FTTH network would keep Idaho Falls on those lists and maybe bump it up a notch or two.

Local coverage:

Lakeland Considering Its Next Step In Florida

In August 2013, we reported on Lakeland, Florida’s dark fiber network that serves local schools, government facilities, and local businesses. Over the past year or so, community leaders have discussed whether or not to expand the use of Lakeland’s fiber resources.

A 2015 feasibility study suggested several other ways to use Lakeland’s existing 330 miles of fiber infrastructure to enhance connectivity for economic development and residential access. As the city examines its finances and its future in the coming months, city leaders are considering six avenues to meet the community’s needs. The options, some recommended by consultants, vary in type and investment and the City Commission will begin discussing the possibilities as they meet in the upcoming months.

Leaders Consider The Next Move

Lakeland is examining public policies that will encourage better connectivity, such as dig-once, permitting changes, and right-of-way regulations. With smart policies in place, Lakeland can lay the groundwork so they can build off progress made today.

In 2013, Polk Vision, a group of organizations, businesses, government, and individuals, along with the Central Florida Regional Planning Council developed the Polk County Broadband Plan. Another option is using the Plan as a guidepost and aligning Lakeland’s plan to support the goals set in the Polk County Plan. Connecting the schools to a larger network would be part of that plan.

Lakeland, like many other communities wants to give providers operating in the community today the opportunity to work with them to improve services. Another option the city will pursue is reaching out to providers in Lakeland and engaging in discussions to upgrade or expand services to better meet the needs of the community. (We haven't seen much success when communities pursue large incumbents, but smaller local providers are sometimes more willing to work with communities.)

SurfLakeland, the city’s free Wi-Fi service that is available in limited areas downtown, in parks, and at municipal facilities, could be expanded. According to Terry Brigman, Lakeland’s CIO and Director of IT, whatever course city leaders choose, the equipment for the free service is due for an upgrade. SurfLakeland has been available for approximately ten years.

Another possible move will be a pilot project to determine how a larger network might do in Lakeland. Pilot projects are becoming more common as a way to test the waters and can help prove that potential subscribers are willing to switch from traditional providers to a new venture. We’ve reported on a growing number of pilot projects in recent years, including Westfield, Massachusetts; Sun Prairie, Wisconsin; and Owensboro, Kentucky.

The City Commission will also consider releasing a Request for Information (RFI) to seek out a partner to develop a plan to improve connectivity in Lakeland with infrastructure deployment. 

A Hard Look At The Numbers

Community leaders in Lakeland reviewed the study and are discussing several recommendations. The consulting firm also suggested using city fiber resources as a basis for a more extensive network and that the city branch out to launch as an open access provider, or a retail services provider to businesses in select areas. Another option is to offer Fiber-to-the-Home (FTTH) services to every property within the city limits or within the Lakeland Electric service territory. The authors of the study estimated an FTTH in Lakeland would cost from $220 - $270 million if it's built out over the Lakeland Electric service area and would pay for itself in six to seven years.

In March, the City’s Chief Financial Officer gave his opinion about a potential FTTH project. In his opinion, the consultant's recommendation is too risky because “margins of error are too thin” based on the study’s authors' predictions of a 40 percent take rate.

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The financing, calculated on 20-year bonds, required price increases of 1.5 percent every year.

He went on to say, however, that he did not think the city should abandon the idea of finding a way to bring better connectivity to Lakeland, but that, “I'm simply saying the model we were presented that involved the city purchasing, managing (and) maintaining a broadband system is not feasible."

Support, Adversity Still Alive

Earlier this month, the Ledger reported that Commissioners discussing the issue said that, if the results of the financial analysis and risk assessment still due from the consultants are favorable, they will consider creating a publicly owned and operated Internet utility. Out of seven Commissioners attending the meeting, five expressed support.

A grassroots citizens' initiative, Gigabit Lakeland, has also sprung up in the community and encourages citizens to sign an online petition. They want community leaders to use of the existing publicly owned fiber to bring more choice to Lakeland. Currently, there is a small amount of Verizon FiOS and Bright House Networks cable Internet access (which is now owned by Charter Communications).

While residents have expressed support for taking action, economic development and better business connectivity is on everyone’s mind. In March, the Ledger reported (reprinted at GovTech) on a meeting of the Downtown Lakeland Partnership, a group of business leaders:

Ellen Simms, the co-owner of Two Hens and a Hound, said that for a decade her connection has fizzled out when it rains and she can't get the provider to fix it. 

Kate Lake, who hosted the meeting with [Lakeland CIO Terry] Brigman at her business, My Office & More, said the dedicated fiber optics line she pays for at her shared office for hire "is killing me." 

"I'm paying through the teeth." 

Brigman pointed out at the meeting that the Lakeland-Winter Haven metropolitan area was determined to be the seventh worst served area in the country, according to Polk Vision. "We don't have what we need," he said. "We don't have what we need to compete with our neighbors." 

As expected, the incumbent providers have expressed concern, warned of repercussions, and attended meetings but still chosen not to invest in the infrastructure Lakeland needs. Elected officials in Lakeland appear open minded to discussion but don’t have the patience to be put on an endless waiting list if owning their own network or working with a trusted partner is a possibility. From an October article in the Ledger:

"The demand for data services is growing exponentially and it will grow in our homes and grow in our businesses when we have access to it. That we don't have access to it is the limiting factor," not a lack of demand, [Commissioner Jim Malless] said.

He said the commission owes it to the "incumbent services," Bright House Networks and Verizon, to get their points of view and find out what plans they have for upgrading their services in Lakeland.

"To me, they can provide that service tomorrow. They choose not to, and if it's economics to them, we have to get over the hurdle for the economics for us," Malless said. "I'd really like to hear why you don't provide the service."

 

Dark Fiber For The Future In Caswell County Schools, NC

Caswell County School Board members recently voted to take a long-term approach to student connectivity in North Carolina.

Ten Years Was A Lifetime Ago

Earlier this month, the issue of Internet access for the schools came before the Board because a lease with the telecommunications company connecting school buildings is about to end. Since the inception of the 10-year agreement, computer and Internet use in schools has skyrocketed; Caswell County Schools now aim to have every child on a computer at school. The district is now served by satellite Internet access to school facilities and in order to supply the speed and reliability they need, the Chief Technology Officer David Useche recommended a fiber-optic network to the Board.

Lease vs. Own

Useche offered two possibilities: 1. lease a lit network, which costs less in the first years of the contract but will not belong to the school district; or 2. pay more for the first five years to have a dark fiber-optic network constructed. The dark fiber network infrastructure will belong to the school district. Caswell County will use E-Rate to help fund the construction of the network, which will result in an overall long-term savings of $35,000. Useche told the Board:

“If we look at the projections for the Lit network, in ten years after E-Rate our cost is going to be $214,255. With the Dark network the cost is $178,729. The difference is a savings of $35,000,” said Useche, who added that the district will use $751,000 in E-rate funds to help build the network. Useche said that the State of North Carolina is using E-rate funds to build networks in some of its rural areas. “If we didn’t have E-Rate funds we could not afford either of these options. We are lucky to have them to provide the services the schools need.”

The Board agreed with Useche’s recommendation to approve the dark fiber option. The agreement will include 10 Gigabit per second (Gbps) connectivity for less than $100 per month more than 1 Gbps connectivity. “It’s not like we need ten gigabits right away but pretty soon we will need that much bandwidth,” said Useche.

Dark Fiber Network Brightens Prospects In Valpo, Indiana

Valparaiso, Indiana, is investing in dark fiber to stimulate economic development; it is deploying ValpoNet, a dark fiber network to serve local businesses and institutions.

The city of approximately 32,000 people is a little over an hour southeast of Chicago and home to Valparaiso University, Purdue University North Central, Indiana Vocational Technical College, and several other colleges. The community also has a large manufacturing base and a number of hospitals and medical clinics, so there is an ample supply of entities with IT departments with the requisite knowledge to use a dark fiber network.

If At First You Don't Find Fiber...

In 2010, a regional economic development organization developed a report that identified the lack of fiber in "Valpo" and Porter County but no project developed. The city moved on to other things until 2014. A situation with a large financial information company in town breathed new life into the idea of municipally owned fiber. The company wanted to expand its facility and wanted to be sure it could access better connectivity. Several years earlier, there had been an ice storm at one of the company's home offices and, while they thought they had redundancy from the incumbents, such was not the case. They lost connectivity for days and from that point on, whenever they opened new offices, expanded, or relocated, redundancy was always a top priority. 

Valpo's Redevelopment Commission decided to hire a consultant to draft a feasibility study. He determined that a dark fiber network was not only possible, but needed. The study revealed that other companies suffered from poor reliability and considered affordability another pressing issue. 

The Commission, working with Economic Development Director Patrick Lyp, reached out to entities in Valpo and found that the university and healthcare facilities were also interested in the promise of better reliability via fiber-optic connections. Valparaiso University and two large regional hospitals, including St. Mary's, expressed their desire to participate. Local officials approached large companies directly and, while several indicated that contracts with incumbents must be fulfilled before making a switch, every local business they approached confirmed that they want ValpoNet.

Location, Location, Location

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As it turns out, the geography of Lake Michigan's southern tip pushes a number of transcontinental fiber lines south near Valparaiso; there are also splice points nearby which contribute to the plan. The city will deploy a dark fiber loop down into Valpo that will then circle back up to the big pipe about 10 miles north of the city. There will also be a redundant loop to ensure uninterrupted connectivity. With the exception of a few areas where the fiber requires aerial placement, the network will be entirely underground, which will help protect it from the elements.

Valpo has no plans to offer FTTH service for residents or businesses or to offer any other lit services. Their plan is to entice both large and small ISPs to provide service over the new infrastructure and are actively seeking providers even before construction begins. Like a number of other ex-urban communities near major metro regions, Valpo has one cable provider (Comcast) and one DSL provider (Frontier). There is also a local provider called Nitco that provides DSL, wireless, and some limited fiber services.

Prices in Valparaiso are higher than in the Chicago area and, according to Lyp, tend to drop as one approaches the metro. Community leaders hope this project will encourage competition and lower rates in the area.

City Savings Ahead

The municipal facilities have always been served by the incumbents because the city owns no telecommunications infrastructure. Serving municipal facilities is not part of the dark fiber network phase 1 plan, but Lyp anticipates it will likely be part of a future phase. As they develop the network, planners are considering ways to include fiber accessibility for city buildings and local schools. The network design integrates strategic placement where laterals can easily extend to schools, desirable business development areas, and locations within Valpo ripe for economic development.

Financing With Future Dollars

The cost of the backbone fiber network will be approximately $2.39 million; Valparaiso is funding the network with tax increment financing, or TIF. Other fiber projects have been financed with TIF in recent years, particularly in Indiana. TIF allows public financing based on future gains in property or sales tax that are limited to a certain geographic area that will obtain the redevelopment or infrastructure project. Local government can borrow the funds, build the project, then use the funds generated from the project to pay off the debt.

The method is gaining popularity for fiber-optic projects in Indiana, but it has been used for some time on other public infrastructure projects, such as toll roads, bridges, and transit systems. In some states, it has been used for decades while other states are slow to adopt TIF.

The Cost Of Going Dark

In April, the Redevelopment Commission reached out to local businesses with an informational meeting to answer questions and share anticipated connectivity costs. Each customer will pay a one-time installation fee of $500 for all circuits and drops. Monthly fees will be $1,000 for one pair of dark fiber strands to a business customer unless that customer is an Internet Service Provider (ISP) or some other entity that plans to resell use of the fiber. ISPs or similar entities will pay $1,200 per month for one pair of dark fiber. There will also be a monthly charge of $200 for each drop.

Because the network is dark fiber, businesses will still have to pay monthly fees to an ISP for Internet access. The Commission's executive director, Jim Mooney, encouraged attendees to sign a nonbonding letter of interest to help them prioritize 2016-17 construction.

Mooney told business leaders at the meeting that the Commission had signed a contract with a company in March and that construction will begin in July. The network is scheduled to be completed by the end of 2016.

Out Of The Gate Strong

In addition to strong support from local businesses that want to use the dark fiber network, other members of the community understand the benefits a dark fiber network will bring. In August 2015, the Northwest Indiana Times expressed their support for the municipal project:

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Anyone who says government should leave this solely to the private sector is missing a key point — that the private sector hasn't met this need.

Digital infrastructure is as much a part of economic and civic development as a strong, well-designed transportation network. We shouldn't punish this sort of progressive thinking by hanging on to outdated notions of what the government's role might be.

This is the answer to bridging the tech divide that is separating who will be successful from who will not be.

Managing The Network

Valpo offers municipal sewer and water utility service and while the community feels that their staff can eventually maintain the network, they realize that there is a learning curve. They want to be able to offer businesses connectivity managed by experienced professionals on launch so have issued an RFP to find a firm to manage and operate the network.

After working with an outside firm for the first couple of years, Valpo will determine whether or not to continue with a similar model or develop city talent to take over. Valparaiso has no electric utility like many other communities that invest in fiber networks.

Come To The Dark Side

A growing number of communities are now considering dark fiber investment to stimulate economic development and improve local connectivity. Recently, Huntsville, Alabama, announced it will be deploying a citywide dark fiber network on which Google Fiber will deliver retail services. Other communities have been using their dark fiber resources quietly for years with little fanfare; Burbank, California's dark fiber network is saving money and generating revenue.

Dark fiber networks require lower risk while still inspiring better connectivity in the community. Cities like Valparaiso need fast, affordable, reliable connectivity to be able to compete, especially with Chicago nearby. With ValpoNet in place, the city may be able to lure commerce from the Windy City with reliable connectivity, affordable rents, and a high quality of life.

As Valpo Mayor Jon Costas said in February:

"We're looking forward to being the first city in our region to offer municipal dark fiber, which will make us more competitive in attracting new businesses and jobs."

Be sure to check out Community Broadband Bits podcast #199, in which Chris interviews Patrick Lyp about the new ValpoNet.