Tag: "cable"

Posted October 13, 2009 by Christopher Mitchell

Not too far away from Chattanooga, Tennessee, (home to the largest muni fiber network in the U.S.) lies Cleveland (Tennessee). Five prominent residents asked why they cannot get broadband:

The homeowners have discussed the problem with Charter Communications Director of Government Relations Nick Pavlis three times.

Pavlis said in a telephone interview it would cost the cable company $130,000 to run an underground cable 2 1/2 miles and “it’s just not a reasonable payback.”

He said the company spends $500 per house as a general rule, which gives them a 36-48 month return on investment.

Yet Charter has no problem lobbying the states to prohibit publicly owned networks. Tennessee probably has more fiber-to-the-home initiatives than any other state - perhaps it is time Cleveland looked into their own or cajoling a nearby network into expanding.

Posted July 27, 2009 by Christopher Mitchell

After winning the election, the Obama Administration announced that broadband networks would be a priority. True to its word, the stimulus package included $7.2 billion to expand networks throughout the United States. A key question was how that money would be spent: Would the public interest prevail, or would we continue having a handful of private companies maximizing profits at the expense of communities?

Creating the Broadband Stimulus Language

The debate began in Congress as the House and Senate drafted broadband plans as part of the American Recovery and Reinvestment Act

The House language on eligibility for stimulus grants made little distinction between global, private entities and local public or non-profit entities.

the term `eligible entity' means--

(A) a provider of wireless voice service, advanced wireless broadband service, basic broadband service, or advanced broadband service, including a satellite carrier that provides any such service;
(B) a State or unit of local government, or agency or instrumentality thereof, that is or intends to be a provider of any such service; and
(C) any other entity, including construction companies, tower companies, backhaul companies, or other service providers, that the NTIA authorizes by rule to participate in the programs under this section, if such other entity is required to provide access to the supported infrastructure on a neutral, reasonable basis to maximize use;

The Senate language clearly preferred non-profit or public ownership.

To be eligible for a grant under the program an applicant shall—

(A) be a State or political subdivision thereof, a nonprofit foundation, corporation, institution or association, Indian tribe, Native Hawaiian organization, or other non-governmental entity in partnership with a State or political subdivision thereof, Indian tribe, or Native Hawaiian organization if the Assistant Secretary determines the partnership consistent with the purposes this section

The final language, adopted by the Conference Committee and passed by both houses in February was a compromise. It favored a public or non-profit corporation but allowed a private company to be eligible only if the Assistant Secretary of the Department of Commerce found that to be in the public interest. In the final law an eligible...

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Posted June 11, 2009 by Christopher Mitchell

Doris Kelley takes a look at one of the early citywide publicly owned broadband systems - Cybernet in Cedar Falls, Iowa. Cybernet is run by CFU and is an HFC (cable) network that also offers some fiber-optic connections for businesses. In this paper, Kelley takes a look at some of the benefits the network has brought to the community.

From the start of the paper:

Cedar Falls Utilities, the largest municipally owned four-service utility in Iowa, provides electric, natural gas, water and communications services to a community of over 36,000 people. The citizens of Cedar Falls have been and continue to be the driving force behind Cedar Falls Utilities. Because of citizen demand and involvement, what once began as an unreliable water supply from “Big Springs,” a small light plant built with discarded bricks and an outdated manufactured gas system, has grown into an organization that is recognized nation-wide in the utility industry for outstanding performance management and some of the most favorable utility rates in the country.

Cedar Falls Utilities (CFU) is a strong supporter of economic development. Through the years, the Cedar Falls community has directly benefited by the operation of its municipally owned utilities through direct customer rate savings, free or special customer service programs and fund transfers to the City’s general fund.

CFU has made great strides to further its commitment to economic development. In 1994, a new horizon was encouraged through visionary thinking. Considerable strategic planning and analysis preceded the decision to design, construct and operate a Broadband Fiber Optic Communications System. The Cedar Falls Board of Trustees spent approximately 24 months studying the technical and financial feasibility of constructing and operating such a network. Finally, on October 24, 1994, the Cedar Falls City Council adopted ordinance No. 2072 forming the country’s second Municipal Communications Utility and transferring authority to the Cedar Falls Utilities Board of Trustees.

Posted May 18, 2009 by Christopher Mitchell

This paper provides evidence that municipally owned and operated cable television enterprises are financially viable and provide large rate savings to their communities. The findings contradict allegations in Costs, Benefits, and Long-Term Sustainability of Municipal Cable Television Overbuilds, a 1998 paper authored by Ronald J. Rizzuto and Michael O. Wirth, that such enterprises are likely to be poor investments for cities. The authors claim that analysis of financial histories of the cable enterprises in Glasgow (Kentucky), Paragould (Arkansas), and Negaunee (Michigan) “clearly indicates that [they] have been poor investments from a pure business perspective.” They are pessimistic about the fourth, Cedar Falls (Iowa). The authors contend that these enterprises “have not generated [or will not generate] sufficient cash flows to cover their out of pocket cash needs.... None ... [is] currently sustainable over the long run.” However, by the incorrect criteria and analysis that Rizzuto and Wirth use, few new enterprises—public or private—would pass financial muster. The authors further contend that the only reason these utilities have been able to remain solvent is because of various subsidies, personal and property tax transfers, or interest-free loans. Rizzuto and Wirth’s conclusions are not surprising since their paper was partially funded by Telecommunications, Inc. (“TCI”), the private, incumbent cable television provider in Cedar Falls at the time the city was creating its municipal cable enterprise. Although Rizzuto and Wirth’s paper was published seven years ago, critical review of it is timely and important. Formation of municipal cable enterprises is a major public policy issue; private broadband providers have been successful in having several states bar or place crippling limitations on the formation of such enterprises. The time that has elapsed since the paper was published provides a good perspective for checking the authors’ predictions about the financial viability of the four municipal enterprises. Most importantly, however, Rizzuto and Wirth’s paper is often cited currently by those who oppose municipal entry in the cable television industry and related broadband industries. Their paper is widely quoted in reports of other organizations that oppose formation of municipal cable enterprises.

Posted April 27, 2009 by Christopher Mitchell

These are funny old advertisements that rightly note one of the largest problems with cable networks: bandwidth is shared among hundreds of houses. Of course, DSL is hardly better. We need full-fiber networks that are accountable to the community. Found at FiberEvolution.com

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