Tag: "stimulus"

Posted February 9, 2011 by christopher

For two years, National Public Broadband (led by Gary Fields and Tim Nulty) has worked with Lake County, Minnesota, to build a universal rural FTTH broadband network to everyone in the County and some nearby towns in Saint Louis County. Toward the end of 2010, the relationship became somewhat tense as some county commissioners questioned what NPB had told them about Burlington Telecom, and a number of media outlets raised questions about Nulty's relationship to BT's problems without actually investigating the story.

Now the Lake County News-Chronicle (which, over the course of this story, has taken the time to report facts rather than following the lazy lead of the Star Tribune and Duluth News Tribune), reports that Lake County and National Public Broadband are kaput. Lake County is seeking a new partner to build the project.

Lake County could not reach agreement on a permanent contract with National Public Broadband, its consultant firm for nearly two years. The two sides battled for nearly two months and couldn’t solve issues based on bonus payments and the ability for the county to fire NPB without cause and without penalty. The negotiations had bogged down work on the actual project, Commissioner Paul Bergman said, and the board wanted a fresh start.

Additionally, due to the state of financial markets, the County is planning to self-fund the $3.5 million local obligation required to access to the broadband stimulus award. Lake County hoped to bond for the matching funds but the current interest rates make that an fiscally unwise approach.

While this does not change the project, it will change the perception of the project and open it to increased attacks from those who don't want the County to build a network (despite the fact that private providers have no interest in providing anything other than slow DSL and cable networks).

The County had long maintained that no public money would be used. However, most people will likely not care as long as the project keeps its promise to deliver fast, reliable, and affordable broadband to the community. This is the need -- and people need to stay focused on achieving this goal.

At a commissioner meeting in late December, Gary Fields commented to the Board that...

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Posted February 9, 2011 by christopher

In South Carolina (the state TWC Forgot), AT&T is pushing harsher restrictions on any publicly owned broadband system in an attempt to derail one or more broadband stimulus projects. South Carolina already greatly restricts community broadband networks, likely one of the reasons no incumbent there bothers to upgrade in a similar time frame as the rest of the country.

This should be seen a significant overreach -- AT&T is trying to shut down County efforts to improve middle mile access -- whereas most preemption tends to heavily restrict community last-mile networks. This is a whole new world of anti-competitive policy to favor AT&T (not dissimilar from what AT&T wants to do in Wisconsin and Fairpoint did in Maine).

The bills would force Oconee County to follow guidelines as a broadband service provider that would likely cripple the county’s current three-year project to construct 245 miles of broadband cable, county administrator Scott Moulder said.

...

Oconee County’s goal is to be a so-called “middle mile” provider, Moulder said, essentially providing a network that would allow private broadband providers to extend their service into areas they aren’t serving. In most cases, those are areas where the private providers have found it is not financially feasible to install their own infrastructure.

AT&T, Moulder said, has been asked to be a partner in the project as a retailer, but the company’s current actions are a rebuff.

The Oconee project is meant to attract additional independent service providers to invest in projects, not the County itself. But that hardly matters to AT&T, which wants to preserve the present lack of competition in order to maximize their gains at the public expense.

The Bill, S 483 is viewable here and contains the same old tired arguments claiming...

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Posted February 1, 2011 by christopher

The SF Examiner is the latest to miss the key point when comparing FDR's rural electrification programs with the Obama Administration's broadband stimulus.  Though both programs did extend essential infrastructure to communities either unserved or underserved, an important differentiator is how they approached it.

Seventy years ago, President Franklin Delano Roosevelt realized that if private industry wouldn't run power lines out to the farthest reaches of rural areas, it would take government money to help make it happen. In 1935, the Rural Electrification Administration was established to deliver electricity to the Tennessee Valley and beyond.

But it wasn't just government money that was needed, it was a focus on local self-reliance -- which is what I wrote in a Letter to the Editor submitted to the paper:

Your article rightly notes that many Americans need help in building the broadband networks they need. But it draws a false comparison between FDR's electrification efforts and Obama's Stimulus.

FDR correctly recognized that the private sector is ill-suited to running the infrastructure needed in rural communities and used loans to fund cooperatives that would allow communities to be locally self-reliant.

Obama's stimulus program was a mix of loans and grants (heavy on grants) to mostly private sector for-profit companies that will have less incentive to run the networks in ways that most benefit the communities (upgrades, customer service).

If Obama had learned from FDR, his Administration would have embraced a fiscally responsible approach that encouraged local self-reliance by building networks that are structurally accountable to the communities they serve.

Posted February 1, 2011 by christopher

In a situation similar to the Frontier letters to Sibley we published last week, the cable company Mediacom has sent letters to Silver Bay and Two Harbors in Lake County to scare them into abandoning the rural county-wide FTTH network that they are building with federal broadband stimulus aid.

Interestingly, rather than sticking to the normal fear, uncertainty, and doubt (FUD) campaign, Mediacom apparently based its threats on a draft previous version of the joint powers ordinance rather than the language actually passed by the resolutionsincluded in the current JPA. Whoops.  [See Update below]

Mediacom, perhaps you should focus on improving your networks rather than stifling potential competition.  Please send us copies of letters your community network has received from incumbent providers.

Without further ado, here is the letter [download pdf] sent to Silver Bay and Two Harbors on December 21, 2010 by Tom Larsen, VP of Legal and Public Affairs for Mediacom:


Re: Joint Powers Agreement with Lake

County Dear Mayor Johnson:

Mediacom prides itself in being one of America's leading providers of telecommunications services to small and medium sized communities. As you may be aware, Mediacom offers a highly competitive suite of high-speed Internet, cable television and phone services to homes and businesses throughout Silver Bay (the "City").

It has come to our attention that the City passed a resolution on November 15, 2010 approving a Joint Powers Agreement with Lake County (the "JPA"). Given the significant private capital that Mediacom has invested in order to make advanced telecommunications services available throughout the City, we were extremely surprised to learn that your resolution approving the the JPA includes the following finding in Section 4(e):

The Municipality hereby finds that the facilities composing the Project are necessary to make Internet and other communication services that are not and will not be available through other providers or the private market accessible and available on an equal basis to the residents of the municipality.

As...

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Posted January 28, 2011 by christopher

We are noted critics of federal policies that prioritize subsidies and support for private companies over the public sector (broadly defined to include local government, nonprofits, and cooperatives).  When we analyzed the stimulus rules, we were horrified at the reversal of Congressional Intent, which was clearly to prioritize publicly accountable entities over private entities.

Telecompetitor brings our attention to an RUS report summarizing awards from the BIP stimulus program.  Download the report here [pdf].

As we feared (and previously wrote here), the private sector was heavily prioritized by the Rural Utility Service.  For-profit companies won more awards and received more funds than entities that are structurally accountable to the community.  While we are not opposed to profits per se (we are strong allies with local businesses in the many aspects of our work), the history of private companies owning infrastructure (thereby making the rules) has taught us that communities do best when they have a strong voice over essential infrastructure.

Further, in the rural areas that RUS oversees, networks that are focused on profit have refused to upgrade to modern networks and often offer poor customer service.  Throwing more public money at the private sector is a terrible long-term solution that will require ever larger subsidies over time when policy should encourage self-reliance and a lessening need for subsidies over time.

These charts are snipped from the RUS Report linked to above.

RUS awards by awardee

Though we are quite critical of the RUS's prioritizing the for-profit applicants, we are relieved to see that RUS correctly prioritized wireline technologies (mostly fiber-optic) over wireless.  Wireless remains a complement to wireline, not a substitute.  Tax dollars should be invested for the long term - into fiber-optics that can also support wireless (wireless starts at a tower often fed by...

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Posted January 7, 2011 by christopher

The Port Authority of Medina County, Ohio, has successfully bonded $14.4 million to take advantage of a broadband stimulus award to build a fiber-optic network connecting community anchor institutions and businesses with better broadband.

Bethany Dentler, executive director of the Medina County Economic Development Corporation, said Dec. 17 that a bond consultant had just completed sale of the bonds at an average interest rate of 5.96 percent. Cash from the bond sale was expected to be in the hands of the Medina County Port Authority by the end of the year and a fiber lighting ceremony to kickoff the construction phase of the project is planned for March or April. Dentler said the port authority, which will own the network, plans to pay off the bonds over the next 20 years with fees charged to customers of the fiber network.

The nonprofit organization OneCommunity will build and presumably operate the network, which will be owned by the County. Being located in close enough proximity to work with OneCommunity appears to be a terrific advantage for communities who make investments in broadband infrastructure. The $1.4 million in stimulus funds aiding this project were a part of the larger award given to OneCommunity as part of their efforts to better wire 20 counties in Ohio.

Posted January 7, 2011 by christopher

New Update: Mediacom has invented language in the Joint Power Agreement and threatened the Mayors of Silver Bay and Two Harbors. Let's see how dirty Mediacom will get to prevent competition.

Lake County, recipient of a broadband stimulus award to build a rural county-wide (larger, actually) fiber-to-the-home network, has been wrestling with questions they have related to the problems at Burlington Telecom. After some lazy reporting in the Star Tribune and Duluth News Tribune exaggerated Tim Nulty's role in the problems Burlington Telecom now faces, some on the County Board began asking more questions of National Public Broadband (of which Tim is CEO).

I attended a meeting after Christmas to observe the discussion, share our understanding of the situation, and discuss the experiences of other community networks. Next week, the County Board plans to decide whether they will alter the arrangement with National Public Broadband or possibly seek another partner in the project -- a development that may have implications for changes or revocation of the stimulus funding.

It is important to note that due to structural differences, the problems in Burlington (which, at the least, were hidden from the public allowing them to snowball) are extremely unlikely to repeat in Lake County.

The Lake County Chronicle has published a lengthy editorial responding to concerns and noting the ramifications of any changes to the partnership with National Public Broadband. As of this writing, it is not yet behind a pay wall.

It offers some wise thoughts:

Like the debate over whether the meetings being held to draw up the rollout plans for the county should be public or private, NPB needs to better apply the rules of working within the expectations of open government. We demand transparency and a full accounting of tax dollars.

It’s fair to wonder, as some board members did last week, just what NPB would withhold from the board if things don’t go swimmingly with the Lake County plan. All adjustments, all bumps along the road, need to be publicly and fully discussed.

The county can use NPB’s disclosure...

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Posted December 3, 2010 by christopher

The Chelan Public Utility District in Washington state is upgrading network capacity as it starts expanding the network following its broadband stimulus award. We previously covered their consideration of whether to expand from passing 80% of the territory to 98%.

Chelan is one of the most rural publicly owned fiber networks as well as one of the oldest ones. In a rarity, it looks likely to run in the red permanently (the pains of rural, mountain terrain) with the support of most ratepayers. These ratepayers recognize the many benefits of having the network outweigh its inability to entirely pay for itself. The utility also runs a sewer project that is subsidized by wholesale electricity sales. Though some areas in Chelan are served by Charter and Frontier, the more remote folks would have no broadband access if not for the PUD.

With the planned upgrades in 2011, Chelan's open access services will offer far faster speeds than available from the cable and DSL providers. Under Washington law, the PUDs cannot sell telecommunications services directly to customer. The PUD builds the network infrastructure and allows independent service providers to lease access while competing with each other for subscribers. Though this is a great approach for creating a competitive broadband market, it has proved difficult to finance (if one believes this essential infrastructure should not be subsidized as roads are).

When the PUD considered whether to pursue the expansion (meaning taking a federal grant covering 75% of the costs and agreeing to run the network for 22 years), it asked the ratepayers for feedback:

Sixty-four percent of 450 randomly chosen Chelan County registered voters who were part of phone survey in August said they favor taking the grant and completing the buildout, even if it means their electric bills will go up by as much as 3 percent — about $1.50 more on a $50 per month power bill.

On November 9, PUD Commissioners approved the rate increase.

Chelan's service providers currently offer connections of 6Mbps/384kbps or 12 Mbps/384kbps. As with...

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Posted November 29, 2010 by christopher

Vermonters are asking some hard questions about the federal broadband stimulus decision to throw money at a wireless network for Vermont rather than loaning money to an organization dedicated to delivering real broadband.

Senator Bernie Sanders convened a meeting to discuss the awards toward the end of October.

Senator Bernie Sanders led off his “broadband town meeting” Saturday morning at Vermont Technical College with a ringing affirmation of the need for better broadband coverage in Vermont and the nation.

However, nobody in the crowd of nearly 300 people needed to be convinced of that. What they wanted to know was whether a huge new federal grant to a private company was the right way to do it.

VTel, a small private telephone company, received a $116 million grant to build a FTTH network to serve their existing 18,000 footprint as well as a wireless network that is intended to serve the entire state.

In contrast, the East Central Vermont Fiber Network (which we have covered previously), applied for a loan to build a FTTH network to everyone in the 24 communities that have joined together to form the network. The ECFiber network would be run by a nonprofit and would repay the loan from revenue generated by selling triple-play services on the network.

Vermonters have a strong fiscal conservatism streak, which has shown up strongly in the discussions around this situation, something noted in a story leading up to the Sanders meeting:

He will get plenty of both from representatives of ECFiber, the consortium of 23 towns that has been planning a network of fiber-optic broadband to virtually every home in the White River Valley and beyond.

The organization was stung recently when its own request for a loan was not funded by RUS, which instead awarded a much larger outright grant to VTel, which is located in Springfield.

Our position at MuniNetworks, is quite similar to that of the these Vermonters: loans would be better policy than grants for broadband infrastructure.

Supporters of the wireless network, including VTel's CEO, Michel Guite, have suggested the $116 million...

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Posted November 15, 2010 by christopher

Maryland received a very large award to connect hundreds of community anchors. This is an excellent use of public money (it will lower the future need for public money to fund local agencies). The award came from NTIA's BTOP program.

The broadband funding will result in vastly improved Internet speeds for local government offices, schools, hospitals, and emergency communication networks across Maryland, officials said. More than 1,200 miles of new fiber-optic cable will be installed across Maryland — a 50 percent increase over the existing network capability, officials said.

The money will be used to link 458 schools, 44 libraries, 262 police and emergency centers, 15 community colleges, six universities and 221 other government and community centers in a statewide network designed to be available and secure in emergencies.

As the networks are built with funds from the broadband stimulus, the networks will not be silo'ed, as is too often the case with public networks built primarily to connect community institutions. These networks will be available for the private sector to lease as well, creating more opportunities for broadband expansion and future competition. However, the track record of these middle mile networks creating last-mile connections is extremely poor. So let's not get too carried away, but it is a good step in the direction of local self-reliance and less of a dependency on massive absentee companies.

Credit goes to Howard County's Ira Levy, who worked for more than a year to put the project together.

Much of the money — about $72 million dedicated to the 10 jurisdictions in Central Maryland — will be administered by Howard County. It was Howard's information systems director, Ira Levy, who spent 18 months leading the effort to get the money.

Baltimore County has announced an $18.5 million plan to better connect their community institutions as part of the larger project.

Baltimore County unveiled an $18.5 million plan Wednesday that officials said will vastly improve the local Internet system, provide quicker links among public safety agencies, schools,...

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