Catharine Rice gave a terrific presentation detailing the ways Time Warner has responded to the municipally-owned Greenlight fiber-to-the-home network: raising the rates on everyone around them and cutting great deals to Wilson residents. I saw the presentation on the Save NC Broadband blog which also has a link to her slides - make sure you follow along with the slides. She details how Time Warner has raised rates in towns around Wilson while lowering their prices and offering better broadband speeds in Wilson. Once again, we see that a community building their own network has a variety of benefits: a superior modern network that is community owned, lower prices on the last-generation network from the incumbent, and some investment from the incumbent. Now the question is whether Wilson's residents will be smart enough to support the publicly owned network in the face of Time Warner's low low prices - a recognizing that a few short years of low prices (for low quality) are not worth abandoning the publicly owned network and the benefits it has created in the community.
Tag: "community savings"
The Jackson Energy Authority (JEA) network now has over 16,000 subscribers and offers speeds up to 100 Mbps for local businesses and 25 Mbps for standard residential users.
Jackson is considered one of the most technologically advanced cities in the U.S. We have four competitors in the market with AT&T, Bell South, Charter and JEA. We computed that over $8 million to $9 million has been saved by residents in this city when compared to other cities of its size because of the competition.
These are the kind of hard-to-quantify savings that too often go unnoticed in discussions about the value of publicly owned broadband projects. What is the value of competition? How much economic development has occurred directly from the JEA network and indirectly from the lower prices and greater investments that result from competition?
Another real-world example of why communities cannot depend on the private sector to build the infrastructure needed by the community, Scottsburg Indiana suffered from telecommunications underinvestment and was about to lose jobs because the companies could not get the connections they needed.
This article reports that the cost of T1 lines was $1600/month but other sources suggested they were as low as a mere $1300/month. Nonetheless, the costs were prohibitive and benefits from building a publicly owned system were immense:
The total cost to build the city-wide network was only $385,000, a figure that includes all systems and software. The result is broadband everywhere at affordable prices, meaning that businesses that need broadband can get it, and sometimes even save money, too. For example, school officials estimate that they are saving approximately $16,000 per month.
The Broadband Properties Muni Snapshot of Jackson Energy Authority, serving Jackson Tennessee, offers a fiber-to-the-home network. As is common to the snapshots, it is heavy on technical data.
After 4 years, they had an overall take rate of 39% as well as some businesses locating in the area due to the network. Residents have saved some $8 million in aggregate since the network began offering services.
Another snapshot, mostly containing technical data on the Morristown FTTH network - FiberNET. Like many networks in Tennessee, this network is run by the municipal utility. They started signing up customers in May 2006 and by late 2008 already had a take rate of 33%.
Perhaps the most significant sign of success is that neighboring communities want service as well. By offering comparably services at lower prices, the community saves some $1.1 million/year.