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Perhaps the biggest disappointment from the broadband stimulus program was its focus on middle mile investments in a bid to avoid overly upsetting powerful incumbent providers who do not look kindly upon competition (something we discussed here). Some claimed that by increasing middle mile options, the private sector will have greater incentive to invest in the next-generation broadband networks communities desperately need. While this is undoubtedly true, it ignores the biggest hurdle facing network deployers: the high cost of building the network. Reducing the operating expenses of a new network by dropping backhaul prices does very little to allow a deployer (private, public, etc) to better afford the high capital cost of building the network. To illustrate, I could greatly improve my vertical but I still would not play in the NBA (apparently, that requires talent also). Remarkably, we have a fantastic test case of what happens when a government builds massive middle-mile connections and expects the private sector to complete the last mile build: Alberta Province in Canada. Ten years ago, Alberta began building the Supernet, a massive mostly fiber backbone delivering 100Mbps into just about every town in the province (we wrote about this in the back of our Breaking the Broadband Monopoly report). Despite the fact that anyone could get affordable backhaul, a recent Calgary Herald article revealed that half a million people still only have access to dial-up. This illustrates an important lesson: by making ubiquitous backhaul available, the private sector did invest. Unfortunately, it invested only in the profitable areas and has left perhaps a larger problem behind for the public sector to solve.
The plan was to leave it up to private Internet service providers to supply the final leg of the connection between the SuperNet and individual users. Unfortunately for many residents who live outside of major urban centres, there's often little financial incentive for providers to do so.
Some munis in Alberta have built last mile networks themselves...Read more
The county brought the broadband cooperative in to lease out unused fiber on the county’s 110-mile network, which it built over the past two years. The cooperative will connect business customers with its own members, which include various sizes of Internet service providers that can link the businesses to the network. Prices will vary depending on the service provider and location of the business.
The Carroll County Times offers greater coverage in a story by Marc Shapiro.
The County's $9 million network is financed in part with cost savings from transitioning away from $600/month T1 lines and is the result of many years of work. Remember that a T1 offers 1.5 Mbps of connectivity, the new fiber network likely offers 100Mbps to 1Gbps today and is capable of offering much greater capacity in the future. Building these networks is a far smarter move than leasing T1 lines.
Every county school, every major county facility and Carroll Community College is on broadband Internet, said Mark Ripper, chief information officer with the Carroll County Department of Technology Services. All county facilities and libraries and the board of education will have broadband Internet shortly, he said.
The Maryland Broadband Cooperative, a public/private partnership that promotes economic development through technological infrastructure, will lease the "dark fiber," unused fiber, to its member companies, who can in turn sell Internet service to local businesses. The MDBC has 59 members, about 30 of which are Internet providers, said Patrick Mitchell, president and CEO of the MDBC.
Western Massachusetts' Wired West is an exciting approach to bringing next-generation broadband networks to rural areas. Thanks to Design Nine's news blog for alerting me to this decision.
“You often hear that it is too expensive to bring fiber-optic lines to every home, business and institution in a rural area," said Webb, who lives in the remote southern Berkshire town of Monterey. “But that only means it’s too expensive for the business model of private-sector companies who have to show profitability in a very short period. It is not too too expensive if it is done by the communities themselves on a basis that does not have to meet those market demands."
Wired West has announced a decision on the difficult issue of governance structure. They are going to be a public co-operative, comprised of the member towns.
Now the member towns will have to approve the structure and the organization will move forward on the planning necessary to develop, finance, and build their broadband network.
I just spoke with Danna MacKenzie of Cook County and Gary Fields of National Public Broadband (working with Lake County) to find out just how excited they are about yesterday's announcement of broadband stimulus awards. Both Lake and County (separate projects) have been funded to build fiber-to-the-home networks to everyone on the power grid in the region.
They are pretty excited.
In a few years, these North Shore Communities will likely have better broadband options than the metro region of Minneapolis and Saint Paul -- a far cry from the beginning of this year when a single fiber cut stranded the whole north shore.
Bob Kelleher at Minnesota Public Radio covered the awards:
Combined, they will connect 37,000 residents, 1,000 businesses and 98 institutions such as hospitals and schools.
Cook County actually has a double whammy - they already stood to benefit from the North East Service Cooperative, which is building high capacity fiber-optic lines through the North Shore to offer middle-mile backhaul and connect local government facilities and schools.
As of yesterday, they will also get a fiber-to-the-home network from the Arrowhead Electric Cooperative. Cook, currently served in part by Qwest, has little access to true broadband -- some 37% have access to anemic DSL connections and the rest are stuck with dial-up.
Details of the award from Kelleher at MPR:
Joe Buttweiler, who directs membership services with the Lutsen-based Arrowhead Electric Cooperative, said 70 percent of the federal award is a grant and the remainder a loan. He said the cooperative will add another $600,000 for capital.
Arrowhead Electric Cooperative proposes to build and operate a fiber optic network to the residential and commercial...
Last week I had the good fortune of spending 24 hours in Chattanooga to get a better sense of what the community is doing with their impressive broadband network, EPBFi. It was pretty amazing, especially for an outdoorsy-kinda-guy like me. Chattanooga has an impressive air about it, a place on the up-swing.
I'll be writing more about my observations in the coming weeks (my schedule from last week to next week is jam-packed) but I wanted to note that Chattanooga looks to be one incredible place to be in coming years. They offer the fastest broadband in the nation at prices competitive to Comcast (which is to say, they cost a tiny bit more for a ton bigger, better, and faster service).
The Chattanoogan Hotel, where I stayed, was fed by community fiber and it was the best hotel broadband I have ever used.
The city is committed not just to offering top-notch broadband, but working with people in the community that want to do interesting things. In fact, they are more or less courting people who want to do interesting things. So many communities focus entirely on the need to build the network… not all appreciate the challenges of fully leveraging such a network.
When a community has arguably the best network available in the country, they want to let people know. Especially people who want to design the next-generation applications that will take advantage of everyone having extremely fast connectivity. They have plenty of space for co-location and still more room for expansion (they are as professional as you get in this regard).
But the reason for this post was a reminder in a local story, "Fiber-optic workers take to the woods." Chattanooga is only 25% of the Electric Power Board's footprint, but everyone served by EPB will have access to the same incredible broadband speeds.
Unlike big companies who only roll out services where profits are guaranteed, EPB contends it never considered only serving areas that would be profitable. I asked several times, noting that I frequently see comments from some that people who live in rural areas made a choice and they should simply have to pay more or not be connected as a consequence.
Local leaders reject that approach -- a fitting legacy in a state that was famously electrified by one of the most successful...Read more
Last night, I drove down to Winthrop (Sibley County) and then Fairfax (Renville County) to get a better sense of their discussions around next-generation broadband networks (originally covered here).
Throughout this week, they are having public meetings to discuss the potential project though the feasibility study is not yet completed. Doug Dawson of CCG Consulting, author of the feasibility study, is in town talking with folks about potential approaches. However, he made it clear that there is no guarantee they will find a business plan that can work to cover all of Sibley County and the area around Fairfax. Stay current on their project from the Sibley & Renville County Fiber site.
Winthrop's City Administrator, Mark Erickson, is committed to serving the farms though. There is little doubt that the project could succeed financially by serving only the towns, which harbor some 80% of the population. But Erickson recognizes that the towns depend on the farmers and that everyone will benefit more from the network if it is universally available.
Many of the people in towns already have access to some basic broadband - either a slow DSL (in some cases so slow even the old super slow FCC broadband definition does not cover it) or a last-generation cable network from Mediacom. The cable television comes out of Dubuque though, so it isn't exactly local.
The project was originally conceived to cover Sibley County. However, a high school in nearby Fairfax has decided to use iPads [pdf] to revamp its curriculum and it would be a travesty to have such great broadband available across the county border when so many students at GFW have iPads but little access to true broadband.
Most of the area schools have continued to do what they can with basic T.1 lines - too little broadband (at too high a cost!) to really use any modern educational applications. And the mandated state-wide testing is a nightmare across these connections. The new network will bring proper broadband connections at affordable rates.
The East Central Vermont Fiber Network is launching a pilot project to start connecting rural customers with a FTTH network. EC Fiber has long labored to find funding -- it was one of many projects to see funding avenues disappear with the economic collapse following the fall of Lehman Brothers. The Feds also failed to fund them (instead opting to fund middle mile after middle mile of projects that were less offensive to powerful incumbent companies.
But they have returned to the private markets and feel sufficiently confident about financing options to build this pilot project.
The pilot project will provide a solid foundation for the capital lease used to build out the rest of the network, providing 100% coverage in 23 towns in East Central Vermont. While the intent of the project is to prove that the larger project is viable, according to Nulty, “it will be able to stand on its own if we don’t raise another dime of capital.”
The project is expected to cost some $80 million in total to cover the 23 participating towns. ECFiber has already obtained the necessary permissions from the State to offer video and telecommunications services. The Pilot Project targets the town of Bethel, where the central hub for the entire network is located.
ECFiber is one of many groups that are using a nonprofit ownership model to build the network. The towns work together to create a nonprofit that will finance, own, and operate the network to ensure community needs are put before profits -- now and in the future.
Update: The pilot project will only offer broadband and phone services due to the high fixed cost of trying to offer video services for such a small population.
Today's Star Tribune editorializes about the importance of broadband and calls on the state to reduce the 65% referendum barrier that prevents a number of communities from building the network infrastructure they need.
The editorial recognizes the successes of Monticello, Minnesota, as well as Bristol Virginia Utilities at spurring broadband growth and lowering prices.
Just as we previously wrote about the unfairness of the 65% referendum requirement, the Strib agreed:
An antiquated state law also stands in the way of communities that want to pursue their own version of FiberNet Monticello. With research increasingly demonstrating that high-speed service boosts rural economic development, communities underserved by current providers should not be held back by the unfair 65 percent threshold for popular support the law requires to go forward. A simple majority would suffice.
Finally, they corrected noted that broadband has been a total sleeper issue. If the next governor pays as little attention to broadband as current Governor Pawlenty, the state will be in dire straits.
A recent article discussing testimony from the President of the industry trade group, National Cable & Telecommunications Association (NCTA) reminded me once again that Congress and the FCC have utterly given up on true broadband competition for millions of of Americans.
As with the broadband stimulus funds being handed out by the Commerce Department, NCTA is concerned that the USF money not go to overbuild its members. "It would be a poor use of scarce government resources to subsidize a broadband competitor in communities--including many small, rural communities -where cable operators have invested risk capital to deploy broadband services," McSlarrow says.
This seems like a common sense argument. Why would we want to subsidize broadband for those who already have a single option (underserved) when others have no choice at all (unserved)? Unfortunately, building networks to solve the problem of the unserved is all but impossible without simultaneously serving some who are underserved. This is because the unserved are often in areas so remote and expensive to serve, there is no sustainable business model to serve only them.
So the idea that we could somehow only target the unserved with networks is extremely suspect. Unless we want to endlessly subsidize networks in these areas (which companies like Qwest emphatically want because they would likely collect those subsides endlessly), we need to encourage sustainable networks that reach across those already served, underserved, and unserved.
He added that it also might discourage the incumbent from continuing to risk that capital. "Government subsidies for one competitor in markets already served by broadband also might discourage the existing provider from making continued investments in its network facilities.
I certainly respect this argument up to a point. But when it comes to essential infrastructure, we know that most existing providers (particularly absentee-owned massive companies) are delaying investments in network facilities anyway because the lack of true competition allows them to delay making the investments more common in our international peers (where true competition exists, often as a result of smarter government policies than we can muster here). The principle of self-...Read more