Folks in New Hampshire are fed up with the private carriers ignoring them and have started an initiative to build their own fiber-optic open access network. Looks like the site is pretty new, so check back for details.

Last summer, I predicted the NTIA's rules for the broadband stimulus would disadvantage the public sector and tilt the playing field toward the private sector. I was right. Consider a recent story about the first round of the stimulus:

With time and resources scarce and applications to review from nearly 2,200 entities, favoring vendors was less complicated because they wrote savvier proposals and required less follow-up, in Winogradoff's view.

Private companies were able to submit savvier proposals and generally swamp the system with far more proposals, slowing the entire process because the federal agencies did not expect the volume. NTIA claimed they wanted to make the funds more widely available and instead shut out much of the public sector. NTIA, along with most federal agencies, simply does not understand that a "level playing field" between private companies and the public sector is simply not possible. The public sector has different interests - maximizing social benefits whereas the private sector is interested in generating profits. Public and private entities are different creatures, operating in different regulatory environments, with divergent motivations. You can no more create an objectively level playing field between the two than one could in designing a contest between basketball and soccer teams. The rules are simply going to favor one or the other. The question becomes, who should the rules favor? When it comes to infrastructure and tax dollars, the rules should favor those who put the public interest first. This was the lesson of the Rural Electrification Administration, which was horrified at the idea of lavishing grants on profitable companies in the hopes they would temporarily invest in rural areas. Instead, they offered loans to cooperatives and extended electricity to farms across the country during the worst Depression in our history. What have we learned from that? Nothing. We contort our policies while offering more and more money to companies that time and time again show they have no interest in serving rural America. This is ludicrous - not only have we already built a wire out to almost every home in America, we still have the polls!

In a recent issue, the Economist profiled BVU - the first municipally-owned triple-play fiber-to-the-home network in the U.S. Evidently, the Economist thinks Bristol an unlikely spot to find a full fiber-to-the-home network, but some of the best networks in the U.S. are in these unlikely spots because they are built by communities who have realized the private sector will not build the needed infrastructure. And this infrastructure has brought many jobs to the region:

And the fibre brought jobs. In 2007 both Northrop Grumman, a big American defence contractor, and CGI, an international IT consultancy, said they would hire between them 700 technicians, consultants and call-operators at offices in nearby Lebanon, Virginia, part of BVU’s fibre backbone. Both cited the area’s universities and low cost of living, but neither would have come without BVU’s investment, which Northrop calls absolutely critical.

The article asks a common question but answers it exceedingly well:

Should cities be in the business of providing fast internet access? It depends on whether the internet is an investment or a product. BVU could not afford to maintain its fibre backbone without selling the internet to consumers. And it could not build a subscriber base without offering cable television and a telephone line as well; households these days expect a single price for all three services.

Most communities would rather not have to get involved with selling services like cable television, but such services are generally a necessity to cash-flow the network. So, as they did before with electricity, they do what they must to keep the community strong and competitive.

Finally, a broadband stimulus project that we can get excited about. RUS has announced a grant to expand the publicly owned WindomNet in southwestern Minnesota. Windom was originally built to bring broadband to a small community that Qwest didn't think ready for DSL. They built their own fiber-to-the-home network.

In rural Minnesota, the Southwest Minnesota Broadband Group (SWMBG) has been selected to receive an almost $6.4 million loan and a $6.4 million grant to extend fiber to the Jackson, Lakefield, Windom, Round Lake, Bingham Lake, Brewster, Wilder, Heron Lake, and Okabena communities. This funding, along with an $88,000 private investment, will provide high-speed Internet, voice, and cable television to the participating communities. This will improve the quality of life by increasing the availability of health, education, and public safety services across the region.

Now that network will expand to nearby communities, a move that will strengthen it financially as it can spread the fixed costs of such a network across a wider population base. And these communities will have actually have a choice in providers soon -- rather than relying on absentee incumbents that care only about increasing their profits. They will be beginning expansion work quite quickly according to this brief article.

The Wired Road, a community-owned open access network in rural Virginia, has added an additional wired service provider and announced expansion plans. This is a network in Grayson and Carroll counties as well as the city of Galax. Services on the Wired Road are provided exclusively by independent service providers, not the network owners. The network currently offers services in limited areas but plans to serve most of the region by 2012 with both fiber-optic and wireless options. NationsLine now offers a variety of services, including VOIP and broadband to those on the network. The network will expand this spring:

Bolen also announced The Wired Road plans to add fiber and wireless services to Grant in western Grayson County, with groundbreaking tentatively set for spring. Funding this expansion is an $837,453 Community Connect grant received from the U.S. Department of Agriculture’s Rural Utilities Service. This latest project includes a public computer center that will be housed at the Grant Grange Hall.

For some 12 hours last week, entire communities found themselves without access to telecommunications due to a fiber cut to a Qwest cable that services the entire region. This is not the first time such a cut has marooned everything from Homeland Security to long distance phone calls to businesses that can no longer accept credit card transactions -- but Qwest has refused to invest in a redundant cable, showing their disregard for those communities. I wonder how many businesses were hurt by their sudden and unplanned isolation from clients, partners, and others. How many missed contracts or deadlines? It shows the insanity of putting barriers before communities that are trying to build the very networks companies like Qwest promise but never deliver (barriers like the 65% referendum to offer telephone services for publicly owned networks). Both Lake and Cook Counties are waiting to hear the status of their applications for federal broadband stimulus funds, with which they will build broadband networks. Companies like Qwest and Mediacom have opposed new networks in an effort to protect their turf, even while refusing to invest in those areas because they do not generate sufficient profits. These County initiatives have not been denied stimulus funding but have also not moved into the "due diligence" phase, placing them in limbo and forcing them to prepare additional applications for the second round of funding before they even know why their application was denied (if it is denied) in the first round. Somewhere, Joseph Heller is smiling.* MPR provided good coverage of this fiber cut even though they did not air an explanation as to why Qwest finds it reasonable to keep these communities connected with a single cable.

Bank ATM's failed. No one could use their credit cards. But as bad as that was for business, the 12-hour-long outage knocked out what the federal government calls a "vital part of our nation's emergency response system." The outage killed 911 emergency service in Cook County, Chief Deputy Leif Lunde said. ... With no 911 service, county officials turned to volunteer firefighters to field emergency calls from normally un-staffed fire halls. Fire truck radios relayed the information back to Grand Marais.

Last month, the Daily Yonder offered a short history of Universal Service in telecommunications in the U.S. Due to the high costs of providing services in many areas of the country, private network owners have never demonstrated an interest in providing universal service, leading to various government initiatives to expand access to telecom networks. One of the reasons we support publicly owned networks is because we strongly believe in universal service. Universal access to fast and affordable broadband is an important goal for a variety of reasons, not the least of which is its potential to democratize and enhance educational opportunities. Readers of this site undoubtedly recognize why fast and affordable access to broadband is important to people in rural areas. What is often forgotten is why people who already have access to such broadband should care about extending access to those who don't yet have it -- aside from simply caring about fellow Americans. There are actually self-interested reasons why everyone should support extending networks into rural areas. Perhaps the best reason is something called the "network effect" which refers to the principle that the value of a network increases as more users join. One example of this is the telephone, where a telephone network becomes more valuable as more people are on it - allowing subscribers greater access to each other. Another benefit rooted in self-interest is analogous to benefits of rural electrification. When publicly owned electrical networks electrified the country-side, new markets were created as people with electricity began buying appliances, creating a demand for more products and services. Though the effect may not be as strong with broadband, the new technologies will create new markets, creating more opportunities for everyone. I do not suggest these self-interested motivations are the sole or best reasons for universal service, but I also want to make sure they are part of the discussion because we all benefit by ensuring everyone has access to these essential infrastructures.

After reading an impressive article in the South Washington County Bulletin, I am convinced that most Americans now understand that broadband is essential infrastructure for communities. Don Davis' "Speedy Internet could boost rural Minnesota" is a lengthy and thorough discussion of why every community needs broadband connections. He starts by noting the MN Broadband Task Force, which found that the state should make sure broadband access is ubiquitous in the coming years at minimum speeds considerably above what is available currently in most of Minnesota. What it lacked was a suggestion of how to get there. Don delves into the Lake County solution:

A northeastern Minnesota county is doing just that and may have the answer, at least for those in the "second Minnesota." Lake County hopes to blaze a trail to a faster Internet with private businesses paying most of the cost. County officials want to lay fiber optic cable, capable of carrying high-speed signals, to every home and business with electricity. If it happens, Lake County could become a model not only for Minnesota but the country by offering its rural citizens the same service as their big-city cousins receive.

As detailed in the article, Lake County has lost economic development opportunities precisely because they cannot guarantee fast and affordable connectivity to those who otherwise want to locate there. What he does not make clear is that Lake County will own this network. It will be operated by National Public Broadband - a nonprofit. The private sector is not interested in bringing true broadband to the North Shore and local citizens should be glad of it - they will get a far superior network than Qwest could have built. Once the public builds this fiber network (using private sector contractors), other private sector companies will provide services over it. This is a good model - the public builds the infrastructure and allows private companies to deliver services. The public can ensure everyone has equal access by physically connecting every residence and business. Unfortunately, one of the MN Task Force members - who should know better - is quoted as saying it isn't "financially feasible" to build fiber to every home. What is or is not financially feasible is debatable.

I have just submitted comments from the Institute for Local Self-Reliance to both the the National Telecommunications and Information Administration (NTIA) and the Rural Utilities Service (RUS) regarding suggestions for rules in round two (the last round) of the broadband stimulus programs -- the Broadband Technology Opportunities Program (BTOP - administered by NTIA) and Broadband Initiatives Program (BIP - administered by RUS). The two agencies previously posted a joint request for information [pdf] on lessons learned from the first round:

RUS and NTIA released a joint Request for Information (RFI) seeking comment on further implementation of the Broadband Initiatives Program (BIP) and the Broadband Technology Opportunities Program (BTOP). Comments must be received by November 30, 2009. The input the agencies expect to receive from this process is intended to inform the second round of funding.

We offered five pages of comments, responding directly to the questions - I am led to believe that this is the preferred way of responding to such requests for information. Thus, the format consists of a short introduction and then questions (in italics) followed by our responses. Unsurprisingly, we generally encourage NTIA and RUS to better serve the public interest by requiring more transparency in the second round. We also call on them to stop accepting "advertised" speeds in their broadband definition and use actual delivered speeds in order to ensure communities are not discouraged from applying because their incumbent providers exaggerate the capabilities of their network. Most importantly, we call on NTIA and RUS to encourage public sector entities to apply by ceasing to consider all private networks to operate in the public interest. As we previously documented here, NTIA subverted the intent of Congress with the rules from round one. The rules should prefer public and nonprofit entities as they are directly accountable to the public and should therefore be the first in line to receive public money for essential infrastructure. As the number of applications to NTIA and RUS was far higher than expected, making the public interest requirements stronger should be a natural response.

BVU's OptiNet has received a grant to expand its fiber network in rural Virginia from the Virginia Tobacco Indemnification and Community Revitalization Commission. The project adds redundancy in a rural area where telecommunications infrastructure tends to be ignored by the private sector.

“The broadband expansion fortifies the existing fiber route between BVU and Citizens as well as giving our area a redundant fiber-optic line to Northern Virginia, where bandwidth needs are increasing all the time. It is necessary to our region’s future and the survivability of our existing telecom network,” he [Virginia Delegate Terry Kilgore] noted.

BVU was the first municipal network in the U.S. providing the triple-play over a full fiber-to-the-home network. And it is doing quite well according to its annual audit report.

Conducted by Brown Edwards & Co., certified public accountants, the audit revealed increased revenues and no surprises, partner and accountant Richard Linnen told the BVU board of directors at its Monday meeting. “It was a clean opinion and an unqualified audit, as it is every year,” Linnen said.

Such independent audits are a useful exercise to ensure these essential networks are operating efficiently and accountably. Additionally, these audits are useful to refute false claims of impropriety from private sector companies looking to discredit publicly owned networks.