Tag: "public v private"

Posted January 7, 2014 by Christopher Mitchell

Today, Lisa and I are joined by Eric Lampland for a discussion of how a community could justify building a community owned network from the indirect benefits that it would create, including the savings that each household realizes from competition driving down prices. Eric Lampland is the CEO and principal consultant of Lookout Point Communications, which helps local governments that are building a network or considering an investment.

Eric and I start by discussing how quickly the cost savings per household add up to equal more than the cost of building a network and we digress from there, covering other topics related to community owned networks. This includes how big cable companies would respond to this approach.

I have to note that most community networks have not been justified on this basis - the vast majority of community networks were designed to pay their full costs and they are doing so. Here, we discuss the general benefits of these networks that are often sidelined in the policy discussion and how they alone may justify a fiber network.

Toward the end, we begin discussing open access, something we will likely return to in the future as Eric has long both advocated for open access and has some insights into the technical challenges of building such a network.

Read the transcript from this episode here.

We want your feedback and suggestions for the show - please e-mail us or leave a comment below. Also, feel free to suggest other guests, topics, or questions you want us to address.

This show is 25 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed.

Listen to previous episodes here. You can can download this Mp3 file directly from here.

Find more episodes in our podcast index.

Thanks to...

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Posted January 6, 2014 by Christopher Mitchell

A few weeks ago, a Geekwire interview with outgoing Seattle Mayor Mike McGinn announced that the Gigabit Squared project there was in jeopardy. Gigabit Squared has had difficulty raising all the necessary capital for its project, building Fiber-to-the-Home to several neighborhoods in part by using City owned fiber to reduce the cost of building its trunk lines.

There are a number of important lessons, none of them new, that we should take away from this disappointing news. This is the first of a series of posts on the subject.

But first, some facts. Gigabit Squared is continuing to work on projects in Chicago and Gainsville, Florida. There has been a shake-up at the company among founders and it is not clear what it will do next. Gigabit Squared was not the only vendor responding to Seattle's RFP, just the highest profile one.

Gigabit Squared hoped to raise some $20 million for its Seattle project (for which the website is still live). The original announcement suggested twelve neighborhoods with at least 50,000 households and businesses would be connected. The project is not officially dead, but few have high hopes for it given the change in mayor and many challenges thus far.

The first lesson to draw from this is what we say repeatedly: the broadband market is seriously broken and there is no panacea to fix it. The big cable firms, while beating up on DSL, refuse to compete with each other. They are protected by a moat made up of advantages over potential competitors that includes vast economies of scale allowing them to pay less for advertising, content, and equipment; large existing networks already amortized; vast capacity for predatory pricing by cross-subsidizing from non-competitive areas; and much more.

So if you are an investor with $20 million in cash lying around, why would you ever want to bet against Comcast - especially by investing in an unknown entity that cannot withstand a multi-year price war? You wouldn't and they generally don't. The private sector invests for a return and overbuilding Comcast with fiber almost...

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Posted December 15, 2013 by Lisa Gonzalez

Earlier this month, a majority of voters in Emmetsburg supported a proposal to issue bonds to build a fiber network. Nevertheless, the measure failed because Iowa requires a 60% majority when general obligation bonds fund all or part of a proposed project.

Years ago, the community voted to establish a municipal cable communications or television system. Emmetsburg leaders feel the time is right to realize the community vision. The proposed project would have used revenue bonds in addition to general obligation bonds.

We reported on Mediacoms' efforts to derail the vote with misleading lit drops across the community and we recently received new details on Mediacom's propaganda. The literature does not contain a "Vote No" statement, which may have allowed Medicom to avoid reporting it as an election expense.

Both pieces read like a talking point primer for industry executives. The letter from Senior Vice President Dan Templin, suggests that Mediacom is already operating gigabit service over fiber in Emmetsburg and that they intend to expand that service to business clients. The letter does not suggest that their gigabit service is affordable or reliable, neither of which are terms commonly used to describe Mediacom's services.

Mediacom was ranked last in a 2012 Consumer Report survey of 50,000 people. He, or rather his legal and marketing team, suggests the people of Emmetsburg and Mediacom "work together to leverage our [Mediacom's] investment." The people of Emmetsburg can begin working with Mediacom to "leverage" that investment by sending an email to a vague "info" email address. 

Mediacom also wrote a letter from Delbert Witzke, a Mediacom employee and local resident. It contains the classic anti-muni talking points used by these big companies...

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Posted November 22, 2013 by Christopher Mitchell

One could say that the expansion of the Fire Department takes jobs away from undertakers, furniture salesmen and carpenters in Paducah, but most believe this to be a worthy trade off.

Posted November 22, 2013 by Christopher Mitchell

A free people cannot permanently submit to the private monopoly of a necessity of life.

Posted November 20, 2013 by David Collado

Thomasville is one of six cities served by Community Network Services (CNS) in rural southwest Georgia. We’ve covered Thomasville and CNS in the past, highlighting the benefits of reliable high-speed broadband in these remote rural communities. But one benefit we haven’t covered yet is quite remarkable - Thomasville residents have been paying zero fire tax thanks in large part to revenues from CNS. The City’s fire tax first hit zero in 2012 and was recently maintained there by a Thomasville City Council vote in September.

Thomasville feeds its General Fund with net income (what the private sector would call profit) from its utility services. For 2013, this net income is estimated to reach $8.5 million. What’s more, Thomasville residents enjoy utility prices below the state average. So nobody can complain the City is taking advantage of utility customers by charging excessive rates.

According to a recent Public Service Commission survey, Thomasville residents pay $3.32 per month below the state average per 1,000 kilowatt hours of electricity. And CNS customers who bundle services see annual savings of up to $420. It’s a true win-win - residents get affordable utilities and the City applies the net income to running public services like the police and fire departments, lowering property taxes in the process.

The result is millions in tax savings for Thomasville residents since 2009, when the City set its sights on phasing out the fire tax. In that year, the City collected $1.7-million in fire taxes. In 2010, the City dropped the rate to bring in $995,000. And in 2011, the last year a fire tax was levied, $610,000 was taxed. Based on the 2009 fire tax collection, Thomasville residents have been spared almost $5.2-million in fire taxes since 2010. Speaking about the zero fire tax accomplishment in 2012, Thomasville Mayor, Max Beverly, said “Without the City's...

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Posted November 12, 2013 by Christopher Mitchell

We are back with the fourth volume of our responding to "Crazy Talk" theme on the Community Broadband Bits podcast. The source of this week's crazy talk is a public relations executive for Time Warner Cable, following an interview I did on WUNC in North Carolina.

Lisa Gonzalez, myself, and our colleague John Farrell react to some of the claims made to discuss what you should know about community owned networks and broadband policy more generally.

We talk about misleading statistics, lies about how local governments fund networks, and whether Time Warner Cable or local utilities pay more in taxes.

Read the transcript of this episode here.

We want your feedback and suggestions for the show - please e-mail us or leave a comment below. Also, feel free to suggest other guests, topics, or questions you want us to address.

This show is 23 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed.

Listen to previous episodes here. You can can download this Mp3 file directly from here.

Find more episodes in our podcast index.

Thanks to Mudhoney for the music, licensed using Creative Commons.

Posted October 29, 2013 by Lisa Gonzalez

November 5th probably seems like deja vu for the people of Longmont, Colorado. For the third time, the voters will respond to a ballot question that will impact their community's connectivity. Past referendums addressed whether or not the community could use its fiber ring for connecting businesses and residents.

They now have that authority. This year the question will be "when?"

Local incumbent providers grossly outspent municipal network supporters in 2009 and in 2011 with astroturf campaigns against referendums. Nevertheless, voters decided in 2011 to grant the local utility permission to use existing fiber resources to bring connectivity to businesses and residents. 

Since then, Longmont Power and Communications (LPC) began a slow build-out of fiber to businesses and homes within 500 feet of the existing loop. Local businesses, frustrated with poor service from Comcast and CenturyLink, jumped at the opportunity to have real high-speed connections. With a long list of businesses in queue for their connections, the City Council voted to use LPC reserve funds to connect businesses and residents to the loop. Clearly, the people of Longmont were ready for something better than the existing incumbent services.

Local blogger Steve Elliott connected to the service in September. To satisfy his curiosity, he ran speed tests immediately before and after he transitioned from Comcast service.

Comcast timed in at 26.08 Mbps download and 5.76 Mbps upload. LPC provided 89.99 Mbps download and 62.01 Mbps upload

From his post:

I also timed downloading movies on Netflix on my TV. Before, I could run...

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Posted October 25, 2013 by Christopher Mitchell

WUNC, a public radio station out of Chapel Hill in North Carolina, covered community owned networks and broadband availability on its recent "State of Things" midday program. I was a guest along with a local resident and a public relations executive from Time Warner Cable to discuss North Carolina's broadband compared to other states and its law that effectively bans local governments from building networks.

The discussion is good, though I certaily could have done a better job. Ultimately I thought the host did a good job of bringing in each guest to make their points, though Time Warner Cable was totally unprepared to talk about how North Carolina can expand access. Instead, they talked about the cable giant's requirements to invest in networks in rural areas.

We are going to follow up on these points but for now wanted to make sure you have a chance to listen to the show. Our coverage of the bill discussed in the radio show is available here.

Posted October 24, 2013 by Christopher Mitchell

Longmont Power and Communications, a city-owned utility north of Denver in Colorado, is slowly rolling out a FTTH network to local businesses and residents that are in close proximity to its existing fiber loop. They are offering a symmetrical gigabit of Internet access for just $50/month.

Longmont Fiber Comic Strip

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The local newspaper notes that some local businesses have already signed on, including a clinic:

Jurey said the city's network is three times faster than the speeds the clinic got before at a cost savings of $1,600 a month.

On November 5, citizens will decide a referendum on whether to expedite the building by issuing revenue bonds without increasing local taxes. A brochure explaining pro and con is available here [pdf]. Approving the bonds means building the network to everyone in a few years while not approving it will mean building the network over several decades.

We recently did a podcast with Longmont Power and Communications Broadband Services Manager Vince Jordan and a local citizen campaigning for the referendum. Listen to that show here.

Read the rest of our coverage about Longmont here.

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