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Madison, Wisconsin, Gets Serious About Municipal Fiber

The City of Madison, Wisconsin is one step closer to constructing a citywide municipal fiber network after obtaining the results from a broadband feasibility study. The consulting firm hired in December 2015 recently completed the study and made it available to the city’s Digital Technology Committee and the public.

The report recommends Madison build an open access dark fiber network and engage a partner to offer services to subscribers via the infrastructure. Westminster, Maryland, and Huntsville, Alabama, use the same approach with partners Ting and Google Fiber. Madison’s network would build on the existing Metropolitan Unified Fiber Network (MUFN), a smaller fiber network that was funded with stimulus dollars through the 2009 American Recovery and Reinvestment Act (ARRA). It connects public institutions such as the University of Wisconsin, Dane County, hospitals, K-12 schools, and DaneNet, which is made up of 28 community groups serving low income families and seniors. 

Consultants suggest Madison retain ownership of the infrastructure in order to maintain control of the asset and the city's future connectivity. The City would fund the $150 million cost of building a dark fiber network and their private partner would contribute an estimated $62 million to connect properties. Consultants envision the partner responsible for cable to residences and businesses, network electronics, and consumer electronics, bringing the total cost for the project to approximately $212 million.

"Now here’s the key: that’s a lot of money. The report talks about how to get it and we can bond and do a lot of other things, but it basically says to make this happen, you need a private partner," said Barry Orton, a member of the Digital Technology Committee. Orton went on to say that a more specific cost estimate, including identification of partners, would be forthcoming, as soon as Spring 2017.

An Ongoing Project

While the study reveals significant interest in a municipal fiber network, city officials recognize that big corporate incumbents keep a strong hold on the state's legislative landscape.

“All they are doing is recycling customers,” said Madison Mayor Paul Soglin of big incumbent Internet Service Providers (ISPs) in the feasibility study press conference.

“They aren’t stepping in, providing the kinds of service that this world needs in the next decade. Not in the next 100 years, now. And so we’re working on a considerable handicap in Wisconsin because of the success the industry lobbyists had in writing the legislation for our Legislature. But we do have the ability, which you are about to see in the report, on how we can take Madison into the 21st Century and do it rapidly.”

Madison has discussed residential broadband access for several years and in 2013 established a Digital Technology Committee to address the city’s digital divide. The committee first looked into universal wireless access, but determined an open access citywide fiber network would better fit the city’s needs. They went on to establish a fiber pilot in four low-income neighborhoods.

Open access fiber networks offer several advantages over fixed wireless models, including longevity and the potential for meaningful competition. In an open access network, multiple ISPs can compete to provide service to residents via the Infrastructure, which leads to better customer service and more affordable rates. In a fixed wireless model, a city typically contracts with one ISP.

Survey Results: The People Want Fiber

Madison’s fiber pilot program is still under construction but all eyes are on the feasibility study. While pilot programs are a good way to obtain data about the interest in a community, Madison may not need to wait for data to begin pursuing a municipal fiber network.

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The study commends the pilot program for its role in promoting resident trust in the city as an infrastructure provider, but the survey results suggest demand for citywide fiber access already exists.

While most respondents report they have access to the Internet through a wired connection at home (89 percent) or through a cellular device (77 percent), those numbers drop significantly for low-income respondents: 24 percent of households making $24,000 or less have no Internet access at all.

As for willingness to choose a high-speed connection, the majority of residents would be willing to switch from what they have (cable or DSL) if the price were under $50 per month, even with a one-time hook up fee of up to $250.

Moving Ahead

In 2011, Wisconsin Governor Scott Walker’s administration turned down $23 million in federal funding to improve Internet access, citing “too many strings attached” to the grant. More recently, the state made $1.5 million available to incumbent ISPs to expand service in rural areas; they claim funding will improve service for about 8,500 households. Given their track record of unfulfilled promises, Wisconsinites aren't holding their breath.

Some federal funding for fiber is available, and Barry Orton suggested that Madison expects more will be available after the 2016 election. “We might be, next spring, shovel-ready for whatever federal money is possibly available for cities to pursue these kinds of things,” said Orton in the feasibility study press conference.

“It’s not going to be easy,” said Mayor Soglin. “We’re going to have to deal with the cumbersome burdens created by State legislation, which is designed to protect existing companies and keep us away from doing this. But it will actually introduce real competition, not to mention a level of service imagined by only a handful of cities in the world.”

I-Net Beginning to Blossom in Greenfield, WI

Greenfield city officials and school administrators recently agreed to cooperatively build a fiber-optic institutional network (I-Net). The Milwaukee suburb of about 37,000 expects to trim thousands of dollars from its annual network bill and bring its students, teachers, and local government up to speed.

Dig Now, Save Now

Just like many communities across the U.S., Greenfield realized that it was paying too much to connect its community anchor institutions (CAIs) to the Internet. In April 2015, Greenfield school district approved a bandwidth upgrade with a private provider that would cost the schools $45,588 annually. Within half a year, they had already hit their new bandwidth limit. In November 2015, they needed to upgrade again to the tune of $119,141 per year. 

With classrooms and public institutions demanding increasingly higher bandwidth, local officials decided to ditch the incumbent providers to build a fast, affordable, reliable network in the coming semester. Their investment will allow them to make long-term budgeting decisions, direct more money toward classroom expenses, and use technology to offer rich educational experiences. 

Construction started in June on the fiber-optic network that will connect Greenfield school district, neighboring Whitnall school district, Alverno College, and Greenfield public safety buildings. With installation slated to finish by summer’s end, local institutions expect immediate savings. 

Financial Terms

The City of Greenfield, Greenfield School District, and Whitnall School District all applied for state trust fund loans through the Board of Commissioners of Public Lands of Wisconsin (BCPL). 

Michael Neitzke, Greenfield’s mayor, expects the town to repay it share - a $700,000 loan from BCPL - within 10 years thanks to annual telecommunications savings. The school districts anticipate even shorter repayment periods. Officials at Greenfield School District expect to pay off their loan within 4 years, according to Superintendent Lisa Elliot.  The School District of Whitnall authorized a $440,000 loan from BCPL with a 5-year repayment term at an interest rate of 2.5 percent. 

More Than Just Money

Greenfield hopes its network will impact the community beyond the balance sheet. In addition to blazing fast download speeds, fiber-optic networks feature faster upload speeds that shorten data transfer times, opening the door to a variety of indirect benefits for public safety and education. Greenfield Now quoted Nietzke, who said: 

“Benefiting most in local government are police and paramedics... Police especially depend heavily on getting data and lots of it. Based on the increasing need of law enforcement, an upgrade of this kind would have been made, anyway.”

The school districts are also excited for new possibilities. Greenfield and Whitnall will consider sharing the costs of virtual classrooms, where students in either district could attend classes via the Internet. Their partnership with the city will allow the school districts to save substantially on telecommunications costs; school officials can direct funds toward educating students, maintaining infrastructure, or other important necessities.

Ottawa, Kansas, and Monticello, Illinois, are two other communities where schools and local government have teamed up to save public dollars while simultaneously obtaining better connectivity. Schools can use federal E-rate funds to pay for the cost of Internet infrastructure investment, reducing the overall cost for deployment. Money saved by lowering telecommunications costs can later be re-invested. When a city strategically locates fiber-optic rings, they can later expand their network to serve other CAIs, businesses, or residents.

Regardless of how far Greenfield eventually takes their network, these first steps will result in significant cost reduction and a valuable publicly owned asset.

Broadband Communities Regional Conference This Fall In Minneapolis

"Fiber For The New Economy" will be the theme of  Broadband Communities' annual regional conference which is scheduled from Oct. 18th to 20th in Minneapolis.

The conference will explore the hottest developments in fiber and economic development with panel discussions and workshop sessions on such topics as Google Fiber, incumbent and other provider deployments, and public-private projects, according to Jim Baller, the conference’s economic development chairman.

There will also be sessions about developments in “major verticals,” including health care, education and energy, adds Baller, who is also co-founder and president of the Coalition for Local Internet Choice

The conference will focus on broadband activities and projects in primarily Minnesota, Wisconsin, Iowa, North Dakota, South Dakota, Nebraska, and Montana, as well as western Ontario and Manitoba. 

The Blandin Foundation is assisting Broadband Communities with content and conference planning, a move that means the Minnesota non-profit will have a much smaller fall event of its own, said Bernadine Joselyn, Blandin Foundation director of public policy and engagement. Blandin’s fall conference is scheduled for Sept. 13th and 14th in Duluth.  For further information, go to the event website.

Key facts on the Broadband Communities’ Conference

What: “Fiber for The New Economy”

Where: Radisson Blu Downtown Hotel, 35 S. Seventh St., Minneapolis, Minnesota  55402.

When: Oct. 18-20, 2016

Register online for the conference at the event website. Check back in the future with the main event page for more as the agenda is set.

Sun Prairie Utilities' Pilot Project Shows Way to Better Connectivity

Welcome back to Sun Prairie, Wisconsin. This town has brought to light the shocking stories of slack service from incumbent providers, the complicated decisions of community representatives, and the hopeful beginning of a fiber-to-the-home (FTTH) network

The City Council has just approved $16,000 to hire an engineering consultant for the estimated $27-35 million citywide plan. 

In the Pilot Project, So Much Demand!

In July 2015, City Council approved the $624,000 plan for the pilot project, but several factors brought the actual cost up to about $653,000. The pilot project area included the neighborhood Smith's Crossing, the Main Street Corridor, and the TIF District 9 area. 

Sun Prairie Utilities first slated the project for completion in early December, but that underwent several delays. For instance, an over-booked contractor started on the project a month later than expected. Meanwhile, rocky soil conditions and high-demand slowed the pace of construction while raising costs. The Sun Prairie Utilities Manager Rick Wicklund will present the final costs for the pilot project this month. 

The original budget had assumed a 30 percent take-rate that would see a positive cash flow in three years. In actuality, 54 percent of households in the pilot project area are requesting the services.

Forty-three percent have requested the 100 Megabits per second (Mbps) for $49.98 each month while 11 percent want the higher-speed service of 250 Mbps for $69.98 each month. The capital expenditure of these unexpected last mile connections brought the cost up, but the extra revenue from these connections will certainly help offset those costs. 

Pilot Project Teaches Lessons

In building the pilot project, the city council sought to learn if a municipal citywide FTTH network would be possible. With the overwhelming demand for Internet service in the pilot project area, a citywide network may be in the cards for this community of 29,000. 

The recently hired consultant will help determine the feasibility, while the city utility department will apply lessons from the pilot project. The city utility will continue to capitalize on their successes of the pilot project. Their outreach strategy worked very well, ensuring the high take rate, as Wicklund explained

“We did a really good job of marketing and contacting everyone, having neighborhood meeting and getting everyone excited about it, that has a lot to do with the high take rate.”

Reedsburg Utility Commission Receives State Grant for Expansion

In April 2015, Wisconsin's Brett Schuppner from the Reedsburg Utility Commission (RUC) had a conversation with Chris about the utility's plan to expand the municipal fiber network. Funding is one of the biggest challenges but in December, the RUC learned that it a state grant will help move those plans forward.

WisNews recently reported that the RUC applied for $110,000 to bring the triple-play fiber network to Buckhorn Lake in Sauk County. The Wisconsin Public Service Commission announced on December 11th that the RUC will instead receive $69,300 which will allow the network to extend to an additional 105 homes and 40 properties. From the article:

Schuppner said an informal survey of members of the Buckhorn Property Owners’ Association suggests the utility commission will likely recover its out-of-pocket costs for the project not covered by the grant of about $40,000 from new users in the first year.

RUC began serving the community in 2003, expanding in 2011, and offering gigabit service in 2014. The community is located about 55 miles northwest of Madison and home to approximately 10,000 people.

Ten other entities across the state also received grants. RUC anticipates construction to begin on this expansion early this year.

Madison, Wisconsin Pilot: Fiber In The Fall

Four low-income neighborhoods in Madison will soon have access to fast, reliable, affordable Internet access, thanks to a municipal fiber-to-the-home (FTTH) pilot program.

Fast, Affordable, Reliable...Soon!

According to a recent Cap Times article, installation will begin in the spring of 2016; community leaders anticipate the network will start serving residents in the fall. The cost of the pilot is estimated at $512,000. The original plan was to offer the pilot in two areas, but in the City Council recently approved an amendment to the city budget to cover the cost of expanding the pilot. Funds for the construction will come from the city's capital budget.

When the city first released its RFP, it received 3 proposals. Ultimately, the city selection committee chose the only FTTH proposal over two wireless proposals, citing reliability and speed as determining factors. Local Internet service provider ResTech will build the network, which will be owned by the city. Residential subscribers will have access to a minimum 10 Megabits per second (Mbps) download and 10 Mbps upload (symmetrical) service for $9.99 per month. There will be no data caps.

Testing the Waters

The Cap Times reports that the results of the pilot will determine the next steps for the city, population 243,000, which has flirted with the idea of a citywide municipal network in the past:

In conjunction with the pilot, Madison will be pursuing a feasibility study and cost-benefit analysis to determine whether to expand the Internet service to other parts of the city in the future.

The city is working with Columbia Telecommunications Corporation for the feasibility study component as a parallel track to the pilot.

The pilot will be two years, and [Chief Information Officer Paul] Kronberger said they hope to have enough data to do the cost-benefit analysis after about one year of operation.

$117,000 Broadband Service Disaster From Charter

Shocking horror stories about incumbent ISPs reaching new lows for poor service are now so common that they have become routine. A story from Ars that recently went viral puts a human face on the frustration millions of Americans endure just trying to determine if Internet access is available where they choose to live. First, here is the gist of the story.

Cole Marshall, a work-from-home web developer, decided he wanted to build a new home on the outskirts of Sun Prairie, Wisconsin. While scouting properties, he confirmed with local incumbent ISPs Comcast and Frontier online and by phone that they could offer sufficient Internet access to his favored lot.

When Marshall completed construction and contacted Charter, the cable company offered to provide the service only if he paid $117,000 to extend their network to his home. And Frontier? Frontier mislead him too, pricing the job at $42,000 to bring him the 24 Mbps service they’d promised they could provide. 

When all was said and done, Charter couldn’t provide affordable service at all. Marshall is now stuck with Frontier’s sloth-like DSL broadband speeds of 3 Mbps download / 1 Mbps upload for all of his small business needs. These speeds fall well short of the 25 Mbps download / 4 Mbps upload the FCC defines as “broadband.” 

Marshall’s story illustrates well the problems with existing broadband services in and around the city of Sun Prairie that led citizens and city leaders to recently pass a resolution to build a municipal broadband network in some areas within the city limits. While Marshall’s address is outside the purview of Sun Prairie’s planned network buildout, the potential for future expansion of this publicly-owned network may be Marshall’s only hope for a solution to his broadband connectivity problems.

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Frontier and Charter officials told Sun Prairie city leaders in June during the network’s planning phase that their plans to build a municipal network were misguided. At that same meeting, Frontier and Charter also warned that they would likely cut jobs if the city chose to build the municipal network.

When Alderman Hariah Hutkowski asked Frontier and Charter officials if they would build a fiber-optic network so the city wouldn’t have to, the incumbents offered no response. Hutkowski called them out:

“What I see is that you will provide just enough to people to make a profit, but our community has other needs, we have demands through schools, residents streaming service, and demand is moving toward higher capacity,” Hutkowski said.

The people of Sun Prairie, a city of about 31,000 just outside of Madison, simply want reliable broadband service from an organization that will operate with basic accountability to its customers. With the private ISPs refusing to provide that service, their pleas to stop a municipal network deployment ring hollow.

Marshall's story highlights at least two problems we see repeatedly across the United States. First, there is highly inadequate or nonexistent broadband service access at non-competitive rates across the country and private ISPs see no financial incentive to help. Second, it underscores common complaints about incumbent ISPs making terrible customer service errors that suspiciously resemble predatory bait-and-switch behavior. Once again, the consumer is caught in the middle as these two problems collide with disastrous results.

USDA Broadband Funding for Rural Projects; Coops On Top

This past July the USDA announced over $85 million in funding for rural broadband projects across seven states. The projects, many awarded to rural cooperatives, aim to bridge the digital divide and expand economic opportunities. For those interested in federal funding opportunities, NTIA has just released this guide [pdf].

Rural areas are often passed over by big telcos because they are considered less profitable. Farming, however, is a high-tech industry, and Agriculture Secretary Tom Vilsack believes that Internet access is as necessary as electricity in rural areas:

"Broadband is fundamental to expanding economic opportunity and job creation in rural areas, and it is as vital to rural America's future today as electricity was when USDA began bringing power to rural America 80 years ago. ...  Improved connectivity means these communities can offer robust business services, expand access to health care and improve the quality of education in their schools, creating a sustainable and dynamic future those who live and work in rural America."

The USDA has awarded more than  $77 million in Community Connect Grants for rural broadband projects (since 2009). This July, the USDA loaned $74.8 million and awarded another $11 million in Community Connect Grants. Here is the current round-up of the USDA’s most recent loans and grants:

Alaska

Arctic Slope Telephone Association Cooperative Inc. will connect Point Hope subscribers and prepare for an undersea fiber line with a $1.4 million grant.

Minnesota

Garden Valley Telephone, one of the largest coops in Minnesota, will continue to expand its FTTH service area with a $12.63 million loan. On average, the coop serves two households per square mile.

Consolidated Telephone, another coop, will perform upgrades and add a new fiber ring to allow for greater bandwidth with a $12.27 million loan.

Northeast Service Cooperative will receive two $3 million grants and, through a partnership with the Fond du Lac Band of Superior Chippewa, provide broadband service on the the Fond du Lac Reservation.

Montana

Triangle Telephone Cooperative Association will upgrade their system with fiber through a $29.95 million loan.

Oklahoma

@Link Services will receive $1.5 million in grants to provide broadband services in Seminole County.

South Carolina

FTC Communications will improves its wireless to 4G/LTE with a $12.38 million loan.

Virginia

Scott County Telephone Cooperative, with a $2.1 million grant, will provide one gigabit to 540 locations in Dickenson County to increase economic development.

Wisconsin

LaValle Telephone Cooperative will use a $7.61 million loan to deploy fiber.

It is no longer surprising to find faster, more affordable, more reliable Internet networks in rural areas served by coopertives. Minnesota's Farmers Mutual Telephone CooperativeCo-Mo Cooperative central Missouri, or Farmer's Telecommunications Cooperative in Alabama are only a few we have covered. As large corporate providers fail to provide modern services, rural cooperatives have stepped up to offer services to their members and improve economic development prospects in the communities they serve.

New Reference From U-W Extension A Library Must-Have

The University of Wisconsin-Extension recently released Broadband Policies and Regulations for Wisconsin Stakeholders, a good addition to your digital library, especially if you have in interest in Wisconsin and midwestern broadband issues.

The document provides case studies and an in-depth list of references addressing:

  • Public-private partnerships
  • Local ordinances
  • Technology councils
  • Community engagement
  • Local government telecommunications services
  • Unique efforts to increase adoption

While many examples hail from Wisconsin communities, the authors also provide information from other states and offers links to information such as local government broadband resolutions, tower agreements between municipalities and private internet service providers, successful applications for state and federal grant funds. 

The Broadband Policies and Regulations for Wisconsin Stakeholders is well organized and indexed. You can download the PDF, or access the online flip book for quick reference.

Sun Prairie Passes Resolution to Begin Initial Stage of Fiber Project

On July 21, the City Council of Sun Prairie, Wisconsin passed a resolution to fund construction on a segment of what could become a citywide, high-speed fiber optic project. Construction will take place in the city’s Smith’s Crossing subdivision, parts of Main Street, and the Tax Increment Finance (TIF) District 9/St. Mary’s development area. It is slated to begin in early September and last through December 1, weather permitting, and will cost an estimated $640,000.

The mayor of Sun Prairie, Paul Esser, believes that going through with this project is the correct move for the City. He was recently quoted in the Sun Prairie Star

Moving ahead with the pilot project in Smith’s Crossing is the right way to go. I believe that as an early adopter of this technology we will have an economic development advantage which will attract companies that require this broad bandwidth.

The fiber-to-the-premises (FTTP) construction at Smith’s Crossing is seen as a testing ground for a larger FTTP network construction that would extend 200 miles of fiber and have the potential to connect all of the city’s homes and businesses. Currently Sun Prairie has about 30 miles of fiber. If Sun Prairie can successfully build out this citywide network - costing an estimated $26.7 million for the whole city - it could rival that of Reedsburg, Wisconsin, which began construction on its fiber-to-the-home network in 2003. Reedsburg has seen numerous economic development benefits and has created a considerable amount of community savings from lower prices.

The city of Sun Prairie initially invested in fiber optic technologies in 1999. In that year, the City built a fiber ring for the school system. Rick Wicklund, the manager of Sun Prairie Utilities, estimates the fiber ring will save the school $2 million by 2019. The fiber also runs to about 28 businesses and more than 130 Multiple Dwelling Units (MDUs), according to Wicklund. Now, Sun Prairie Utilities is looking towards residential markets. 

Officials are calling the Smith’s Crossing construction a “pilot program.” They chose the location on account of its pre-existing physical infrastructure and population density. According to the Sun Prairie Star:

Wicklund said Smith’s Crossing is a good location because the neighborhood has existing ducts through the subdivision and is a dense area with positive demographics for the service: those who have dropped phone land lines and cable.

An upgrade to fiber could be exactly what Sun Prairie residents need in order to stimulate economic development and attract businesses to the city, which sits just more than 10 miles from the college town of Madison. Sun Prairie residents are currently served by incumbents Charter and Frontier - ISPs that rely on outdated technologies unable to provide the gigabit speeds that fiber can supply. Sun Prairie Utilities initially wondered if these incumbents might be willing to build a fiber optic network themselves, but they were unwilling to offer fiber optic services. City alder John Freund, speaking in 2014, indicated the incumbent’s unwillingness to make the switch to fiber:

It was a good conversation and certainly as we looked at partners they would be the most likely partner in the community, but it was pretty clear that they weren't interested in taking this project on themselves and providing us this service at no cost to the city. 

Now, it appears these industry competitors are actively opposing the proposed municipal network. In early July, incumbent ISPs pitched city officials about the negatives and past failures of municipal projects. As the Star reported earlier this month:

Industry competitors spent more than 90 minutes telling city officials why it’s a bad idea, highlighting failures in other municipalities, questioning the utilities’ ability to handle operations, and even hinting, if it goes through, they’ll cut jobs in the Sun Prairie area. 

Incumbent pressure is nothing new for municipal networks, but it is more unsettling in the case of Sun Prairie, where City officials have gone out of their way to work with these companies - as we reported back in January of 2014. Incumbents often threaten to invest less if faced with a municipal network, but an increase in competition often spurs more investment, not less, as they suddenly fear losing customers that have a real choice in providers.

Wicklund believes that the pilot project would be cash positive within three years if it can achieve a 30 percent take rate. According to a feasibility study, a city-wide network would be cash flow positive by year four and net income positive by year six, assuming a 35 percent take rate across the 13,500 homes passed.