Tag: "charter"

Posted September 2, 2014 by tanderson

Last year, we covered this central Washington city’s first foray into publicly owned fiber optics. The local incumbent, Charter Communications, began charging the city $10,000 per month for services it had been providing for free for a decade as part of its franchise agreement. Ellensburg officials did some quick math and realized that they could save money building their own network.

They ultimately awarded a contract for $960,000 to build 13 miles of fiber connecting various public facilities throughout the city including the police department and Central Washington University. Thanks to Charter’s high rates, the direct cost savings alone could pay for the entire project in about eight years, leaving aside all the other direct and indirect benefits of public network ownership. 

Now, with the original construction project not even quite complete, Ellensburg is already considering expanding to serve residents and the local business community. According to the local Daily Recorder newspaper, the city council has unanimously voted to issue a request for qualifications from contractors for a long term strategic plan.

“Typically, for this type of an activity, (a strategic plan) would include a strengths, weaknesses, opportunities and threats analysis for the telecom utility,” city Energy Services Director Larry Dunbar said. “We would look at different business cases for different service opportunities like providing Internet access to perhaps commercial businesses, perhaps Internet access to the general public. A variety of other service opportunities are possible.”

The new strategic plan is expected to be finished before construction on the current institutional network ends. The construction plan for the institutional network was designed to be “future-ready,” with contingency funds set aside for possible later alterations or expansions. It seems those funds may be tapped sooner rather than later.

The Ellensburg Business Development Authority has been a major advocate of the city’s fiber network, pushing the city to expand it to new areas, offer service to businesses, and look into how it could compete with Charter Communications. As city councilmember Tony Aronica put it:

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Posted July 10, 2014 by tanderson

Whitewater, Wisconsin, a city of just under 15,000 people that sits midway between Madison and Milwaukee, is considering its options for establishing a municipal broadband utility. As reported by the local Daily Union newspaper, members of the city council, the community development authority, other local bodies, and the public met this week to hear a feasibility presentation and discussion with Anita Gallucci, a Wisconsin attorney specializing in broadband utilities.

Whitewater already has some public fiber optic infrastructure, having gone live with their gigabit-capable Whitewater Unified School District network last fall. The network joins up with a larger fiber backbone on the nearby University of Wisconsin Whitewater campus, and has allowed Whitewater schools to increase their connection speeds by 1,200 percent while holding costs steady. The city is now looking at options for how to expand the opportunity brought by such high speed access to the broader community.

Tuesday’s meeting focused on two topics: the legal landscape for municipal broadband utilities in Wisconsin, and the varying levels of success that other Wisconsin cities have had with their own networks. On the legal front, Gallucci affirmed that “municipalities can get into the broadband business if they choose to do so,” but then went on to outline the hurdles created by Wisconsin law that make the process more challenging. From the Daily Union article:

Gallucci said that first, the city must prepare a formal report or feasibility study. The report must cover a three-year outlook which addresses revenues derived from constructing, owning, or operating the utility including such things as equipment, maintenance, and personnel requirements.

Given the upfront costs associated with building out a fiber optic network, a report focusing on a three-year outlook is unlikely to cast a favorable light on the project. Like any other significant investment in public infrastructure, municipal networks may take more than three years to break even. If we used that benchmark for roads, we wouldn't have many.

Wisconsin cities must also go through a...

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Posted April 22, 2014 by christopher

Nestled in a valley in the Colorado rockies, the city of Montrose has voted overwhelmingly to reestablish local authority over whether to build a municipal fiber network. With nearly 20,000 people, Montrose does have cable service from Charter and DSL from CenturyLink but neither service is meeting local needs.

Virgil Turner, Director of Innovation and Citizen Engagement for the City, joins us in episode 95 of the Community Broadband Bits podcast. We discuss the need for a better network and how the big cable and telephone companies have failed to meet local needs.

Montrose has all options on the table as it now plans to engage the public and determine how to move forward with possible investments to improve their access to the Internet.

View our other posts on Montrose here.

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 20 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 Valley Lodge for the music, licensed using Creative Commons. The song is "Sweet Elizabeth."

Posted December 20, 2013 by lgonzalez

Ellensburg is quickly moving forward as it make plans to build a publicly owned fiber optic network. The City Council approved a contract with Canon Construction  on December 16th, reports the Daily Record.

From the article:

Canon Construction of Milton won the contract to lay 13 miles of above- and underground fiber optic cables for the city with a $961,000 bid.

Multiple public organizations, including Central Washington University and Kittitas Valley Fire and Rescue, contract with the city for cable Internet services through the city.

We recently reported on the City Council decision to establish a telecommunications utility serving municipal needs. At the December 16th meeting, they also approved an ordinance needed to move ahead with the utility.

The community network will replace the Institutional Network supplied by Charter Communications. Charter and the City have been negotiating a new franchise agreement with little success. Charter wants to charge $10,000 per month to provide the service that it previously offered at no charge beyond the incredibly valuable access to the public's right-of-way. The City determined building a network was more economical and we suspect the City will also achieve greater reliability and have access to better technology than Charter would have installed.

Posted December 19, 2013 by lgonzalez

Tullahoma Utilities Board's triple-play FTTH LightTUBe, began serving Tullahoma in 2009. The fiber network utility is paying off its city bond debt on schedule reports the Tullahoma News.

The network's income during the first four months of fiscal year 2014 is a positive $58,939. General Manager Brian Skelton spoke with Chris Mitchell in July 2013 and expressed confidence that that network will continue to operate in the black. The News reported on our podcast interview with Skelton and provided some recent updates:

With an estimated potential customer base of 9,000 in the TUB service area, LightTUBe services 3,201 fiber customers. That number is slightly ahead of goal (3,186) and represents nearly 36 percent market penetration against primary competitor Charter Communications.

Tullahoma deployed its network to encourage economic development. In 2011, we reported on J2 Software Solutions. The company located its headquarters in Tullahoma because LightTUBe offered fast, reliable, affordable service. 

According to the News article, expenditures on Internet service remain consistent while subscriptions grow. The Tullahoma Utilities Board (TUB) only recently approved a $7 rate increase for video service due to an increase in the cost of television content. When content rates rose in the past, TUB chose to absorb the increase but the cost of content continues to increase for all providers. Since 2009, TUB increased Internet service speeds five times without increasing prices. From the article:

”LightTUBe is in a very comfortable position from a financial perspective. Our biggest concern at this point is the unreasonable price increases that we (and others in the video business) are seeing from many of our channel providers,” said Skelton.

That comfortable financial position appears to rest largely on the shoulders of LightTUBe’s Internet service.

While video and telephone services together generate enough income to offset the system’s net maintenance and depreciation costs, Internet services generate enough income to offset...

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Posted December 9, 2013 by lgonzalez

Ellensburg, located in central Washington, is considering the pros and cons of a municipal fiber network. A big pro for the community of 18,000 is the ability to predict costs rather than depend on Charter Communications. Charter wants to begin charging $10,300 per month for municipal connectivity it previously supplied at no cost in return for access to the public rights-of-way.

The Ellensburg Daily Record recently reported that the City Council unanimously passed the first reading of an ordinance that will allow the city to establish a telecommunications utility. The city began using Charter's fiber optic network in 1997 as part of the city's franchise agreement. Educational institutions, public safety, and the county public utilities district also use the network. Ellensburg owns and operates its own electric and natural gas utilities. Energy Services Director Larry Dunbar was quoted:

“It’s clearly in the city’s best interest to just build it on its own and own it, compared to leasing it,” he said.

The community needs approximately 15 miles of fiber optic network to replace Charter's institutional network. The two parties are still negotiating and may still reach an agreement for a new contract although the article reports:

In June, Council directed the city to solicit vendor proposals for building a city network, and Dunbar said the city is close to granting the contract.

He declined to share a total cost because contract negotiations are ongoing, but said it makes more sense for the city to build the network now rather than pay in perpetuity, he said.

“A telecommunications network is like a 35-year endeavor,” he said. “If we would have done a lease, we could have bought two or three networks over 35 years.”

Local median KIMA TV recently covered the story:

We would go further and note the many more advantages of owning rather than leasing. When the city owns the fiber network, it can expand it to connect...

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Posted November 18, 2013 by lgonzalez

Dublin, home to 16,000 people, is also home to a network that snakes through the city and parts of Laurens County. In addition to a natural gas utility that serves the region, the city provides connectivity to two area school districts and local businesses. We contacted Guy Mullis, IT Director for the City of Dublin.

The fiber optic network was installed in 1999 to provide connectivity for the two separate school systems in the community, Laurens County Schools and Dublin City Schools. The school districts needed better connectivity because dial-up was the only option at the time. The school districts could not afford the cost of installing their own fiber networks.

The City used its own funds to construct a network that is 85% aerial. Mullis was not an employee of the City at the time, but he estimates the network cost approximately $1.5 - $2 million. He also believes the funds were a combination of capital improvement funds and economic development funds. From the start, the plan has been to serve the schools but also to provide connectivity to spur economic development.

Eight city school facilities and six county school facilities use the network today for connections between buildings. Dublin City Schools have 10 Gbps speeds between facilities; Laurens County Schools have equipment in place for 1 Gbps connections between schools. Both school districts use the Georgia Technology Authority for Internet access.

Once the network was in place, AT&T and Charter Communications began building in Dublin. Mullis says he does not believe AT&T and Charter would have invested in Dublin in 2000 if not for the presence of the community network. He notes that AT&T begin installing DSL in areas of town within a year of the fiber network deployment. 

During the first few years, the City connected its network to the Internet with a 45 Mbps AT&T connection but needs quickly outgrew capacity. The City looked for alternate ways to connect to the Internet. City staff discovered that a major dark fiber backbone ran through Dublin from Atlanta to Jacksonville, Florida. The company that owned the line (the company has since been purchsed by Level 3) allowed Dublin to splice into the dark fiber to connect to Atlanta. The opportunity allowed Dublin to buy...

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Posted October 21, 2013 by lgonzalez

We have followed happenings in Opelika, Alabama, for three years as the community investigated the benefits of a fiber network. They contended with a Charter misinformation campaign and voted yes on a referendum. Construction began in 2012, Opelika Power Services (OPS) tested the network, and recently the Opelika City Council approved proposed rates. 

OANow.com now reports that the FTTH network and smart grid project is ever-so-close to offering triple play services to the city's 28,000 residents and local businesses. 

OPS offers three standard bundled plans, but customers can also customize. All three include voice:

  • Essential - $99.95 - 75 channels, 10/5 Mbps data
  • Choice - $139.95 - 132 HD & SD channels, 30/30 Mbps data
  • Ultra - $154.95 - 207 HD & SD channels, 30/30 Mbps data

Data offerings for customized plans range from 10/5 Mbps for $34.95 to 1 Gbps symmetrical for $499.95.

Voters approved the plan for the $41 million network in 2010. The project included a $3.7 million network hub that houses all OPS offices. The smart grid will help approximately 12,000 OPS electric customers save with efficient electric usage.June Owens, manager of marketing at OPS said it well in an August OANow.com article:

“Fiber is going to put Opelika on the map like never before,” Owens said. “Opelika should be very proud. Nobody in the state is doing a project like this. And there is not much outside the state of Alabama like this. This is 100 percent fiber to the home. Fiber to the house doesn’t require the electronics in the field – this eliminates problems in the field that you might have with other types of...
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Posted September 19, 2013 by christopher

Monticello Minnesota may be located 40 miles outside Minneapolis, but it is the center of the planet when it comes to FTTH competition. We have tried and cannot identify another community localed on planet earth with two separate FTTH networks going head to head across the entire community.

We have long written about Monticello, most recently to look at hypocritical criticism of the project (which gives me an opportunity to note a similar dynamic in Lafayette, Louisiana). And we have covered the disappointing news that the network has not produced enough revenue to make full bond payments.

Short explanation for how Monticello came to be unique in having two FTTH networks: Monticello had poor Internet access from Charter and telephone company TDS. Each refused to invest after local businesses and elected officials implored for better networks. Monticello started building its own FTTH network (Monticello FiberNet) and TDS sued to stop the project while suddenly decided to upgrade its slow DSL to fiber. Lawsuit was tossed out and Monticello finished its network.

In most community fiber networks, the DSL provider seems to fade away because it cannot offer the fast speeds of fiber or cable, so the market basically remains a duopoly with the community network replacing the telephone company (which continues to offer cheap, slow DSL to a small number of customers). But in Monticello, Charter and TDS engaged in a price war, which has really hurt the City's ability to generate enough revenue to pay its debt.

Price wars are very hard on new market entrants because they have to amoritze the cost of their investment whereas the incumbents often have already done so. This means incumbents can almost always offer lower prices if they are determined to do so.

In many communities, we have lacked clear evidence of predatory pricing - that is pricing below the actual cost of service to run competitors out of business. This would violate federal law (if any agency bothered to enforce it)....

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Posted September 12, 2013 by lgonzalez

California's Watsonville, population 51,200, joins the ranks of municipalities considering the benefits of a publicly owned fiber optic network to connect key facilities. At a September 10 the City Council passed a resolution approving plans and calling for an RFP for a next generation fiber network. Bids will be accepted until October 8, 2013.

According to a Register Pajaronian article, the City Council expects the network to cost $480,000. An August 27 memorandum [PDF] provides more detail on the project.

Charter Communications currently provides fiber optic I-Net service to Watsonville local government. The network provides data connections, Internet, gate controls, and security systems throughout the City. The fiber I-Net also provides backhaul for wireless systems for the police department and various remote city locations.

As has happened many in states that have revoked local franchise authority, Watsonville's favorable long term cable franchise agreement with Charter is ending. Charter will no longer provide the I-Net services for no cost as part of its agreement to place its equipment in the public rights-of-way. Instead, it has proposed expensive lease options.

Charter has offered two quotes: $43,115 per year for a reduced level of service and $149,153 per year for the same level of service the city now receives. The memorandum goes on to note that a reduced level of service would require reduction of some uses for the current network, such as eliminating a number of security cameras.

City staff estimates that installation of a next generation network would cost approximately $480,000. They would connect the high school, the City Information Technology office, the Veterans Building, the local reservoir, the library, the airport and the fire station. Watsonville has a significant amount of fiber already in place for use in the citywide transportation system which will reduce the cost of installation. The project will be financed primarily with library and water enterprise funds and other city departments that connect will contribute to the project costs.

When compared to Charter's quote for services...

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