Tag: "tennessee"

Posted June 15, 2010 by christopher

Lafayette Utilities System has filed a complaint with the FCC following what seems to be a rather arbitrary decision by the National Cable Television Cooperative (NCTC) to deny Lafayette as a member. This is a crucial issue for communities that want to build fiber-optic networks, so we will dig in and offer an in-depth explanation.

It all starts with the business model. Fiber-optic networks are fantastically expensive and are expected to be financed entirely with revenues from subscribers. Though communities typically want fiber-optic networks for the broadband capacity, they find themselves having to offer cable television services also to ensure they will attract enough subscribers to make the debt payments on the network.

Unfortunately, cable television services are the most difficult and expensive part of the triple-play (broadband, telephone, cable tv). A community network has to sign deals with different content providers in order to put together its channel lineup. Even a community network with 100,000 subscribers has little power over the companies with channels like ESPN, the Disney Channel, Discovery, MTV, Food Network, and others. Thus, it will have to pay more for those channels than massive networks like Comcast that have many millions of subscribers and therefore a stronger negotiating position. LUS has noted that video programming is the "largest single on-going cost" it incurs in the network.

Enter the NCTC. By forming a cooperative, many small providers (public and private) were able to gain negotiating power over content owners and even hardware manufacturers to cut costs to members by buying in bulk. In recent years, the size of NCTC rivaled that of major national providers like Charter and Cox cable. All three parties stood to gain by bringing Cox and Charter into NCTC in 2009. The addition grew NCTC significantly -- only Comcast has more subscribers currently.

The advantages of NCTC are quite significant and worth reiterating because it is a reminder of the ways in which massive private companies have the playing field tilted in their direction. Without access to NCTC, communities have to pay more for the same content and equipment (NCTC savings may start at 15%-20%. From the complaint:

NCTC market power also enables it to obtain much bigger, better, more flexible, and less costly packages, than any individual small cable...

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Posted June 4, 2010 by christopher

It's fast and it's symmetrical. Chattanooga, the nation's largest muni FTTH network will be offering the fastest residential package in the country by the end of the month: 150 Mbps.

Chattanooga's Electric Power Board (EPB) is ahead of schedule in the fiber rollout, planning to offer triple-play services to all 145,000 residential customers in its electrical territory by the end of the year. Dave Flessner at the Chattanooga Times Free Press covered this story and the paper posted a short audio clip of EPB President Harold DePriest at the press conference.

EPBFi is up to almost 10,000 customers, a number expected to double by the end of the year.

Comcast is responding to this aggressive muni network:

Comcast Corp. remains Chattanooga's biggest video provider and has also increased the speed of its Internet offerings and the number of high-definition television channels and movies it provides for its subscribers.

Tennessee, home to the famous Tennessee Valley Authority that brought the electrical grid the mountains long neglected by the private sector, continues to value public ownership of infrastructure:

Hamilton County Mayor Claude Ramsey likened EPB's broadband expansions to what the Tennessee Valley Authority brought to the region during the Great Depression.

"What is happening today is equivalent to electricity coming to the valley in the 1930s," he said.

I'm guessing this 150Mbps plan is the first of more impressive announcements to come out of Chattanooga as they take advantage of this key community asset. The 150 Mbps press release is available here.

The article also noted a major economic development win in Bristol Tennessee - a $20 million newspaper printing plant that would not have been possible without their muni network. This testimonial is located toward the bottom of the page.

Hyatt [company VP] acknowledged that the high-speed data transfer and reliable fiber optics were the main reasons for locating the facility in the park. This service is essential as companies move deeper into the information age, especially with...

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Posted May 24, 2010 by christopher

According to the local paper, Johnson City, Tennessee, continues to discuss whether its public power utility should build a FTTH network.

As with so many other communities that have only "high speed" cable and DSL options, people are recognizing the importance of broadband on economic development. Local Business leader, Joe Grandy, is the focus of this article:

“Economic development is part of what we’re charged at the Power Board with accomplishing. If the current (broadband) infrastructure is not sufficient to allow economic development to grow this market, something needs to change.”

If the private sector either isn’t willing or isn’t able to create adequate infrastructure, Grandy said, “then an entity such as the Power Board may need to.”

Tennessee cities without publicly owned networks may find themselves in an even tougher bind than similar communities elsewhere. With Jackson, Bristol (TN and VA), Chattanooga, Pulaski, and others, businesses do not have to move far for great networks run by the local public power company.

Grandy, though, “doesn’t think there’s any question” that the Johnson City area will reap the whirlwind, economically speaking, if it fails to scale up local broadband capability. He has been involved in the recent search for a CEO to run the metro area’s new Economic Development Council, and a half-dozen candidates who visited early this month made it abundantly clear that broadband capability is as important an issue today as dependable electricity was 80 years ago.

Public power transformed Tennessee. Publicly owned broadband may be necessary to keep it transformed.

Posted April 5, 2010 by christopher

Recent letters in the Chattanoogan reflect frustration with the cable incumbent, Comcast, and the ease of switching to the publicly owned EPB Fiber network. This is one of them:

My Comcast exit was very easy. Step one: Make appointment to have EPB Fiber service installed. Step two: Put all Comcast receivers and remotes in a box and hand it through the "teller" window at the Comcast office. Step 3: Ask for a receipt from the nice lady to whom I handed the box. Step 4: Receive my Comcast credit balance check in the mail and open it while watching TV on the EPBFI system. I never even had to speak to a Comcast phone rep in India.

A previous round of letters discussed several of the ways the publicly owned network is superior to Comcast, though one customer complained that EPB Fiber was too expensive, compared to Comcast's introductory and temporary rates (incumbents like Comcast typically negotiate rates in response to competition without advertising the reduced rate - so customers who are willing to haggle over the phone may find cheaper prices from a private company willing to lose money to deny customers to competition).

One reader noted how fast the local, publicly owned network installed the network.

I left shortly after that call [ordering service] and returned a couple of hours later from grocery shopping. EPB contractors had already been to my home and installed the boxes on the side of the house. Yes, super fast service.

The day the installers came to complete the inside installation, they were on time, courteous and knew just what needed to be done to complete the install. One of the men even told me of a problem with my A/C heating unit duct work underneath my home which needed to be looked about soon. The men cleaned all the areas they worked in, made sure all my services worked correctly and asked if I had any questions they could answer before they left. Both men did a fantastic job and worked quickly to complete the work.

Posted March 12, 2010 by christopher

Pulaski's public power provider is building a FTTH network and already seeing efficiency gains on the electrical side of their operations. Pulaski has 15,000 electric customers and 5,000 have been passed by fiber, with 1600 taking telecom services. Like Chattanooga, they are using a combination of wireless and fiber for smart-grid applications. Those who take telecom services are used to aggregate the wireless signals from neighbors who do not have a fiber line to their home. This is a great article to read for those curious about the benefits of smart-grids and how wireless can be successfully combined with fiber backhaul (as well as why wireless alone is insufficient).

Posted February 15, 2010 by christopher

Carol Wilson speaks with Jackson's Michael Johnston about JEA's triple-play network in Tennessee. As far as I can tell, this interview took place in September, 2009. Johnston reports that the publicly owned network passes 30,000 residences and about 5,000 businesses. Of those taking cable services locally, 60% subscribe to JEA and half of them are taking multiple services. Jackson started as a purely open access network but has transitioned to offering retail services. At that point, they were starting to use the network to create a smart-grid for the electrical side of the utility.

Posted December 15, 2009 by christopher

The Jackson Energy Authority (JEA) network now has over 16,000 subscribers and offers speeds up to 100 Mbps for local businesses and 25 Mbps for standard residential users.

Jackson is considered one of the most technologically advanced cities in the U.S. We have four competitors in the market with AT&T, Bell South, Charter and JEA. We computed that over $8 million to $9 million has been saved by residents in this city when compared to other cities of its size because of the competition.

These are the kind of hard-to-quantify savings that too often go unnoticed in discussions about the value of publicly owned broadband projects. What is the value of competition? How much economic development has occurred directly from the JEA network and indirectly from the lower prices and greater investments that result from competition?

Posted November 19, 2009 by christopher
  • Communities around Rutland in Vermont are moving forward with a planned universal full fiber-to-the-home network. Interestingly, this network has been spear-headed by the Rutland Redevelopment Authority, not a local City Hall.

  • Back in Tennessee, the Clarksville Fiber Network is running ahead of schedule.

    logo-cdelightband.png

    Having reached the 6,000-customer mark, CDE Lightband's broadband service is slightly ahead of schedule in adding new subscribers, an official of the Clarksville utility said Wednesday — good news for a telecommunications division, which is still in its infancy.

    Initial projections had the utility servicing around 8,000 broadband subscribers by next June.

    ...

    New installations usually have about a six-week wait, primarily because of high demand, Batts said.

    Though demand is high, the goal of profitability is still a ways off — around 4,000 additional customers are needed to push the utility's telecommunications into the black, according to early department projections.

  • Seattle's new mayor campaigned on building a publicly owned, full fiber-to-the-home network. Reclaim the Media asks if Seattle will get its broadband 'public option.'

    As Reclaim the Media noted last summer, the main obstacles to moving forward with next-generation fiber to underserved areas in Seattle are (1) money and (2) political will. The city budget remains in slash-and-burn territory this year; next year's budget would be the earliest that the new Mayor would be able to effectively push a significant new priority. This winter, however, Schrier's office will be able to apply for federal broadband stimulus funds to build out the skeleton of a citywide fiber network (possibly in collaboration with Seattle City Light), and to provide actual door-to-door "fiber to the premises" (FTTP) service to underserved neighborhoods in the Central District and Beacon Hill. McGinn's leadership will be key in making this project happen.

    Following...

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Posted October 13, 2009 by christopher

Not too far away from Chattanooga, Tennessee, (home to the largest muni fiber network in the U.S.) lies Cleveland (Tennessee). Five prominent residents asked why they cannot get broadband:

The homeowners have discussed the problem with Charter Communications Director of Government Relations Nick Pavlis three times.

Pavlis said in a telephone interview it would cost the cable company $130,000 to run an underground cable 2 1/2 miles and “it’s just not a reasonable payback.”

He said the company spends $500 per house as a general rule, which gives them a 36-48 month return on investment.

Yet Charter has no problem lobbying the states to prohibit publicly owned networks. Tennessee probably has more fiber-to-the-home initiatives than any other state - perhaps it is time Cleveland looked into their own or cajoling a nearby network into expanding.

Posted September 30, 2009 by christopher

On the Daily Yonder - offering coverage of rural issues - Craig Settles offers advice to community networks on the need to attract institution and business customers because networks rarely generate enough revenue to make debt payments by focusing solely on residential subscribers.

When communities compare the costs of different technologies, they often get too caught up in the upfront costs and ignore the ongoing costs (operating costs, or opex). He offers an example of a modest wireless network:

It’s important to understand that while it costs a lot of money to create a broadband network, over a five-to-ten-year period, it costs even more to operate that network than to build it. Say it costs $1 million to build a wireless network. During the municipal wireless heyday, it was estimated to cost 20% of buildout expense to operate the network annually – to pay for customer service, maintenance, upgrades, etc. That’s $200,000 a year.

This is a great intro article for those who may not be used to thinking about the economics or business plans networks need.

For the rest of us, it is a strong reminder of how many networks start (and a good path for those who want to create a network):

Santa Monica, California, had a legacy PBX phone system and slow connection circuits from incumbents. The city pooled money it was already paying for voice and data services, using this capital to build a fiber network and implement new communication technology.

City CIO Jory Wolf states, “By switching to fiber we realized a $500,000 savings in data circuits and $250,000 savings in voice circuits, all of which stayed in our fund. Ongoing savings enabled us to provide our police with video streaming in their vehicles. We have excess bandwidth, so we provide (a) large number of sites with free wireless access.” Wolf said that the city is also selling companies fiber lines that haven't yet been turned on. “Our network budget is self-sustaining,” he said, “and I have $2.5 million in capital.”

I remember Tim Nulty saying that Burlington Telecom started the same way. They figured out how much they were paying each month for telecom as a city. They used that number to compute how much they could spend...

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