The fiber-to-the-farm initiative in Sibley County, Minnesota, has completed the feasibility study and the towns involved are discussing a Joint Powers Agreement. One of the impacted incumbent providers -- Frontier Communications, a rural telco famous for slow DSL) -- has started to spread the usual FUD (fear, uncertainty, and doubt) that is common whenever a massive company is about to face competition.

Though I am tempted to comment directly on Frontier's letter, I'll let the community's response stand on its own. The way they misrepresent the record of Windom should be instructive - this same misinformation strategy is used around the country.  We believe publishing these scare tactics and responses to them is helpful to everyone -- so if your project has received one, please let us know.

Frontier's Letter:

Dear Commissioners:

As a provider of telephone, internet, and video services to our customers in the Green Isle, Arlington, and Henderson areas, Frontier Communications is obviously interested in the "fiber to the home" proposal that has been presented. As a nationwide provider, Frontier is aware of other efforts by municipalities of various types to build and operate their own telecommunications network. While these proposals are always painted in rosy tones, it is important for officials to carefully review the underlying assumptions and projections that consultants make when presenting these projects. Unfortunately, history tells us that the actual performance of most of these projects is significantly less positive than the promises. Often times, these projects end up costing municipalities huge amounts of money, and negatively impact their financial status and credit ratings.

A nearby example would be WindomNet, the city-owned network in Windom, Minnesota. That network, which provides telephone, internet, and video service, began in 2005. The financial results to date have been poor; operating losses of $662,000 in 2006, $1,257,000 in 2007, $326,000 in 2008, and $93,000 in 2009. Additional borrowing by the city was required to make up those losses.

Another example is the city-owned network in Burlington, Vermont. Burlington Telecom was begun with high hopes in 2003, to offer...

As Salisbury prepares to officially launch its publicly owned FTTH network offering triple-play services, it offers lessons for other communities that want to follow in its footsteps. As we wrote a month ago, Fibrant has candidly admitted it cannot win a price war with incumbents. Companies like Time Warner Cable have a tremendous scale advantage, which allows them to price below cost in Salisbury because the large profits from all the non-competitive markets nearby can subsidize temporary losses.

On October 10, the Salisbury Post ran a story "Fibrant can't match cable company specials." Alternative possible titles for the article could have been "Cable Co cuts prices to drive competition from market," or "Time Warner Cable admits customers pay different prices for same services." Interestingly, when Fibrant unveiled its pricing originally, the headline read "Fibrant reveals pricing" rather than "Fibrants offers speeds far faster than incumbents."

A lesson for community networks: do not expect the media to cover you fairly. The big companies have public affairs people with relationships with the press and they often buy a lot of local advertising. This is not to say all local media is bought off -- far from it -- but local media will have to be educated about the advantages of community networks.

Quick question: When you hear this quote, who do you first think of?

"We always work with customers to meet their needs and budget."

The cable company, right? Well, that is Time Warner Cable's claim in the above Salisbury Post article. Later in the article, a local business owner expressed a different sentiment: "Time Warner has the worst customer service I have ever dealt with."

The business owner goes on:

“Fibrant may have these same kind of issues, however I can actually go to the source to deal personally with someone who is vested in the community, not spend two hours on the phone and never solve the problem as I do with TWC,” he said.

“Even if pricing is higher, I would make the change. Price is important, but quality and service is tantamount.”

Speaking of the services...

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More towns in Utah are deciding whether to support UTOPIA's new plan to expand the network and recover from the significant errors of the first managers. Under the new management, UTOPIA has added new ISPs and thousands of new subscribers, a significant turn around for a network many had written off as a failure.

Unfortunately, UTOPIA has too much debt and no capital to expand the network to bring new subscribers online. As we have consistently maintained, building next-generation networks is challenging in the best of circumstances - and the circumstances around the towns in Utah are far from ideal.

Most of the information in this post comes directly or indirectly from the Free UTOPIA blog which has excellent independent coverage of the network (as well as stinging critiques of wasted opportunities like the broadband stimulus).

I strongly recommend following FreeUTOPIA, but I wanted to comment on some of the recent developments.

As UTOPIA and some member cities have formed a new agency to fund further expansion. Five cities have agreed to be part of the new Utah Infrastructure Agency with at least 2 deciding against and more still considering what they want to do. The Salt Lake Tribune has tepidly endorsed the plan (which involves some changes regarding rogue providers - something I want to follow up on).

The Utah Taxpayers Association (which is funded by Qwest and Comcast, among others) decided to mount a big protest in Orem to convince the City to abandon UTOPIA. Rather than simply waiting to see what effect the rally would have, UTOPIA responded decisively.

The Utah “Taxpayers” Association thought it would get an upper hand with a BBQ in Orem just before the city council voted on a new construction bond. Unfortunately for them, the plan backfired when UTOPIA made a surprise appearance at the event with their “mobile command center” and started actually talking directly with...

Australia is planning to build a nationwide open access network that will be owned by the public. Ars Technica recently covered their progress - Australia has released a consultant report on the proposed network.

If the major incumbent, Telstra, works with the government on the network, the costs will be lower. But Australia will not let Telstra dictate the terms of their relationship:

But it's clear that the new network won't be held hostage to Telstra's demands. The consultants conclude that, in the absence of an agreement, [the fiber network] should proceed to build both its access network and its backhaul unilaterally." [src: Ars Technica]

Between the original plan and a revised plan suggested by the referenced study (bullet points here), over 90% of Australians will have a real choice in providers over a FTTH connection whereas the rest will have a combination of wireless and satellite options. The prices are expected to be affordable, and will probably be well below what we pay here in America.

The Implementation Study has some words about ownership of the National Broadband Network (NBN):

Government should retain full ownership of the NBN until the roll out is complete to ensure that its policy objectives are met – including its competition objectives

On technology, they reiterate what we have been saying for years:

Fibre to the premise is widely accepted as the optimal future proof technology with wireless broadband a complementary rather than a substitute technology;

Have no fear though, we will undoubtedly hear from many apologists for the private telecom companies that Australiai's NBN has "failed" because it is losing money. Estimates on the break even are many years out:

BN Co can build a strong and financially viable business case with the Study estimating it will be earnings positive by year six and able to pay significant distributions on its equity following completion of the rollout;

Brace yourself for a slew of reports noting the operating losses in the early years as "proof" the government should never have built this broadband infrastructure. These are the tried...