Tag: "take rate"

Posted December 3, 2013 by Christopher Mitchell

Cedar Falls Utilities operates one of the oldest community owned networks in the nation. It started as a cable network in the 90's, upgraded to FTTH recently, and this year began offering the first citywide gigabit service in Iowa. CFU Communication Sales Manager Kent Halder and Network Services Manager Rob Houlihan join me for Community Broadband Bits podcast 75.

We discuss why Cedar Falls Utilities decided to add cable to their lineup originally and how it has achieved the incrediblely high take rates it maintains.

We also discuss the importance of reliability for municipal network and why they decided to transition directly to a FTTH plant rather than just upgraded to DOCSIS 3 on their cable system. Finally, we discuss its expansion into the rural areas just outside of town.

Read all of our coverage of Cedar Falls on MuniNetworks.org.

Read the transcript of our discussion 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 Haggard Beat for the music, licensed using Creative Commons.

Posted December 14, 2012 by Lisa Gonzalez

Back in 2010, we reported on the municipal network in Spanish Fork, Utah. Back then, the utility innaugurated its telephone service, which completed its triple play offering. With recent discussion around Utah's UTOPIA, Spanish Fork is getting a second look.

A Cimaron Neugebauer, Salt Lake Tribune article, highlights the success of the Spanish Fork Communications Network (SFCN). When we last reported on SFCN, 60% of residents subscribed to its cable television and high-speed Internet service. Two years later, the numbers are even higher:

Spanish Fork runs its own municipal network to deliver telephone, cable TV and Internet services. The network has deep ties with the community and is popular with residents, nearly 80 percent of whom are customers.

"It’s exciting to live in community that invests in this kind of thing," resident Bret Bills said.

A combination of bonding and borrowing paid for the $7.5 million network including a municipal electric utility substation. Construction began in 2001. The investment continues to pay off:

Today, the city currently makes about $1 million a year profit from the service and its bonds of $600,000 annually will be paid off in 2015.

The network is a combination of fiber and coax cable. As is often the case, the community acted to fill the gap left by the failure of the private sector, involving the community along the way. From the SFCN website:

SFCN offers services that no other company will provide and can only be implemented by the public sector. The Spanish Fork Community Network has been established to serve the residents of Spanish Fork, not the interests of some large corporation.  We have involved the citizens of Spanish Fork since the systems inception through a local Citizen's Ad Hoc Committee and it has ensured the system is design to meet the needs of Spanish Fork.

Unlike UTOPIA, SFCN is able to offer retail services, having been grandfathered in at the time of the crippling Municipal Cable TV and Public Telecommunications Services Act.

Prices are incredibly...

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Posted December 28, 2011 by Christopher Mitchell

The muni FTTH network owned by the city of Salisbury, North Carolina, is finishing the calendar year with over 1600 subscribers. The network just began signing up customers 13 months ago.

“We already said in the first four years, we would not break even,” City Councilman Brian Miller said. “That’s not a surprise to anyone.”

According to documents, the city expects Fibrant to become cash-flow positive after four years. The city billed the first Fibrant customers one year ago in December 2010.

The city expects Fibrant to eliminate its deficit as more people sign up and revenues increase. The utility, which competes with private providers like Time Warner Cable, has a 13 percent market share, interim City Manager Doug Paris said, and is billing about $200,000 a month.

“We’re growing in what is an extremely tough market,” Paris said.

Paris said after the meeting Fibrant has about 1,600 customers. The utility needs about 4,500 to become cash-flow positive.

Salisbury has a new mayor coming into office, but he is a supporter of the network, as was the outgoing mayor, who spent a significant amount of time defending the community network from Time Warner Cable's attacks via the state legislature.

Posted June 21, 2011 by Christopher Mitchell

If you the take a look at our community broadband map, you'll see that Texas has only one citywide wired network owned by the public: Greenville. The story behind it is the same story we hear from just about every other community - but they actually spelled it out on their history page.

In 1999, Greenville, Texas' economic development leaders were unable to attract certain businesses and on the verge of losing existing companies due to a lack of high speed Internet.

In response, Mayor Sue Ann Harting asked SBC for a commitment to deploy DSL. That request was denied. The city's cable franchise, Time Warner, also declined to commit to cable modem Internet deployment.

Greenville found itself in a situation similar to one that many towns had faced years ago when railroads changed transportation. If the railroad was not routed through a town, that town just might die. What would happen to Greenville if the information superhighway did not come through the city?

Incumbent cable and telephone companies, their lobbyists, and associated "think tanks" like to claim that communities are somehow "duped" into building publicly owned networks. The truth is that just about every community wants to avoid the hassle of building a network but incumbents refuse to invest sufficiently to keep the community competitive for economic development and a high quality of life.

They build networks when backed into a corner, not because they want to. Fortunately, all that hassle almost always pays off with far more benefits than problems over the long term as communities transition from depending on some distant corporation to solving their own problems locally.

In fact, the results are often like that of Greenville:

Greenville citizens were not willing to take that chance. They took destiny into their own hands by amending the city charter to allow their revenue-only supported, municipally-owned electric system to build a hybrid fiber coaxial system to make high speed Internet available to everyone. Digital cable TV was offered as an option on that same system.

Once the citizens had committed to this venture, the city's incumbent telephone and cable franchises found ways of deploying that high speed Internet that they had only recently declared not feasible in Greenville.

In...

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Posted November 24, 2010 by Christopher Mitchell

David Isenberg, of isen.blog, has published a short history of Reedsburg's community fiber network that he previously wrote for the FCC when they were gathering evidence of successful networks they would later ignore in formulating a plan to continue the failed status quo of hoping private companies will build and operate the infrastructure we need.

Nonetheless, one cannot say that smart people like David did not try to help the FCC overcome its obsession with national carriers who dominate the conversations, and whose employees often work periodically with the FCC in what we call the revolving door (which itself, is a reason the FCC has been captured).

Back to Reedsburg; it is a small community approximately 55 miles northwest of Madison that just happens to have far better broadband service than just about anywhere else in Wisconsin.

David writes,

RUC first entered the telecommunications business in 1998, when it constructed a ring to tie its wells, its five electrical substations together and to provide Internet access for its high school, middle school and its school administration building. In planning the ring, the city asked Verizon and Charter if they would build it, but they were not responsive. RUS built a partly aerial, partly buried 7-mile ring of 96-strand fiber at a cost of about $850,000. Internet access was provided by Genuine Telephone, a tiny subsidiary of LaValle Telephone Cooperative which ran a fiber from LaValle, about 8 miles NW of Reedsburg.

As they were building the ring, local businesses asked to be connected as well. Reedsburg took the path that so many communities have followed, start by building for yourself and expand opportunistically. Of course, this requires that you originally engineer the network so it can be later expanded, which is good practice regardless of your future plans.

Reedsburg used bond anticipation notes, a financial mechanism that few others have used in building similar networks.

A local bank loaned the initial $5 million in bond anticipation notes for planning and construction. Then RUC issued an...

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Posted November 20, 2010 by Christopher Mitchell

Chattanooga continues to generate a lot of press since their announcement of the nation's fastest broadband speeds.

For those who crave technical details, this article from Cable 360 looks into the tech behind the network:

EPB contracted with Alcatel-Lucent as its GPON network supplier. "We've designed our network a little bit different, with our control center located where our operations center is," says Wade. "We've designed a series of fiber rings that circle our city, allowing us to have multiple 10 Gig MPLS rings, terminating in 17 communications hubs connected back with our control center."

Another article from Cable 360 (affiliate) gets into the smart-grid details of the network:

As far as the cost savings of the smart grid are concerned, users often don't realize that it costs several times more at certain times of day to generate electricity than it does at others, says EPB COO David Wade.

But perhaps the most interesting update from EPB is another window into their take rates (from Tecca.com):

We are ahead of our business plan projections for this time frame. Since our launch last September (2009), we have signed up 18,873 homes to our EPB fiber optics services. That is a 15.45% take rate. Our goal is a 35% take rate, and we believe we will reach that in 2 years. Of our EPB fiber optics customers, 81% are receiving our Fi-Speed internet service. We are still building out fiber optics as well, and our entire 600-square-mile customer service area will have access to these advanced services by the end of the this year (2010).

And finally, a short interview (audio quality is not good) with an EPB employee discussing Chattanooga's community fiber network. An interesting piece: noting that EPB views all employees as ambassadors of their product and offered them public speaking training.

...

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Posted November 3, 2010 by Christopher Mitchell

Wilson's Greenlight community fiber network is ahead of schedule. They continue to operate ahead of the business plan, despite a few difficulties that offer lessons to up and coming community networks.

We recently covered the fallout from their application to the broadband stimulus program where they had to disclose network information to their competitors.

Fortunately, that was not the only news last month from North Carolina's first all-fiber citywide network. They also surpassed 5000 subscribers and remain 6-9 months ahead of their business plan in take rate, according to the Wilson Times.

The number of customers is expected to reach 5,300 by the end of the fiscal year if the current trend continues, according to Dathan Shows, assistant city manager for Broadband and Technical Services. The city's current business plan calls for Greenlight to reach 5,000 customers by the end of the third full year of operation, which will be June 2011.

This is not the first time the network has exceeded projections; the network was built faster than expected and quickly jumped out ahead of take rate expectations.

One of the reasons Greenlight may be growing is its attention to local needs, as illustrated by the network finding a way to televise local football matches that otherwise would not have been available.

However, the Wilson Times story goes into much greater detail regarding the competition from Time Warner Cable. As we regularly see, Time Warner Cable is engaging in what appears to be predatory pricing to retain customers and starve Greenlight of new subscribers.

A lesson to other community networks, Wilson is documenting the deals TWC uses to keep subscribers. All communities should keep these records.

"Time Warner Cable's market tactics include anti-competitive pricing that interferes with Wilson's ability to secure customers through normal marketing," the application [for broadband stimulus] states. "TWC offers below-market rates to customers seeking to switch to Greenlight, locking them...

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Posted July 15, 2010 by Christopher Mitchell

The American Cable Association has profiled Tacoma's Click! network. Click! is an HFC network owned by the city, via the public power utility. Tacoma Power only offers one retail service: cable television. Voice and broadband data services are provided by independent services providers who use the network on an open access basis.

The network has been quite successful. Some 25,000 households subscribe and it has kept competitor rates (Comcast, for instance) far lower than nearby Seattle, for instance. I previously noted the economic development victories attributable to the network.

"If you're a cable TV customer or an Internet customer of any company in our footprint, you pay between 35% and 49% less than if you are not in our footprint," said Diane R. Lachel, Click! Network's Government and Community Relations Manager. "That's really significant. That's what the Telecom Act of 1996 was all about. That's the kind of competition Congress intended."

Other communities aspiring for successful networks should study the approach of Marketing and Business Operations Manager Mitch Robinson. Click! has embraced local content - something every community should do to differentiate itself from absentee-owned incumbents.

One Robinson innovation was the localization of video-on-demand (VOD). The inspiration for this product was the lack of Tacoma community news from the TV stations based in Seattle, about 30 miles northeast of Click!'s headquarters. Tacoma tends to make the local TV news mostly when the news is bad.

In response, Click! decided to build relationships with a multitude of local nonprofits to create a steady inventory of VOD segments exclusively available to Click! viewers.

One VOD service, called Safe Streets, shows how to energize a neighborhood by curbing gang activity, setting up block watches, cleaning up derelict properties, and scrubbing away unsightly graffiti.

Click! also has exclusive VOD rights with The Grand Cinema, a local independent movie theater that also sponsors local film festivals. Through the Click! partnership, local film makers expand their viewing audience to customers hungry for local content.

"We just continue to add hours and hours of that type of exclusive content," Lachel...

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Posted June 9, 2009 by Christopher Mitchell

The Broadband Properties Muni Snapshot of Jackson Energy Authority, serving Jackson Tennessee, offers a fiber-to-the-home network. As is common to the snapshots, it is heavy on technical data.

After 4 years, they had an overall take rate of 39% as well as some businesses locating in the area due to the network. Residents have saved some $8 million in aggregate since the network began offering services.

Posted May 14, 2009 by Christopher Mitchell

In the case of muni systems, which are not-for-profit enterprises, one measure of “success” is defined as the level of their “take rate” – that is, the percentage of potential subscribers who are offered the service that actually do subscribe. Nationwide, the take rates for retail municipal systems after one to four years of operation averages 54 percent. This is much higher than larger incumbent service provider take rates, and is also well above the typical FTTH business plan usually requiring a 30-40 percent take rate to “break even” with payback periods.

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