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Longmont Referendum Take Two: It Starts With a Debate
As we previously noted, the city of Longmont, Colorado, is preparing for a referendum to allow the City to offer telecommunications services to local businesses and residents using a fiber ring it built long ago. This is due to a 2005 law (the "Qwest" law) that was pushed through the Colorado Legislature by incumbents seeking to prevent competition.
That law has succeeded -- most Colorado communities can only choose between slow DSL from the incumbent telephone company and comparatively faster services from the incumbent cable company. And when Longmont last attempted to pass a referendum to share its fiber infrastructure with local businesses, Comcast and Qwest swamped the town with unprecedented sums to confuse residents -- leading to the referendum failure with 44% voting yes.
But after the referendum passed and people had time to better understand the issue, many who voted against it realized they had been duped. We have seen the same dynamic elsewhere -- in Windom, MN, for example, where the second referendum succeeded. WindomNet has since saved a number of jobs and is expanding to eight other underserved rural communities around it.
Longmont built its fiber ring in the late 90's but it still has a lot of unused capacity that could be used to attract economic development if the publicly owned power utility were authorized to offer services to businesses. Without this authority, the community has a valuable asset that they are forced to leave unused -- even as local businesses could benefit greatly from it.
The Longmont Times-Call outlined the situation in July:
Without that vote, the city can't let homes or businesses use that fiber without a vote, thanks to a 2005 state law. It's a fight the city's lost once before in 2009, when opponents -- including the Colorado Cable Telecommunications Association -- spent $245,513 to urge the measure's defeat. This time out, there's a different tack. The city has been underlining in discussions that the measure would "restore its rights" to provide telecommunications service.
Longmont Considers Second Vote on Community Fiber Network
Colorado requires a referendum before a local government can build a broadband network as a result of a 2005 law pushed by Qwest to prevent communities from building next-generation networks. So when Longmont wanted to expand its fiber ring to offer residential and business services, they put it to a vote.
They lost with only 44% supporting the measure. But now, more people understand the issue and the community is considering voting again.
We saw the same dynamic in Windom, Minnesota. Almost ten years ago, Windom held a vote to build a muni FTTH network and it failed to gain the Minnesota-required 65% supermajority. After the vote, a number of people wanted to revote because they realized they had been conned by the incumbent phone provider (ahem… Qwest) and only truly understood the issue after the vote had occurred.
City officials wanted no part of another referendum but community champions eventually prevailed and they had a second vote that authorized the community to build the network.
We'll see if Longmont follows suit. An article discussing the re-vote notes that Comcast and Qwest have dumped unprecedented sums into preventing the community from having a new choice:
The first attempt at getting that approval didn't go so well in 2009. According to city records, opponents -- including the Colorado Cable Telecommunications Association -- spent $245,513 to defeat that ballot measure, the largest amount ever spent on a Longmont city election. By contrast, the city legally couldn't campaign on its own behalf, and the explanations that were out there didn't explain well, according to Longmont Power & Communications director Tom Roiniotis.The cable and phone companies created an astroturf group called "No Blank Check" that then used standard fear, uncertainty, and doubt tactics to spread misinformation around the community.
Business Interest in Cortez Muni Network Exceeds Expectations
Last month, we were excited to write about the open access network in Cortez, Colorado. We can update the story with information from this article:
[B]usiness participation on Cortez's own municipal fiber-optic network has exceeded expectations - with 76 drops purchased to connect 98 Cortez businesses to the network. Rick Smith, director of the city's General Services Department, said crews are working to get the drops connected and to extend conduit to the west side of Broadway Street. "(The demand) exceeded my expectations," he said. "It's a good problem to have. ... I think the business owners see the value in being connected to the fiber for the long-term future. I think they see it as a way to stay competitive and enhance their business."These businesses could start using the network in July but no service provider has yet committed to providing services. When the network is ready, there is no doubt at least one will take advantage of the community network to offer next-generation services. Over time, as more subscribers are available, more service providers will want to compete for their attention.
"It's going to give us an advantage that other communities don't have," Smith said. "You've got communities starting to take notice of what Cortez is doing, and it's exciting." Businesses interested in joining the network can purchase "drops" to physically connect to the fiber-optic line. Drops currently cost a one-time fee of $150 for a small business or home and $175 for a medium business. Other rates are available for large businesses and multi-unit buildings.But drops are only available in a limited area of town along Main Street currently. As the network generates more revenues, it will expand to other areas of the community.
Rural Broadband MountainConnect in Colorado
Folks in Colorado will want to check out the 2011 Rural Broadband MountainConnect conference at Mt Princeton Springs, Nathrop, Colorado from June 12-13. Those who want to go will have to Request an Invitation (see the site for details).
Some of the discussion topics include:
- What exactly is Rural Broadband?
- What are the real Community Benefits?
- How do we get to Gigabit Speeds?
- Success stories: Lessons learned
- National Trends & Regulation
Cortez, Colorado, Also Launches Open Access Network
On the heels of our story announcing a new open access community fiber project in Idaho, we have learned of a similar project in Cortez, Colorado. Cortez is the county seat of Montezuma County in the extreme southwest of the state and has approximately 8,000 residents. Much of Colorado has long suffered from Qwest's refusal to invest in modern networks -- though a more charitable take on it would be to say Qwest's inability because it simply does not have the capacity to invest in the kind of networks communities now need to take advantage of modern communications technologies. In the late 90's, Qwest's services in Cortez were served by microwave links incapable of meeting local needs and Qwest refused to invest in a better connection due to an insufficient business case. In the words of Rick Smith, Director of General Services for Cortez (and in charge of the network), the city then decided "to take its destiny in its own hands." They began building their own network. The initial phase was an I-Net, built with the City's capital funds, to connect schools and other public facilities. They were able to later expand that under Colorado's Beanpole Project, a program that sought to aggregate community traffic in an attempt to lure more private sector investment in networks. Along the way, they began leasing some dark fiber to private companies that needed better telecommunications options. When Qwest pushed through a bill in 2005 to limit local authority to build networks (click on Colorado on the Community Broadband Preemption Map), Cortez was grandfathered, leaving it with more authority to invest in this essential infrastructure than most communities. A press release details the financing for this latest phase:
Qwest Renews Push to Gut Local Authority over Cable Television
It's 2011 and time for Qwest to renew a push to gut local authority in a number of states - Idaho and Colorado to start. An article for the Denver Post explains the argument:
Phone companies say state-level oversight of video franchising fosters competition because it is less cumbersome for new entrants to secure the right to offer services.
Many states have also eliminated the condition that new video competitors must eventually offer service to every home in a given municipality, a requirement placed on incumbent cable-TV providers.
Gutting local authority is the best way to increase the disparities between those who have broadband and those who do not. Qwest and others are only interested in building out in the most profitable areas -- which then leaves those unserved even more difficult to serve because the costs of serving them cannot be balanced with those who can be served at a lower cost.
The only reason that just about every American living in a city has access to broadband is because franchise requirements forced companies to build out everyone. Without these requirements, cable buildouts would almost certainly have mirrored the early private company efforts to wire towns for electricity -- wealthier areas of town had a number of choices and low-income areas of town had none.
In Idaho, those fighting back against this attempt to limit local authority are worried that statewide franchising will kill their local public access channels - a reality that others face across the nation where these laws have passed.
The channels, which are also used to publicize community events, provide complete coverage of Pocatello City Council, Planning and Zoning and School District 25 board meetings, as well as candidate forums before elections.
Without these local channels, how could people stay informed about what is happening in the community? Local newspapers are increasingly hard to find. In many communities, these channels are the last bastion of local news.
Colorado's Least Populous County Wires Itself
Ran across this interesting story out of Silverton, Colorado - where Qwest has refused to provide a reliable telecommunications connection to the least populous county in Colorado. Recall that Qwest's refusal to offer redundancy in Minnesota's most rural County led to a total communications blackout for twelve hours, shutting down public safety and businesses alike.
Silverton is the only town in rural San Juan County. The City is splitting the costs ($121K) of a new publicly owned fiber-optic loop with the County and apparently the State is offering a grant for the balance. As we emphasize time and time again, cities that move from leasing multiple lines from the incumbent to owning their network radically increase available speeds while cutting costs. Silverton estimates it will save 50% or more in its telecom expenditures. These savings will pile up over time because owning the network typically leads to decreasing costs over time whereas leasing lines offers much less control over future telecom budgets.
But perhaps the more interesting aspect of this story is that San Juan County is the only County in the state not connected with fiber-optic lines. Qwest has:
a 10-year, $37 million contract to provide high-speed connectivity to every county seat in Colorado, forming a statewide network known as the Multi-use Network, or MNT.To save money, Qwest is using a microwave (wireless) connection for San Juan County, which is far less reliable than would be a fiber-optic connection. For such a rural area, microwave might be a good secondary connection, offering a backup in the case of a fiber cut or natural disaster. However, making that the primary connection is what happens when Qwest is calling the shots. Qwest is not looking out for the interests of first responders, residents, or businesses in Silverton, it is looking for "a compelling business case" in their own words. And this is exactly why Qwest should not be in charge of essential infrastructure.
More History on Longmont Fiber Ring in Colorado
The Longmont Times-Call continues its coverage of the community network struggles of a Colorado community. This story has a lot of the history behind how Longmont developed a fiber ring and how they have used it even as they are prohibited from expanding it.
Longmont is not alone in working for upwards of a decade to bring better broadband to the community that actually meets local needs rather than maximizing profits. Other communities have also spent ten, fifteen, or even long with on-gain, off-again plans to build a publicly owned network. This reality provides a handy refutation of state preemptions based on the logic that communities will act too quickly in not considering their plan for a network. Communities take years in researching, planning, and developing networks.
In Longmont, the first public fiber investment came in 1996 and was expanded shortly thereafter by the Platte River Power Authority. The city moved more than 40 facilities to a gigabit network, leaving T1s to communities that prefer to vastly overpay for their telecommunications needs.
They worked with a private company, Adesta, to expand the network to residents and businesses but the company filed for bankruptcy in the following year. The arrangement certainly had its upside though - Qwest and Comcast mysteriously decided to start offering broadband in Longmont shortly after the Adesta agreement. This happens almost every time a community invests in infrastructure -- it leads to increased investment from incumbents.
They quote a techie from the Longmont Hospital who explains the one of the benefits of the publicly owned fiber already in the ground:
“It’s at least a three times reduction in cost,” Niemann said of leasing fiber from the city, versus contracting with a commercial provider. “And oftentimes, if you go with a commercial provider, you have construction costs.”The city would like to expand the network, both to bring competition to the DSL/cable duopoly, and to invest in smart grid applications for its public power utility. Unfortunately, they have to win a referendum per Colorado's incumbent-protection law. The incumbents are more than willing to spend hundreds of thousands against any such measure, knowing they would lose far more in profits if they had to deal with competition in the community.
Longmont's Saga - The Failure of Referendum
As we have noted previously, Longmont, Colorado, has seen a number of private companies attempt to offer Wi-Fi broadband and then go out of business. As Colorado preempts local authority by requiring a referendum by the city before it can offer services itself, Longmont recently had a vote to authorize telecommunications services. Voters defeated the option.
As is common in these referendums, voters were blanketed with reasons to vote against it as incumbents (Qwest and Comcast) spent $200,000 opposing competition whereas the city is prevented by law from advocating for a ballot measure.
Now the Wi-Fi network will be auctioned off in pieces because it cannot pay taxes.
Ohio-based DHB Networks owes the Boulder County treasurer’s office $87,000 in unpaid business personal property tax, and the county demanded the company cease operations unless it pays those taxes. DHB also owes the city of Longmont. Longmont-based RidgeviewTel is running the network, at least until the Wi-Fi equipment is auctioned off Thursday — at which point, 400 to 600 customers will be without Internet access, RidgeviewTel CEO Vince Jordan said.Though the city already has fiber assets that could be used for backhaul as well as other expertise it could use in continuing to run the network, it cannot step in to run a network that would be useful to the community:
While the city can step in and operate the system, it would be only for municipal needs — such as police, fire and utility services — and not to provide Wi-Fi to customers. “Our hands were always tied,” Roiniotis said. “We could buy the system and operate it, but only for our own purposes. We can’t provide the retail part of it.” The city’s hands also were tied when it came to campaigning. State law bans governments from spending public money to campaign for or against local ballot questions.Though 400-600 people may not seem like a lot of people to leave stranded, many of those on the network were the ones that needed a low cost alternative. This is one of the reason some hoped for a last minute resolution to the impending auction.
Results of Tuesday's Elections
A few local elections on Tuesday had questions relating to publicly owned broadband networks. In Seattle, candidate McGinn strongly supported a publicly owned fiber optic network for the city and he may yet get his way as the race is a dead heat and ballots are still being counted. We previously discussed Seattle's broadband deliberations.
In Longmont, Colorado, voters voted against giving the municipality authority to expand the city owned fiber-assets into a network offering retail services. As usual, the proponents of the public network were significantly outspent by incumbents seeking to prevent competition.
A group called No Blank Check Longmont, backed with $150,000 from the Colorado Cable Telecommunications Association, spent more than $143,000 in cash and benefited from more than $46,000 in in-kind contributions in its campaign to defeat 2C.Up on top of Minnesota's North Shore, the Cook County Broadband project got a mixed reception. Though they received the authority to raise a 1% sales tax that would have helped pay for the project, they failed to achieve the necessary 65% super majority required under ancient Minnesota law (1915) to operate a telephone service. A majority supported the idea - 56% - but without the ability to offer a triple-play, the county will have to reconsider its approach. Though such results are disappointing, every community with a locally owned community network has had to deal with such setbacks. The question is how organizers can respond to challengers and how badly the community wants fast and affordable broadband networks. In the near term, I hope that both the Minnesota Broadband Task Force Report (due Friday) and the FCC National Broadband Plan recommend abolishing such barriers to public ownership as a 65% referendum.