Tag: "financing"

Posted May 13, 2013 by Lisa Gonzalez

In January, Longmont Power and Communications (LPC) announced they would begin connecting businesses located within 500 feet of the existing network. As we reported, local businesses were chomping at the bit to get hooked up and enjoy the high-speed next generation network. Even without efforts at marketing or advertising, more businesses have added themselves to the queue. LPC will present the formal business plan for expanding the network to the City Council on May 14th. Tony Kindelspire recently reported on the race to get on LPC's network in the Longmont Times-Call:

"We are bringing to council a business plan to build out all of Longmont," [Vince] Jordan, [Broadband Services Manager], said. "It's the whole enchilada."

The fact that there has so far been only limited rollout is due to economics. Currently, the installations are being paid for from a reserve fund that Longmont Power has built up over the years leasing portions of its fiber-optic loop to entities such as Longmont United Hospital and a third-party provider that services the school district. Those leases bring in about $250,000 annually, Jordan said.

For 2013, the Longmont City Council authorized LPC to use $375,000 of that reserve fund to begin connecting businesses and residents to the loop.

This model works, but does not connect everyone fast enough for their liking:

To expedite the build-out, extra up-front dollars will have to be allocated, but where those dollars will come from is yet to be determined, Jordan said, adding that ultimately, the decision will lie with City Council.

Map of Longmont Fiber Rings

Right now, Longmont will cover the initial cost of connecting subscribers except in cases of extraordinarily high cost cases. If it would cost $10,000 to install but the payback to the utility in 2.5 years is only $6,000, a customer would have to cover the $4,000 difference presently. While there are over 1,300 businesses with in 500 feet of the network, connection...

Read more
Posted May 7, 2013 by Christopher Mitchell

This is a show I have been wanting to do for years - discussing some of the common mistakes that have been make by community owned networks. Offering broadband and other telecommunications services is a difficult business for any entity, public or private and all network owners make mistakes. The vast majority of these errors can be and are fixed so the network may carry on.

While in Dallas for the Broadband Communities Summit, I asked Design Nine founder Andrew Cohill about common problems faced by community owned networks and how to prepare for them or avoid them entirely.

We discuss how having a strong business plan is essential, with some of the requirements that should be included. We agree that a reliance on grant funding is a giant warning flag. We also discuss a number of other things new networks should watch out for, especially overstaffing.

Read the transcript from 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 18 minutes long and can be played below on this page or subscribe via iTunes or via the tool of your choice using this feed. Search for us in iTunes and leave a positive comment!

Listen to previous episodes here. You can can download this Mp3 file directly from here.

Find more episodes in our podcast index.

Thanks to Mount Carmel for the music, licensed using Creative Commons.

Posted April 15, 2013 by Lisa Gonzalez

Carroll County is a bedroom community, with a variety of economies all around it. Washington, D.C., Camp David, Baltimore, Harrisburg, Fort Detrick, and the Aberdeen Proving Ground are a few of the places surrounding Carroll County. There is very little major transportation infrastructure and no major waterways. Many of the county's 167,000 people commute daily to jobs outside of the bullseye.

Gary Davis, Chief Information Officer at the Carroll County Public Schools (CCPS) and Chairman of the Carroll County Public Network (CCPN) started at the school district in 2002 and immediately recognized that the telecommunications arrangement was insufficient.

Schools and other facilities were connected to the hub via 1.5 Mbps T1 connections and the whole wide-area-network was connected to the Internet via an expensive Frame Relay DS3 connection. The total cost ran as high as $600,000 per year.  

When CCPS approached Verizon about increasing bandwidth, Verizon’s proposal was extremely cost-prohibitive. Verizon wanted a long-term commitment that resulted in more than 10 times their current costs. Basically, Verizon would own the network but capital costs would be funded by CCPS and maintained with ridiculously high recurring fees. The return on investment for Verizon was just too low owing the community demographics.

At that time, Davis met Robert Wack of the Westminster City Council and the two compared notes. Davis' vision for Carroll County Public Schools and Wack's ideas for Westminster and Carroll County were very similar. Both involved a high-speed network and Westminster is currently involved in its own municipal network project (to be covered in an upcoming post).

A 2003 feasibility study on telecommunications upgrades for the school and a second broader feasibility study for the entire county in 2005 resulted in a loose confederation between CCPS, Carroll County Government, Carroll Community College, and the Carroll County Public Library system. Davis is proud of the fact that the CCPN has broken through past silos. The public sector has worked together in Carroll County, preventing the rampant duplication of efforts that used to be the norm. 

...

Read more
Posted April 1, 2013 by Lisa Gonzalez

We recently reached out to Princeton, Massachusetts, after reading several local news articles about the city's ambition to improve broadband in the community. Phyllis Booth of the Landmark has been covering the story. Community leaders recently mailed survey cards to every residence in town and put the survey online to provide ample opportunity for feedback.

With survey results complied, the answer from respondents was an overwhelming, "Yes! We want better Internet!" The Princeton Broadband Committee has since made the results available in a series of visuals that express the community's experiences with speed, customer satisfaction, desirable applications, and other respondent concerns. Detailed survey results are available for review [PDF].

The results come as no surprise to Stan Moss, Board of Selectmen Member who is also on the Broadband Committee. "Everybody has tried everything," says Stan when he describes the survey outcome. The community of 3,300 has access to DSL in about 49% of households and other choices are satellite, dial-up, and wireless. According to Moss, Princeton DSL customers averaged a D+. From the Landmark article:

“Once we invest in the fiber it’s pretty good. It’s not costly to upgrade in the future, it’s reliable once it’s in place,” said [Broadband Committee Member John] Kowaleski. “If the town doesn’t do this, no one will,” he added. The town has contacted Verizon and Charter and “we’re not even on their plan,’’ said Kowaleski. “Princeton has insurmountable challenges. It isn’t profitable for Verizon or any other company to provide the infrastructure to give us the service,” said Kowaleski.

Moss says he receives calls on a regular basis from residents who want to know when the city is going to provide FTTH. Most of those calls come from people who work from home or have school age children.

Princeton, Massachusetts Map

K-8 Schools in Princeton currently use slow and unreliable T1...

Read more
Posted March 15, 2013 by Lisa Gonzalez

As we monitored Georgia's HB 282, a bill to limit the capacity of local governments to invest in Internet networks that spur economic development, we learned of many existing networks that have helped communities to thrive.

Brian Thompson, Director of Electric and Telecommunications in Monroe took some time to tell us a little about their city network.  Located in the north central section of Georgia, with a population of 13,000, the network now offers triple play services to residents and businesses. Its network started in the 1970s with a municipal cable tv network. Today, the network is a hybrid with fiber having been added as an expansion to its cable network.

Monroe's investment in its fiber began as a way to improve connections for education. The Walton County School District could not find a private provider willing to collaborate on an affordable network between school facilities. The city took on the challenge and built a point-to-point network which the School District paid for in 10 years. In the mean time, the city expanded its network in other areas. Now, the Walton County Schools have gig service between facilities and to the Internet. The District pays only $500 per month for a service that would cost five times more from a private provider.

Thompson also confirmed what we hear from other communities with publicly owned networks - prices for business and residential services are very competitive and service is superior. He notes that customers often express appreciation for local representatives, rather than dealing with a huge bureaucracy like those at Verizon or AT&T. New connections can be created in a matter of hours or days instead of weeks.

Residential service for Internet access from MonroeAccess.Net includes affordable basic service (1 Mbps / 256 Kbps) for $21.95 per month. Two faster tiers include $34.95 (6 Mbps / 512 Kbps) and $44.95 (15 Mbps / 1 Mbps). Cable tv rates vary from $15.50 to $62.95 per month and residential phone service starts at $29.95 per month. Thompson notes that, when Monroe...

Read more
Posted March 12, 2013 by Christopher Mitchell

Blair Levin is Executive Director of Gig.U. Prior to that, he was in charge of developing the National Broadband Plan and long before that was Chief of Staff for the FCC during the Clinton Presidency. He's had a lot of experience in telecommunications policy but here we focus on what can be done to move America's communities forward.

I asked Blair to join us for the show so I could ask him some hard questions about the Gig.U initiative, including the difficulty of achieving universal service and the tradeoffs around allowing entities not rooted in the community to own (and set the rules for) essential infrastructure. I also challenge Blair's preference for "private sector" investment, asking him what exactly that means.

I hope our discussion is helpful in understanding the tradeoffs communities must make in choosing exactly how to improve Internet access locally. Though Blair and I disagree in some ways, I think we clearly illuminate why we disagree so the listener can make up his/her own mind.

If you have some questions left unanswered or points you wish were made, note them in the comments below and we'll ask him to join us again.

Read the transcript from 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 35 minutes long and can be played below on this page or subscribe via iTunes or via the tool of your choice using this feed. Search for us in iTunes and leave a positive comment!

Listen to previous episodes here. You can can download this Mp3 file directly from here.

Find more episodes in our podcast index.

Thanks to D. Charles Speer & the...

Read more
Posted March 7, 2013 by Lisa Gonzalez

Carl Junction, Missouri, is moving ahead with plans to build a fiber network.

Steve Lawver, City Administrator, tells us that funding for the $5.2 - $5.6 million project will most likely come through a lease program from the Missouri Public Utility Alliance (MPUA). Lawver tells us that funding will involve private placement non-taxable bonds, available to members of MPUA.

The network, which will be entirely fiber to the premises, will serve local government, schools, businesses, and residents. In an email, Lawver notes that:

We, as many rural communities, have found that the incumbent providers that are serving us have no plans for the improvement or expansion of their system here in our city.  With little else to do we decided to build it ourselves and find a service provider that is responsive and customer oriented.

The City began pursuing the network some time ago. Last September, TSI Global presented information at a City Council meeting after completing 75% of a feasibility study. In a Joplin Globe article, Andra Bryan Stefanoni described data they gathered on available service in the Carl Junction area:

Mediacom users can download data at 20 megabits per second and upload at 2 megabits per second for $30 a month. AT&T users can download at 6 megabits per second and upload at 1 megabit per second for $20 a month. Zing fixed wireless users can download 3 megabits per second and upload at 1.5 megabits per second for $99 a month.

At that same September meeting, Stefanoni noted that residents commented on the project. While not all of the comments favored pursuing broadband infrastructure investment, most of the speakers at that meeting commented on poor choices:

Resident Josh Hoover told the council he depends on a reliable Internet connection because he works from home.

“My Internet access is very shaky, to say the least,” Hoover said. “It has made me consider at times moving out of Carl Junction.”

Mayor Mike Moss, who works at Missouri Southern State University, said he hears complaints from MSSU teachers, as well as employees of Leggett & Platt, TAMKO Building Products,...

Read more
Posted March 6, 2013 by Lisa Gonzalez

New Hamsphire FastRoads is making significant strides in connecting residents, businesses, and community anchor institutions in the southwestern section of the state. FastRoads is funded by a combination of American Recovery and Reinvestment Act (ARRA) grants, private donations, and funds from local communities.

While the network is certainly making progress and scheduled for completion this summer, it has been constrained by state laws that limit the use of bonding. As a result, many local communities that would like to benefit from connections with Fast Roads will not able to take advantage of its presence in this largely rural area of the state.

We recently spoke with Carole Monroe, Executive Director of New Hampshire Fast Roads, in a Broadband Bits podcast interview. She told us about a bill in the New Hampshire General Court this year that would remove restrictions that limit how local governments can finance network investments.

In past years, New Hampshire legislators took up several bills that would remove the restriction preventing local communities from using bonds to finance broadband infrastructure. Every year, lobbyists from large ISPs manage to push those bills into oblivion. This year, HB 286 seeks to strike the restrictive language.

The bill is getting attention from local media, the New Hampshire SentinelSource. An editorial, published soon after the bill was introduced summarizes the problem:

In areas where companies determine that investing in expansion isn’t worthwhile, municipalities often find their hands tied because state law does not allow communities to take out municipal bonds for broadband access if there’s a private company operating in the community. That means if a town has even a small pocket of coverage by a telecommunication company, it can’t get funding to pay for expansion to the rest of its residents and businesses.

The...

Read more
Posted February 7, 2013 by Lisa Gonzalez

We enjoy bringing you news from western rural Massachusetts and the WiredWest Cooperative. We want to share the update on 2012 activities and some of the plans for 2013.

Sixteen new towns became members in 2012, which brings the grand total to 42. Business planning progressed during 2012. From the WiredWest newletter:

Significant work was undertaken in 2012 to enable financing and buildout of the network. That work was made possible by grants from the Massachusetts Broadband Institute, Berkshire Regional Planning Commission and the Central Berkshire Fund, in addition to support from donations, Cooperative membership fees, and thousands of volunteer hours.

The group also conducted a market survey in member towns. WiredWest confimed that demand is strong in the region. The organization is using the information to determine what services to offer and to support pro-forma financial statements, developed with help from groups that know the ins and outs of community broadband:

WiredWest has created comprehensive pro-forma financial statements with input from other municipal fiber networks and appropriate financial expertise. The leadership team has met with a number of public and private financing sources and advisers to refine our financing strategy and put the project on track for financing in 2013.

WiredWest also commenced a Support Card Campaign in its member towns. Potential customers, commercial and residential, shared their support and the results will help with network design. The campaign will provide potential funders evidence of interest in future network services. Residents and businesses can still complete a Support Card and are...

Read more
Posted February 4, 2013 by Lisa Gonzalez

Franklin, Kentucky expects to see more positive economic growth when it launches its new fiber optic network. According to an article in the Bowling Green Daily News, the south central community is ready for the upgrade:

“We are super excited about it,” said James McCaslin, associate vice president of academic affairs and director of Franklin-Simpson Center. “It will be like going from 1970 to 2013 with the flip of a switch.”

We contacted Tammie Carey, Fiber Services Manager for Franklin Municipal FiberNET, and she was good enough to answer some questions. She told us that 32 miles of aerial fiber are strung in three loops around the city to ensure redundancy. She expects the network to launch near the end of January for local businesses, though the utility has already been serving one business as detailed below.

The decision was based solely on a desire to boost economic development, a sentiment echoed in the Daily News article:

It’s hard to recruit industry now if you don’t have (fiber optics),” said Dennis Griffin, industrial recruiter for Simpson County. “A lot of industries, particularly in this area, are satellite plants connected to their corporate offices, somewhere else in the United States. They all need to be connected by fiber.

“So if you don’t have that, it’s hard to compete with communities that do,” Griffin said. “Ten years ago, you could get by with T-1 lines – now most industries are just expecting that you have fiber."

Apparently, City officials contacted AT&T and Comcast several years ago and asked them to install fiber to the Franklin industrial parks. When they refused, City Leaders began pondering the possibility of a municipal fiber network. Tammie tells us about the decision in an email:

It was economic based.  Our Industrial Authority was working with several industries regarding possibly locating in our community.  A need they had was large amounts of reliable bandwidth.  The existing companies would not build fiber to the industrial park locations.  The city saw this as a major hindrance with our economic development recruitment and made the decision to invest in a system....

Read more

Pages

Subscribe to financing