Valparaiso, Indiana, is investing in dark fiber to stimulate economic development; it is deploying ValpoNet, a dark fiber network to serve local businesses and institutions.

The city of approximately 32,000 people is a little over an hour southeast of Chicago and home to Valparaiso University, Purdue University North Central, Indiana Vocational Technical College, and several other colleges. The community also has a large manufacturing base and a number of hospitals and medical clinics, so there is an ample supply of entities with IT departments with the requisite knowledge to use a dark fiber network.

If At First You Don't Find Fiber...

In 2010, a regional economic development organization developed a report that identified the lack of fiber in "Valpo" and Porter County but no project developed. The city moved on to other things until 2014. A situation with a large financial information company in town breathed new life into the idea of municipally owned fiber. The company wanted to expand its facility and wanted to be sure it could access better connectivity. Several years earlier, there had been an ice storm at one of the company's home offices and, while they thought they had redundancy from the incumbents, such was not the case. They lost connectivity for days and from that point on, whenever they opened new offices, expanded, or relocated, redundancy was always a top priority. 

Valpo's Redevelopment Commission decided to hire a consultant to draft a feasibility study. He determined that a dark fiber network was not only possible, but needed. The study revealed that other companies suffered from poor reliability and considered affordability another pressing issue. 

The East Central Vermont Community Fiber-Optic Network (ECFiber), a 235-mile Fiber-to-the-Home (FTTH) network that currently connects over 1,200 customers across 24 small towns in east central Vermont, is doing well. It’s doing so well, in fact, that a capital investment group will commit $9 million in long-term financing to the network, a loan that will allow ECFiber to expand and spend down some of its existing debt. 

ECFiber announced last month, that it will use about half of the funds to activate 110 miles of existing fiber this year and add 250 more miles of fiber in 2017 bringing the network to approximately 600 miles. Network officials will use the remaining funds to pay down $7 million in debt; the move will allow ECFiber to save money through reduced interest rates and spread out loan payments over a longer period of time.

Stability Begets New Financing, New Possibilities

The news of this new injection of debt financing comes several years after the original plan to build a larger 1,900-mile, $90 million FTTH network ultimately didn’t materialize in the aftermath of the financial crisis of 2008. When ECFiber failed to secure debt financing for that larger plan, the network scaled back its ambitions, turning to direct investments and raising $7 million from 479 local investors to construct the current network.

This self-financing strategy (for more, listen to our Chris interview Carole Monroe, former General Manager in Community Broadband Bits podcast #177) made ECFiber a reality. This new financing will allow the network to expand at a faster pace and allows ECFiber to significantly stretch its footprint. In the past, the crowd funding approach allowed for targeted, smaller expansions.

Ammon now has judicial confirmation to move ahead on their Fiber-to-the-Home (FTTH) project.

As we reported earlier this year, Ammon's Fiber Optic Department, led by IT Director Bruce Patterson, is on the verge of commencing the next phase of its incremental network deployment. Bruce explained to Chris in Episode #173 of the Community Broadband Bits podcast, how the city will create a utility and residents who choose to participate will pay to have the network connected to their homes. The first area where FTTH will be deployed includes approximately 300 properties.

Innovative Participation Model

As Bruce put it:

"…[I]t seems logical that since fiber to your home raises your property value that we'd find some way to bond for that and put the payment for that bond as on assessment on your property tax because it does actually increase your property value so that's our goal. We do that with what they call a local improvement district."

Ammon intends to issue bonds that will then be paid with funds from assessments levied on the properties of those who wish to connect to the network. If a property owner wants to connect to the network, they will also become a "Utility Member" and will pay a monthly fee to use the service. Ammon's FTTH network will be open access; the city will not provide retail services but will maintain and operate the infrastructure. Residents will subscribe to the services offered by ISPs that operate over the network.

Ammon also intends to offer a low-cost option that will allow Utility Members to access basic functions, such as checking email, messaging, and file transfers without the need to subscribe to an ISP. Their plan will allow people in the community who cannot afford more advanced services to still have access to basic Internet tools.

In order to determine which neighborhoods want fiber, Ammon asks residents to sign up so they know where to aim the next build.

Sweet Validation

As Minnesota's Legislature decides on funding for the state's Border-to-Border Broadband Development Grant Program, local media is calling on state leaders to prioritize local connectivity in the Capitol Chambers. This year, Governor Dayton's office is recommending allocating $100 million to the program.

Blended Is Better

In the past, the Border-to-Border Broadband Development Grant Program has granted funding to areas of only the greatest need, which has resulted in Internet infrastructure deployment in very rural areas. That's great for municipalities, businesses, and residents in those areas who certainly need and deserve better connectivity. Towns where there is some coverage, such as old DSL networks, have typically not qualified. As a result, rural areas of the state are developing "donut holes" of inadequate connectivity. In the long term, this could spell disaster for these towns because businesses have no reason to locate in places where they can't get the Internet access they need for operations. A blended approach will allow investment in both unserved areas and areas where some networks already exist so centers of economic activity can still compete with their neighbors.

Chris provides more information on the blended approach, and on one possible solution for rural communities, in this nicely produced video created by Capitol Almanac:

It’s getting to be a sad, repetitive tale: crappy Internet for rural populations. Minnesota public officials hope to change that. At both state and federal levels, they’re advocating for greater funding for rural high-speed Internet. 

They’ve proposed several ideas to fund rural connectivity. At the state level, Governor Mark Dayton is pushing to use $100 million of the Minnesota government budget surplus for rural broadband projects. In D.C., Congressman Rick Nolan has introduced a bill to provide funding for regional solutions, and Senator Amy Klobuchar is working on a bill for coordinating broadband installation and highway construction. Will any of these ideas work?

Minnesota Budget Surplus

Minnesota’s state government expects a $1.9 billion budget surplus, which presents an opportunity to fund large, one-time investments. The Star Tribune notes that such one-time investments in infrastructure, “especially when infrastructure is defined broadly to include roads, transit, public buildings and broadband capacity,” could prove a welcome idea. Fiber networks have high, up-front construction costs, but they offer next-generation, high-speed connectivity. Depending on what state leaders do, those high construction costs may no longer be a barrier.

With the news of the budget surplus, Governor Dayton renewed his call for $100 million (just 5% of the budget surplus) to improve broadband in rural Minnesota. Last spring, however, state legislators only approved about a tenth of that amount - around $10 million. The year before that, they had only put in $20 million. The money funds competitive grants in which companies and local governments match state dollars to build networks. Promising a “border to border broadband” approach, Dayton continues to push for funding for rural projects, but it is up to state legislators to determine what to do.

Ideas for Regional Solutions from D.C. 

Last we checked in with Steamboat Springs they had just finished a connectivity project. Now the community is taking another step to improve local connectivity in this northwest Colorado ski resort town.

The goal is to connect large community anchor institutions throughout town with a fiber backbone which could become the basis for a larger network. Several community anchor institutions have pooled their resources and pledged $748,000 while also securing a matching grant to install 9 miles of fiber across the small town of 12,000. Funding is in place, but the agreement between the institutions must be finalized before sending out an official request for proposals to find a company to install the fiber.

Matching Grants & Community Connectivity

The Colorado Department of Local Affairs (DOLA) intends to match the community’s contributions towards the project. DOLA will provide $748,000 in grant money for the fiber backbone. According to Routt County Manager Tom Sullivan in Steamboat Today, the fiber design will have splice points to allow private providers to provide last-mile connectivity to residents’ homes and businesses from the fiber backbone.

So far, the large institutions pitching in for the 9 miles of fiber are: Routt County’s public safety complex, Yampa Valley Electric Association, the city of Steamboat Springs Mountain Fire Station, Yampa Valley Medical Center, Colorado Mountain College, and the Steamboat Springs School District. Several of these institutions had previously collaborated with the Northwest Colorado Broadband group and the Steamboat Springs Chamber Resort Association on the community's first connectivity project.

The Carrier Neutral Location

If you pay attention to state laws affecting municipal networks in Missouri, you are experiencing an unsettling feeling of deja vu right now. On January 7, Representative Lyndall Fraker introduced HB 2078, a bill much like last year's Senate anti-muni bill. Fraker is Chair of the House Utility Infrastructure Committee, where  the bill is now awaiting a hearing, so it has a good chance of being heard sooner rather than later. 

Your Phone Call Required! 

Time to call Members of the Committee, especially if any of them represent you, and let them know that you expect them to vote against this bill. It is anti-competitive, opposed to local authority, and prevents new investment. Bad bill! 

Preventing Partnerships to Maintain The Status Quo

This bill would not only make it extremely difficult for local communities to invest in publicly owned Internet networks, but would complicate and delay public-private partnerships. A number of communities across the country already own infrastructure and are exploring ways to partner with private providers who want to use it to serve schools, businesses, and residents. If a community wants to lower telecommunications costs or obtain better services, this legislation would have them first jump through a series of obscure, expensive, and cryptic hoops. This legislation creates barriers that serve no purpose except to erect hurdles that discourage local communities from finding better providers.