Tag: "cooperative"

Posted July 15, 2011 by christopher

For years, telephone and cable companies have claimed there is little demand for better networks because they cannot identify a single "killer app" that needs 100Mbps or 1Gbps. Recently, I've heard from kindred spirits saying that the "killer app" is the network itself.

This is a smart response.

Imagine someone demanding we dismantle the Interstates unless we can identify a single use that makes them worthy. The proposition is absurd. There are thousands of ways the Interstates are used. Some -- like ensuring the military can move about the country quickly -- are quite important whereas others are important only to a few people (as when my family goes on vacation).

We are all better off because we have such a robust transportation system. Our markets are more efficient and we have greater freedom of movement. We all also bear the cost (whether it be through taxes, pollution, or other impacts … and yes, we bear that cost unevenly). Roads have been essential infrastructure for centuries -- few argue they should only be built where those along the path can pay for the full cost of doing so.

Access to the Internet is rapidly becoming as important as the roads have long been. Whether for economic development, education, health, or quality of life, a lack of fast, reliable, and affordable access to the Internet diminishes all.

For years, rural cooperatives have built telecommunications networks in rural areas where no private company would dare invest. Joan Engebretson explains why "Broadband Payback is not Just About Subscriber Revenues.".

Antique Phone

The upshot is that in doing a cost/ benefit analysis on telecom infrastructure investment, it’s important to take into account not only the direct revenues that the infrastructure generates but also the dollars that flow into a community as a result of the investment.

Imagine trying to sell a home today that only had party line phone service and think about the impact that would have on the value of the home. Now apply that logic to broadband. With two-thirds of U.S. households accustomed to having broadband connectivity, I’m already hearing that homes in areas with inadequate broadband...

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Posted July 11, 2011 by christopher

The folks in Syracuse who are organizing for a community-owned network have changed their name from the Syracuse Municipal Broadband Initiative to Syracuse Community Broadband Initiative:

Syracuse Community Broadband Initiative is the new name of the project. This was done because the use of "municipal" seemed to create a number of misconceptions in the minds of some institutional leaders. We used the term "municipal" generically to mean community-owned, and community ownership and control is what we wish to emphasize. Moreover, the form of business entity we favor is not a municipal authority but a 501(c)(12) utility service, a special type of consumer cooperative designed for, e.g., telecommunications, power, and water utilities (there are over 2,000 such utilities in the U.S. today). We hope the new name will better convey the nature of the project.

In talking to people and journalists, I have also found some confusion around the term "municipal." Some assume this means a muni network would only serve city departments, schools, libraries, etc.

Making a network a coop rather than being owned by the local government may help win some support from those who are hostile to the government owning anything, but there are downsides as well.  Local governments have hundreds of years of experience building infrastructure and therefore have more financial tools available.  Funding a new coop can be a daunting challenge.  

We are very supportive of both approaches in our efforts to ensure broadband networks are structurally accountable to the communities they serve. As groups like these folks in Syracuse find solutions to these problems, we hope they will share their successes as well as lessons learned.  

Posted June 10, 2011 by christopher

I wrote this short case study of the Powell network in Wyoming for our Breaking the Broadband Monopoly report but it never got published on this site. As we noted a year ago, Powell bought its system back from investors last year.

The city of Powell started talking about a fiber network in 1996 but did not make progress for almost ten years. They developed a plan to build a FTTH network and lease it to an outside operator. The incumbents declined to partner with the City and later spent considerable effort to derail the City’s efforts. However, the City found a local cooperative, TriCounty Telephone (TCT), willing to offer triple-play services on the City’s network.

Financing the deal took more time than expected because the City was unwilling to commit public money directly or even as a backstop if the network fell behind on debt payments. While the City worked on the financing, cable incumbent Bresnan and telephone incumbent Qwest tried to convince the state legislature to abolish Powell’s authority in this arena. The legislature did create new obstacles for cities building such systems but Powell was grandfathered in.

In late 2007, the City agreed to an arrangement where TCT would exclusively lease the network and make up shortfalls in debt payments if required for a period of six years. After that period, the network would be open to other service providers as well and it would be the City’s responsibility to cover any shortfalls if needed. If the City chose not to appropriate in that situation, the investors could take the network. Estimates suggested a 33% take rate would allow the network to break even by the fifth year but most expected a higher take rate.

In early 2008, Powell completed the $6.5 million bond financing. As is more common in small builds, they immediately connected a line to the home rather than waiting for the subscriber to sign up. They trenched a fiber to the side of every house regardless of whether they were taking service, putting the fiber in a box on the side of the house. If the occupant signs up, a crew only has to install electronics rather than bringing a line down from the pole. This approach increases the capital cost slightly but can significantly decrease operating expenses as residents subscribe.

...

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Posted May 12, 2011 by christopher

Wally Bowen, the Founder and Executive Director for the Mountain Area Information Network in Asheville, North Carolina, wrote the following op-ed with Tim Karr of Free Press. Wally gave us permission to reprint it here.

North Carolina has a long tradition of self-help and self-reliance, from founding the nation's first public university to building Research Triangle Park. Befitting the state's rural heritage, North Carolinians routinely take self-help measures to foster economic growth and provide essential local services such as drinking water and electric power.

Statesville built the state's first municipal power system in 1889, and over the years 50 North Carolina cities and towns followed suit. In 1936, the state's first rural electric cooperative was launched in Tarboro to serve Edgecombe and Martin counties. Today, 26 nonprofit electric networks serve more than 2.5 million North Carolinians in 93 counties.

Strangely, this self-help tradition is under attack. The General Assembly just passed a bill to restrict municipalities from building and operating broadband Internet systems to attract industry and create local jobs. Although pushed by the cable and telephone lobby, similar bills were defeated in previous legislative sessions. But the influx of freshmen legislators and new leadership in both houses created an opening for the dubiously titled "Level Playing Field" bill (HB 129).

No one disputes the importance of broadband access for economic growth and job creation. That's why five cities - Wilson, Salisbury, Morganton, Davidson and Mooresville - invoked their self-help traditions to build and operate broadband systems after years of neglect from for-profit providers, which focus their investments in more affluent and densely populated areas. Not coincidentally, all five cities own and operate their own power systems or have ties to nonprofit electric cooperatives.

(While the bill does not outlaw these five municipal networks, it restricts their expansion and requires them to make annual tax payments to the state as if they were for-profit companies.)

How does a state that values independence, self-reliance and economic prosperity allow...

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Posted January 12, 2011 by christopher

A group of towns in rural western Massachusetts, having already decided on a cooperative structure, have now started the process of joining the coop in order to eventually build an open access FTTH network to serve everyone in each of the member towns.

Originally, the Wired West towns looked to a similar project in Vermont, East Central Vermont Fiber Network, for guidance but found Massachusetts law did not allow them to use the same joint powers agreement approach. After researching Massachusetts law, they found a law previously used by towns to form "light plants" for electrification. In more modern times, the law had been amended to allow such an entity to offer cable television and telecom services. Of the forty muni light plants in Massachusetts, some four provide telecom services.

In order to join the coop, a town has to twice pass a 2/3 vote by those in attendance at a town meeting. The meeting must be no less than 2 months apart and no more than 13 months apart. In talking with folks from Wired West, this approach appears to be unique to Massachusetts.

From the Wired West site:

Passing the MLP legislation creates a new town department, and does not require a town to produce or sell electricity. The Selectboard can choose to oversee its MLP department themselves or appoint a three to five member board. This group is responsible for appointing a manager, making decisions around the town’s participation and representation in the WiredWest Cooperative, and filing annually with the State.

Creating the MLP incurs no cost to the town. If a town decides to join the WiredWest Cooperative, there will be a membership fee of not more than $1,000 per town.

The coop requires at least 2 towns, but that does not appear to be doubt. The towns to consider it thus far have been enthusiastic - Wired West has a helpful map showing where local towns stand in the process. In general, Wired West is an excellent example of how community groups can use a website to keep people...

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Posted December 18, 2010 by christopher

Fred Pilot, founder of the Camino Fiber Network Cooperative, recently wrote about the importance of community ownership in California's oldest newspaper. An excerpt:

The Camino Fiber Network Cooperative was formed in 2009 with the recognition that unless county residents and businesses — particularly those located in underserved central portions of the county — step into the gap and build their own infrastructure, the county is in clear danger of being left without modern telecommunications services. That would render it an undesirable location to purchase or rent a home or operate a small business, degrading the county’s current and future economic viability.

To avoid this scenario, the Camino Fiber Network Cooperative intends to construct a consumer-owned, open access fiber optic to the premises network that will meet today’s needs as well as those of the future. For membership and other information including a consumer survey, visit the co-op’s Website.

Posted September 20, 2010 by christopher

Carroll County, Maryland, has announced a partnership with the Maryland Broadband Cooperative to bring fiber-optic broadband to area businesses that have been neglected by incumbent providers.

The county brought the broadband cooperative in to lease out unused fiber on the county’s 110-mile network, which it built over the past two years. The cooperative will connect business customers with its own members, which include various sizes of Internet service providers that can link the businesses to the network. Prices will vary depending on the service provider and location of the business.

The Carroll County Times offers greater coverage in a story by Marc Shapiro.

The County's $9 million network is financed in part with cost savings from transitioning away from $600/month T1 lines and is the result of many years of work. Remember that a T1 offers 1.5 Mbps of connectivity, the new fiber network likely offers 100Mbps to 1Gbps today and is capable of offering much greater capacity in the future. Building these networks is a far smarter move than leasing T1 lines.

Every county school, every major county facility and Carroll Community College is on broadband Internet, said Mark Ripper, chief information officer with the Carroll County Department of Technology Services. All county facilities and libraries and the board of education will have broadband Internet shortly, he said.

The Maryland Broadband Cooperative, a public/private partnership that promotes economic development through technological infrastructure, will lease the "dark fiber," unused fiber, to its member companies, who can in turn sell Internet service to local businesses. The MDBC has 59 members, about 30 of which are Internet providers, said Patrick Mitchell, president and CEO of the MDBC.

Posted September 16, 2010 by christopher

Western Massachusetts' Wired West is an exciting approach to bringing next-generation broadband networks to rural areas. Thanks to Design Nine's news blog for alerting me to this decision.

For those unfamiliar with our coverage of Wired West, a two page write-up in Berkshire Trade & Commerce Monthly [pdf] offers a good background:

“You often hear that it is too expensive to bring fiber-optic lines to every home, business and institution in a rural area," said Webb, who lives in the remote southern Berkshire town of Monterey. “But that only means it’s too expensive for the business model of private-sector companies who have to show profitability in a very short period. It is not too too expensive if it is done by the communities themselves on a basis that does not have to meet those market demands."

Wired West has announced a decision on the difficult issue of governance structure. They are going to be a public co-operative, comprised of the member towns.

Now the member towns will have to approve the structure and the organization will move forward on the planning necessary to develop, finance, and build their broadband network.

Posted September 14, 2010 by christopher

I just spoke with Danna MacKenzie of Cook County and Gary Fields of National Public Broadband (working with Lake County) to find out just how excited they are about yesterday's announcement of broadband stimulus awards. Both Lake and County (separate projects) have been funded to build fiber-to-the-home networks to everyone on the power grid in the region.

They are pretty excited.

In a few years, these North Shore Communities will likely have better broadband options than the metro region of Minneapolis and Saint Paul -- a far cry from the beginning of this year when a single fiber cut stranded the whole north shore.

Bob Kelleher at Minnesota Public Radio covered the awards:

Combined, they will connect 37,000 residents, 1,000 businesses and 98 institutions such as hospitals and schools.

Cook County actually has a double whammy - they already stood to benefit from the North East Service Cooperative, which is building high capacity fiber-optic lines through the North Shore to offer middle-mile backhaul and connect local government facilities and schools.

As of yesterday, they will also get a fiber-to-the-home network from the Arrowhead Electric Cooperative. Cook, currently served in part by Qwest, has little access to true broadband -- some 37% have access to anemic DSL connections and the rest are stuck with dial-up.

Details of the award from Kelleher at MPR:

Joe Buttweiler, who directs membership services with the Lutsen-based Arrowhead Electric Cooperative, said 70 percent of the federal award is a grant and the remainder a loan. He said the cooperative will add another $600,000 for capital.

Back in April, Blandin's Broadband blog published the short summary of the Arrowhead project:

Arrowhead Electric Cooperative proposes to build and operate a fiber optic network to the residential and commercial...

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Posted September 4, 2010 by christopher

A brief update from the Camino Fiber Network Cooperative of El Dorado County in California - the Sacramento Bee ran an article earlier this summer covering the coop's approach to expanding broadband (though they may no longer use the term broadband).

Fred Pilot has spear-headed this movement, recognizing that if the community does not pull together and build something themselves, they are not likely to gain access to modern communications.

Currently the co-op is surveying the community through the website, www.caminofiber.net; trying to sign up members for the cooperative; and seeking funding for a technical study of how and whether they could connect to a middle mile source.

To hire an expert will cost $30,000 to $50,000, Pilot said.

Stay up to date via the Camino Fiber Network website.

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