Tag: "cooperative"

Posted February 7, 2012 by christopher

Wally Bowen has again penned an op-ed that we gained permission to reprint. The original ran in North Carolina's Durham News Observer.

President Barack Obama said in his State of the Union address that he wants to upgrade the nation's "critical infrastructure," including our "incomplete high-speed broadband network that prevents a small business owner in rural America from selling her products all over the world."

The Green Bay Packers know how to tackle this problem.

Green Bay, Wis., population 104,000, and its National Football League franchise have much in common with communities left behind in today's broadband world. In 1923, the Packers faced a similar crisis. How to keep the team in Green Bay despite being in an "uncompetitive" market.

Green Bay took a page out of the playbook of rural electrification. It converted the franchise into a community-owned nonprofit. The move permanently tied the Packers to Green Bay and lifted the burden of generating profits for outside investors. In short, Green Bay found a business model in scale with its market.

Rural electrification via a community-ownership business model began more than 100 years ago when for-profit utilities bypassed rural areas. This self-help solution has deep roots in rural America, where nonprofit cooperatives have long provided essential services for local economies.

Yet the congressionally mandated National Broadband Plan omits nonprofit networks as part of a universal broadband strategy. Blair Levin, a former FCC official and Raleigh attorney, is the Plan's lead author. According to Thomas Friedman in a Jan. 3 column in The New York Times, Levin now believes that "America is focused too much on getting 'average' bandwidth to the last 5 percent of the country in rural areas, rather than getting 'ultra-high-speed' bandwidth to the top 5 percent in university towns, who will invent the future."

Levin leads Gig.U, a consortium of major research universities - including UNC-Chapel Hill, Duke and N.C. State - promoting "ultra-high-speed" Internet access. He has every right to advocate for Gig.U, but doing so at the expense of under-served rural communities raises concerns about his work with the National Broadband Plan.

Universal access to electricity was made possible by the 1936 Rural Electrification Act, later amended to help...

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Posted February 6, 2012 by christopher

A group of rural residents living east of Madison, Wisconsin, gathered near Portage of Columbia County to discuss their lack of affordable high speed access to the Internet. These are people for whom slow, overpriced DSL would be an improvement.

Lack of access to the Internet is a drain on rural economies -- their real estate market suffer and they are unable to telecommute, when they would benefit more from it than most who do have the option. They lack access to long-distance education opportunities in a time when the cost of gas makes driving to school prohibitively expensive.

Andy Lewis, who has been working with the Building Community Capacity through Broadband Project with U-W Extension, was on hand to discuss some of the lessons learned through their work, which is largely funded by a broadband stimulus award.

The incumbent providers encouraged residents without access to aggregate their demand and create petitions to demonstrate the available demand. Of course they did. And if CenturyLink decides it can get a sufficient return on its slow and unreliable DSL, they will build it out to some of those unserved areas. This is a "damned if you do, damned if you don't" scenario for rural residents. DSL was starting to be obsolete years ago.

The better solution is finding nearby cooperatives and munis that will extend next-generation networks that can provide fast, affordable, and reliable access to the Internet. Getting a DSL to a town will do very little to attract residents and nothing to attract businesses. It is a 20th century technology in a rapidly evolving 21st century world.

The Beaver Dam Daily Citizen covered the meeting, which eventually turned away from how to beg for broadband to how they can build it themselves:

But several attendees asked why the government can't play a role in making high-speed service available everywhere, in the same way that the government helped bring about rural electrification and telephone service.

This is a very good question. They may decide not to follow that path, but given the importance of access to the Internet, they should look at options for building a network that puts community...

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Posted December 23, 2011 by christopher

One of our kindred spirits across the pond reached out to me after I wrote about Vermont's self-funded community network. The B4RN initiative, Broadband for the Rural North, has launched using a coop model that will offer 1Gbps connections to everyone in the covered territories.

The business plan is available here.

Broadband for the Rural North Ltd has been registered as a Community Benefit Society within the Industrial and Provident Societies Act 1965 (IPS), and is controlled by the Financial Services Authority. Shares will be issued to provide funding for the project and members of the community will be encouraged to subscribe to the share issue. The share issue will comply with the Enterprise Initiative Scheme established by HMRC to encourage individual share holdings in new and developing companies. Under certain circumstances investors could reclaim 30% of the value of shares produced.

As a community company, the project will be funded and to a greater extent built by the community for the community. Our ambition is to keep expenditure, where possible, within the community. In addition to purchasing shares, the community will have the opportunity to “purchase” shares in exchange for labour and materials during the project build.

The initial share offer will be £2,000,000 of shares with a face value of £1, to be launched in late 2011 and open for 1 year. The project is expected to commence on site in early 2012 and completed by the year end. The initial network will be progressively added to over subsequent years until approximately 15000 properties in adjoining rural parishes are completely connected to the FTTH network.

To keep costs low in their rural areas, B4RN will be taking a non-traditional approach:

B4RN image

B4RN will adopt a different approach; we will lay the duct not on the highway but across the farmland on the other side of the wall. Digging a narrow trench and installing a duct within it is dramatically less expensive across private farmland than along the highway. The...

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Posted August 9, 2011 by christopher

Very good news continues to come from Wired West. From a press release:

August 13th will be a historic occasion for many Western Massachusetts towns, as they form a joint cooperative to build and operate a state-of-the-art telecommunications network for residents and businesses. Founding member towns have traditionally been unserved or underserved by existing broadband providers. The new Cooperative, called WiredWest, will create a community-owned network offering high quality internet, phone and television services to member towns.

Today, most WiredWest towns have only partial coverage from limited-bandwidth broadband technologies. WiredWest's goal is not only to create fair access to broadband for all member town residents, but also to provide very high-quality services on a reliable, state-of-the-art network that will meet the escalating bandwidth requirements of businesses and home owners, and provide enough capacity for many decades.

The proposed WiredWest network will connect to the Massachusetts Broadband Institute's middle-mile fiber-optic infrastructure to create a robust network from end to end.

Twenty-three Western Massachusetts towns have taken the necessary steps to join the WiredWest co-operative by passing votes in two consecutive town meetings. Seventeen additional towns are in the process of voting and are expected to join the Cooperative over the next year. A map of WiredWest towns and their progress can be viewed on the WiredWest website.

The WiredWest Cooperative is utilizing "Municipal Light Plant" legislation, initially drafted in 1906, when rural towns faced a similar crisis of access to fundamental services from a lack of electricity. In 1996, the provision of telecommunications services was added to the statute, which enables municipalities to build and operate broadband services in the Commonwealth.

The leadership team and working groups are focused on finalizing a business plan, putting financing together and early network planning. The group recently received a $50,000 planning grant from the Massachusetts Broadband Institute, and has also raised additional funding from local businesses and individuals to assist with start-up requirements.

The incorporation will take place in Cummington, a town in the geographic center of WiredWest's territory.

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.

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