A recent proposal being considered by the FCC that has raised the loudest outcry has been the status of mobile broadband in rural areas. Now that Verizon is discontinuing rural subscriber accounts, the FCC will be able to see those concerns come to life.

Dear John...

The company has decided to cut service to scores of customers in 13 states because those subscribers have used so many roaming charges, Verizon says it isn’t profitable for the company. Service will end for affected subscribers after October 17th.

Verizon claims customers who use data while roaming via other providers’ networks create roaming costs that are higher than what the customers pay for services. In rural communities, often mobile wireless is the best (albeit poor) or only option for Internet access, so subscribers use their phones to go online.

Subscribers are from rural areas in Alaska, Idaho, Indiana, Iowa, Kentucky, Maine, Michigan, Missouri, Montana, North Carolina, Oklahoma, Utah, and Wisconsin.

In a letter sent to customers scheduled to be cut off, Verizon offered no option, such as paying more for more data or switching to a higher cost plan. Many of the people affected were enrolled in unlimited data plans:

“During a recent review of customer accounts, we discovered you are using a significant amount of data while roaming off the Verizon Wireless network. While we appreciate you choosing Verizon, after October 17th, 2017, we will no longer offer service for the numbers listed above since your primary place of use is outside the Verizon service area.”

Affecting Customers And Local Carriers

Apparently, Verizon’s LTE in Rural America (LRA) program, which creates partnerships with 21 other carriers, is the culprit. The agreements it has with the other carriers through the program allows Verizon subscribers to use those networks when they use roaming data, but Verizon must pay the carriers’ fees. Verizon has confirmed that they will disconnect 8,500 rural customers who already have little options for connectivity.

Philip Dampier at Stop The Cap! writes:

For the second week in row, our staff has felt compelled to address a misleading report about municipal networks. In order to correct the errors and incorrect assumptions in yet another anti-muni publication, we’ve worked with Next Century Cities to publish Correcting Community Fiber Fallacies: Yoo Discredits U Penn, Not Municipal Networks.

Skewed Data = Skewed Results

Professor Christopher S. Yoo and Timothy Pfenninger from the Center for Technology, Innovation and Competition (CTIC) at the University of Pennsylvania Law School recently released "Municipal Fiber in the United States: An Empirical Assessment of Financial Performance." The report attempts to analyze the financial future of several citywide Fiber-to-the-Home (FTTH) municipal networks in the U.S. by applying a Net Present Value (NPV) calculation approach. They applied their method to some well-known networks, including Chattanooga's EPB Fiber Optics; Greenlight in Wilson, North Carolina; and Lafayette, Louisiana's LUS Fiber. Unfortunately, their initial data was flawed and incomplete, which yielded a report fraught with credibility issues.

So Many Problems 

In addition to compromising data validity, the authors of the study didn’t consider the wider context of municipal networks, which goes beyond the purpose of NPV, which is determining the promise of a financial investment.

Some of the more expansive problems with this report (from our Executive Summary):

S&P Global Market Intelligence - May 26, 2017

Hard Data on Municipal Broadband Networks

Written by Sarah Barry James

There is a dearth of good data around municipal broadband networks, and the data that is available raises some tough questions.

A new study from University of Pennsylvania Law School Professor Christopher Yoo and co-author Timothy Pfenninger, a law student, identified 88 municipal fiber projects across the country, 20 of which report the financial results of their broadband operations separately from the results of their electric power operations. Municipal broadband networks are owned and operated by localities, often in connection with the local utility.

...

Yet Christopher Mitchell, director of the Community Broadband Networks Initiative at the Institute for Local Self-Reliance, argued that Yoo's study did not present an entirely accurate or up-to-date picture of U.S. municipal networks.

"When I looked at the 20 communities that he studied — and his methodology for picking those is totally reasonable and he did not cherry pick them — I was not surprised at his results because many of those networks are either in very small communities … and the others were often in the early years of a buildout during a period of deep recession," Mitchell said.

As an example, Mitchell pointed to Electric Power Board's municipal broadband network in Chattanooga, Tenn. — one of the five networks Yoo identified as having positive cash flow but at such a low level that it would take more than 100 years to recover project costs.

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In fact, without the revenue generated by the fiber-optics business, EPB estimated it would have had to raise electric rates by 7% this year.

According to Mitchell, Yoo's study captured the Chattanooga network when it was still "small and growing," but misses "what's going to happen for the rest of the life of the network, which I think is the more important part."

...

Telecompetitor - May 25, 2017

Municipal broadband networks do not have a strong financial track record, according to an analysis conducted by the University of Pennsylvania’s Center for Technology, Innovation and Competition. The municipal broadband financial analysis, which looked at 20 municipal fiber projects, found that only nine were cash-flow positive and that of those, seven would need more than 60 years to break even.

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An Opposing View

Municipal network advocate Christopher Mitchell, director of the Community Broadband Networks Initiative at the Institute for Local Self-Reliance, pointed to several flaws in the Penn Law municipal broadband financial analysis.

He noted, for example that a substantial portion of the 20 networks studied were “early in the process and very small.” He also argued that the 2010-2014 study period may have biased the results, as that period included a recession and subscribership for some of the networks has increased substantially since 2014. He noted, for example, that EPB’s broadband network in Chattanooga had about 50,000 to 55,000 subscribers in 2014 but has now hit the 90,000 mark.

The Penn Law authors’ approach was “not the proper way to measure these networks,” said Mitchell in a phone call with Telecompetitor. The analysis “doesn’t take into account jobs created or the impact on the municipal budget,” he said.

He argued, for example, that a municipality that previously paid $1 million annually for connectivity might instead pay itself $500,000 for connectivity on the municipal network.

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Read the full story here.

The Utah Telecommunications Open Infrastructure Agency’s (UTOPIA) regional fiber network serves communities in the north central region of the state. Without the publicly owned network, it’s doubtful the eleven communities served would have access to high-quality Internet access. It’s almost certain they wouldn’t be able to choose between so many providers who operate on UTOPIA's open access infrastructure. Now, the city of Bountiful, Utah, wants the network to extend its reach to their community.

Reaching Out To Other Communities

Recently, the city council voted to give UTOPIA a franchise agreement so the network but the city will not contribute financially to the deployment. According to the Standard Examiner, officials from the networks anticipate the first customers will be business subscribers who would help pay for the expansion.

Bountiful isn’t alone - other communities have granted franchise agreements to UTOPIA.

“This is just kind of a natural progression out of the Salt Lake Valley,” said [Roger] Timmerman, executive director of UTOPIA… The deal “brings more options to Bountiful,”

Bountiful City Councilman Richard Higginson described UTOPIA as a “proven player” in an email to the Standard Examiner. Other communities with franchise agreements include Salt Lake City, Draper, South Jordan and Pleasant Grove. Higginson wrote:

“If UTOPIA and its member cities find that providing services to customers in neighboring cities benefits their operation, then it could be a win-win for both UTOPIA and non-UTOPIA cities alike."

The franchise agreements will allow UTOPIA to deploy in cities' rights-of-way in order to connect customers to the network.

Broadband Benefits In UTOPIA Towns

Last fall we spoke with Mayor Karen Cronin from Perry City, which already connects to the UTOPIA network. She described how competition from the open access network has improved local services, the economy, and the general quality of life. Roger Timmerman participated in the interview as well. Listen to the podcast here.

It’s no small feat to plan, deploy, and operate a municipal citywide Fiber-to-the-Home (FTTH) network, but communities are doing it. We’ve put together a Citywide Municipal FTTH Networks list and a map, with quick facts at your fingertips. If your community is considering such an investment, this list can offer a starting point on discovering similarly situated locations to study.

The list is divided by state and each state heading offers a description of any barriers that exist and a link to the statute in question. Under each community, we also included relevant links such as to the provider’s website, coverage on MuniNetworks.org, and reports or resources about the network.

We used four basic criteria to put a community on our list and map:

• The network must cover at least 80% of a city.
• A local government (city, town, or county) owns the infrastructure.
• It is a Fiber-to-the-Home network.
• It is in the United States. 

Share the list far and wide and if you know of a community network that meets our criteria that we missed, please let us know. Contact H. Trostle at htrostle@ilsr.org to suggest additions.

Consumers should be able to expect a certain amount of privacy and recent rules adopted by the FCC are a step in the right direction. That step has also revealed some key differences between profit-driven national Internet service providers, smaller ISPs, and municipal networks. The different attitudes correspond with the different cultures, proving once again that small ISPs and munis have more than just profit in mind.

On October 27th, the FCC adopted an Order to allow ISP customers to determine how their data will be collected and used. According to the FCC, they made the decision in response to public comments about the concern for personal data protection.

The New Rules

Over the past few years, consumers have become savvy to the fact that ISPs have access to personal data and that they often sell that data to other companies for marketing purposes. Under Section 222 of Title II of the Communications Act, telecommunications carriers are bound to protect their subscribers’ private information. Because those rule are designed to change as technology changes, says the FCC and Congress, this same authority applies to private data collected by ISPs. 

The FCC decided to divide the permission of use of personal information based on type, categorizing information into “sensitive” and “non-sensitive.”

Sensitive information will require ISPs to obtain “opt-in” consent from subscribers, which will allow them to use and and share this type of information:

• Precise geo-location 
• Children’s information
• Health information 
• Financial information
• Social Security numbers
• Web browsing history
• App usage history
• The content of communication 

Non-sensitive information would include all other information and customers would need to "opt-out" in order to prevent their ISPs from collecting such data. Examples of non-sensitive personal information include service tier information.

The city of Ammon, Idaho, continues to garner more recognition and opportunities from its unfolding municipal fiber network.

In a recent news release, Ammon officials announced the city received approximately $600,000 from the National Science Foundation (NSF) to partner with the University of Utah. They will research and develop a series of next-generation networking technologies supporting public safety. 

Pursuing SafeEdge

Called SafeEdge, the nearly initiative will give Ammon residents connected to the city's network the opportunity to participate in the initiative to develop applications such as broadband public emergency alerts. 

Ammon officials said a major focus of the research will be to evaluate the “feasibility of mixing public safety applications with other applications and services,” such as consumer streaming and data sharing, remote classroom access, and dynamic access to judicial functions, including remote arraignments and access to legal representation.

The city added “It is expected that this open access/multiservice approach will improve the economic feasibility of deploying broadband services in small and rural communities by allowing a variety of services to be deployed across the same infrastructure, while at the same time ensuring that public safety applications can function in this environment.”

Three-year Project

The National Science Foundation and US Ignite, an initiative promoting U.S. leadership in developing and implementing next-generation gigabit applications that can be used for social good, are providing nearly $600,000 in funding over a three-year period for the Ammon project. About $235,000 of that funding will go to Ammon as sub awardee, the city said. The project period runs from Oct. 1, 2016 to September 30, 2019.

Other Honors 

Residents of Salt Lake City’s Lorna Doone Properties will be enjoying Internet speeds of up to one gigabit for no cost, thanks to a partnership between Google Fiber and the Utah Nonprofit Housing Corporation (UNHC). In July 2015, the company announced that the Google Fiber Gigabit Communities program would bring free access to select low-income housing locations throughout cities within their service areas, and the residents of Lorna Doone are newest to this list. 

Google will supply Internet access and UNHC has a computer rental program, which is in part supplied by the local business community. In addition, the City of Salt Lake has helped to fund mobile computer labs to bring more low-income households online.

Internet access is vital not only for entertainment, but more importantly for completing homework, keeping up with the news, and participating in the digital economy. "We do not have cable television or anything, so it's a way that we stay connected,” Kelli Nicholas, a Lorna Doone resident said during Google Fiber’s launch event. "I read about our current events online, my son and I do homework things… [Google Fiber will] allow people who weren’t able to connect, to connect with one another.”

Aside from providing Internet access in the Lorna Doone apartments, Google has partnered with the Department of Housing and Urban Development’s ConnectHome program to provide gigabit service to public housing projects. A Google Fiber blog post announced the partnership:

“The web is where we go to connect with people, learn new subjects, and find opportunities for personal and economic growth. But not everyone benefits from all the web has to offer. As many as 26% of households earning less than $30,000 per year don’t access the Internet, compared to just 3% of adults with annual incomes over $75,000. Google Fiber is working to change that.”

Check out local video coverage of the launch event:

This is episode 223 of the Community Broadband Bits podcast. Eleven communities in Northern Utah are now served by a regional open access fiber-optic network, UTOPIA. Perry City's Mayor Karen Cronin and UTOPIA's Executive Director Roger Timmerman join the show. Listen to this episode here.

Karen Cronin: We don't have the money that some of the lobbyists are getting from big companies, but we have a voice and I think that our legislatures will listen to local voices if they have the courage to step forward.

Lisa Gonzalez: This is episode 223 of the Community Broadband Bits podcast from the Institute for Local Self-Reliance. I'm Lisa Gonzalez. The Utah Telecommunications Open Infrastructure Agency, also known as UTOPIA, began serving north-central Utah in 2004. The regional open access fiber-optic network has had its share of challenges since launch, but has slogged through them to now bring healthy competition to residents and businesses in 11 communities. Joining Chris this week are the mayor of one of the UTOPIA cities, Karen Cronin from Perry. Roger Timmerman, executive director of UTOPIA, is also part of the conversation. Our guests share stories about how competition has benefited local businesses and residents. They also describe infrastructure sign-up choices they have as property owners in a UTOPIA community and what it's like to have more than one or two ISPs at your feet. Now here are Chris, Mayor Cronin from Perry, and Roger Timmerman, executive director of UTOPIA.

Christopher Mitchell: Welcome to another episode of the Community Broadband Bits podcast. I'm Chris Mitchell. Today I'm speaking with two wonderful guests from the state of Utah. Roger Timmerman is the executive director of UTOPIA, the Utah Telecommunications Open Infrastructure Agency. Welcome to the show.

Roger Timmerman: Thank you. Thanks for having me on.

Christopher Mitchell: Perry City mayor, Karen Cronin. Welcome to the show.

Karen Cronin: Thank you. I'm delighted to be part of the conversation.