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Chattanooga's EPB Sparks Local Entrepreneurial Ecosystem

Chattanooga's EPB Fiber Optics continues to stand out as a model for the municipal broadband movement, demonstrating the extraordinary impact that fast, affordable, reliable Internet access can have on economic development efforts. 

Now, a new research report from the Ewing Marion Kauffman Foundation highlights the network’s vital role in kick starting the development of what has become a thriving “entrepreneurial ecosystem” in this city of about 174,000.

Collaboration, Public Private Partnerships

The report, titled "Little Town, Layered Ecosystem: A Case Study of Chattanooga," credits the EPB network as the “spark” for an explosion of economic development since the network's launch in 2010. As the article notes, the EPB estimates that since the launch, Chattanooga has seen an influx of ninety-one new companies with approximately $50 million in venture capital contributions from six firms. 

According to the report, the network has also encouraged an entrepreneurial climate in this city that had a “long history of collaboration and public-private partnerships” even prior to the network launch. The report cites examples of the city's collaborative spirit in several non-profit entities, city officials, local anchor companies and universities, and the city’s recently opened Innovation District.

Yasuyuki Motoyama, director of Research and Policy at the Kauffman Foundation and one of the paper's authors, explains the lessons that other cities might take away from Chattanooga’s example:

"Chattanooga organized and mobilized its assets to orient itself to entrepreneurial initiatives. This demonstrates what a small-size city can do when factions from different sectors focus on a common goal and collaborate to achieve that goal. This case of Chattanooga provides lessons for other cities to leverage their own unique assets and to create equally successful ecosystems."

TN and NC vs. FCC: Oral Arguments Scheduled for Thursday, March 17th

This Thursday, March 17th, attorneys for the FCC and the states of Tennessee and North Carolina will present arguments to the Sixth Circuit Court of Appeals on a case that could define parameters for publicly owned Internet networks. The proceedings begin at 9 a.m. eastern. Each side has 15 minutes to present.

As we reported a year ago, the FCC ruled that state barriers in Tennessee and North Carolina limiting expansion of publicly own networks are too restrictive and threaten the U.S. goal of expanding ubiquitous access. The FCC overruled the harmful state laws but soon after, both states filed appeals.

The cases were consolidated in the Sixth Circuit and a number of organizations, including ILSR, offered Amicus briefs. We have collected all the briefs and made them available for you here. As most of our readers will recall, the case focused on Chattanooga and Wilson, two communities that know the many benefits of publicly owned networks.

So, when you raise your glass of green beer on Thursday to celebrate St. Paddy's, send some luck to our friends in Wilson, Chattanooga, and the FCC!

Pulaski, Tennessee: "A Community Investing In Itself" With Better Connectivity

Pulaski, located in the area Tennesseans describe as the southern middle region of the state, has a fiber network other communities covet. When we contacted Wes Kelley, one of the people instrumental in establishing the network, he told us that the community always wanted to be more than "just Mayberry." Rather than settle for the sleepy, quaint, character of the fictional TV town, local leaders in Pulaski chose to invest in fiber infrastructure for businesses and residents.

A Legacy That Lives On

The county seat of Giles County, Pulaski has a long history of municipal utility service. The electric system was founded in 1891, and is the oldest in the state. The city also provides municipal water, sewer, and natural gas service. The electric utility, Pulaski Electric System (PES), serves most of Giles County, which amounts to approximately 15,000 customers. PES receives power from the Tennessee Valley Authority (TVA) and then distributes it throughout the county.

Pulaski is now known for its Fiber-to-the-Home (FTTH) network, PES Energize, but the city's first adventure in providing municipal Internet access began in 1993. The city developed dial-up service and within five years, 1,500 homes were using the service. The city abandoned the dial-up service to offer Wi-Fi but then sold that system to a private company.

Preparing PES

Leaders in Pulaski had their sights on connectivity beyond the limits of Wi-Fi. In 2002, Mayor Dan Speer and Dan Holcomb, the New CEO of PES, began exploring a publicly owned fiber network. Holcomb had previously lead a Michigan utility that offered cable TV and so used his experience to help establish the PES Energize network. AT&T (BellSouth at the time) provided DSL service and Charter offered cable Internet access but neither company performed to the satisfaction of the community. In fact, Pulaski had always suffered through poor quality service from its incumbents.

When Holcomb arrived, the community engaged a consultant for a feasibility study to examine in detail the idea of a publicly owned fiber network; Holcomb, Speer, and the rest of the city's leadership were not confident about the results. Before the community moved forward, Holcomb felt it was important they carry out a customer survey and a second feasibility study. In the spring of 2003, the organization undertook a survey and used the results to ready the utility to step into its approaching role as a municipal network utility.

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Ready For The Next Step

Two years later, city and utility leadership felt that they were ready and completed a second feasibility study. This time, the results suggested a better outcome if Pulaski decided to invest in a publicly owned fiber network. In the spring of 2005, Pulaski developed a business plan that was approved in March by Tennessee's State Comptroller, as required by state law. In May, the city council voted to issue $8.5 million in General Obligation (GO) bonds to finance FTTH deployment and a data center.

Kelley had worked on a similar project in Hillsdale, Michigan, and even though Holcomb had asked him to work on the Pulaski project, Kelley was reluctant. Hillsdale had not pursued a network and Kelley did not want another disappointment. Once Pulaski's utility board and city council backed the plan, he knew the project had the support to move forward. Kelley accepted a position as Chief Marketing Officer for the utility. (Kelley talks more about his experience in Pulaski, Hillsdale, and his current role in Columbia, Tennessee, in episode 189 of the Community Broadband Bits podcast. Check it out to learn more.)

GO bonds are not one of the three most used types of financing for municipal networks but Kelley explained why they worked well for Pulaski. When a community chooses to fund any project with GO bonds, investors have an added measure of safety because the project and the loan are backed by the full faith and credit of the community. In other words, the issuing jurisdiction can use its taxing authority to pay back the debt, if necessary. As a result, the municipality, county, or other government entity issuing the bonds obtain very low interest rates. GO bonds require that the project developed be owned by the community and funds are typically used for projects that will be used by the entire community.

People Grow The Asset

Construction started in 2006, with fiber following the path of the existing power lines - when the lines were aerial, the fiber was installed on poles and when lines went underground, the new network followed suit. PES took the same approach with street lines and drops to homes. Line construction was completed in September 2006; the utility finished its Network Operations Center in November, and began testing right away. 

PES Energize began offering residential triple-play of cable TV, phone, and high-speed Internet services in January 2007 but its formal launch was not until the spring of 2007. When the network launched, it offered services at download speeds of 5 Megabits per second (Mbps), 10 Mbps, and 20 Mbps. Since then, speeds have increased. High-speed Internet access, video, and telephone are available in a variety of bundles or subscribers can purchase stand-alone Internet access for $35.95 (25 Mbps download / 5 Mbps upload), $75.95 (50 Mbps download / 7 Mbps upload), or $100.00 (100 Mbps download / 10 Mbps upload) per month.

By the time Wes Kelley left for his new position as Executive Director of Columbia Power and Water in 2012, PES Energize had achieved a 45 percent take rate. According to Mike Hollis, in charge of sales for PES Energize, the utility expands the network incrementally every year. By the end of January 2016, the network passed 5,609 homes and businesses. The utility's take rate is just under 49 percent in total with 2,729 of those properties passed subscribing to PES Energize.

According to Hollis, customers in rural areas are speeding up the expansions by footing the bill themselves. In PES' electric service area beyond the current network footprint, residents and business owners have approached the utility to ask for an estimate on the cost of expansion to their neighborhood. PES provides a figure for materials and pole attachment costs. Increasingly, these small pockets of rural neighborhoods, with nothing but dial-up or satellite, will chip in to pay for the construction. The neighborhood group cuts a check and the utility expands the network to that area.

Hollis noted that a local realtor is organizing the most recent example of a would-be subscriber funded expansion. He can't sell houses in his neighborhood where there is no high quality Internet access; homebuyers don't want houses with dial-up or satellite. He and his neighbors see the move as a necessary investment so he is leading the effort to obtain contributions from people in the neighborhood to pay for the fiber expansion.

Businesses In Mind

When PES launched, it also offered dark fiber leasing for organizations that wished to manage their own data needs. Most businesses in Pulaski purchase lit services and/or use the utility's data center. The facility housed a colocation facility, hosting services, and offsite data storage and was designed to withstand an F5 tornado.

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In 2011, Speers, who had transitioned from Mayor to Executive Director of the Pualski-Giles County Economic Development Council, discussed how the network had improved functionality for local businesses in an interview with Craig Settles. Whether a local printer sending artwork to Los Angeles or a graphic artist sending catalogue material to Canada, Pulaski businesses heaved a sigh of relief when they tapped into PES Energize. Businesses today overwhelmingly choose PES Energize - 82 percent of those passed subscribe.

From the interview:

"The golden rule of economic development is, take care of what you got. Take care of your existing industry first. There’s no question they will use it. If you’re lucky enough to get an industry to come in because they need the broadband, then that’s gravy.

During this current economic downturn, we’ve focused a lot of attention on our existing retail base and entrepreneur development. We’re teaching businesses how to maximize their use of the network so they can broaden their customer base nationally through the Internet. Our philosophy is to tie in the use of technology to help the businesses we have."

Looking At The Long Term

Pulaski has not experienced significant population growth since investing in PES Energize, but it has managed to avoid decline, a problem gripping similarly sized communities in the region. Tullahoma is a little over an hour away, Columbia is less than 45 minutes north; both communities offer potential employers municipal fiber connectivity. Pulaski made the investment first and can still compete for economic development opportunities in a peaceful setting.

When new businesses look for a location to open a facility where high-speed connectivity is a must, and search for a "Mayberry" to attract a quality workforce, Pulaski is on the short list because of its municipal fiber network.

Wes Kelley recognizes the long-term value of Pulaski's decision to create Internet network infrastructure. When we spoke with him for this article he reinforced what local officials and their constituents all over tell us - that the people of Pulaski knew the best course for themselves:

"It's a community investing in itself. Pulaski spent $8.5 million. They could have spent $8.5 million building a new rec center and a new pool but they didn't. They decided to put it in the air and in the ground to provide telecommunications infrastructure for the next 40 years. I think that's a powerful decision but it is a local decision…local control is critically important."

The FCC's Pro-Competition Agenda - Community Broadband Bits Podcast 192

This week we welcome Gigi Sohn, Counselor to Chairman Wheeler of the Federal Communications Commission, to Community Broadband Bits for episode 192. Before joining the FCC, Gigi was a founder of Public Knowledge.

Gigi discusses the pro-competition agenda that Chairman Wheeler has advanced, including the efforts to ensure communities can decide locally whether to build a municipal network or partner. We also discuss other elements of FCC action to encourage competition in the Internet access market, even how television set-top boxes fit in.

Echoing some of the comments I regularly hear from some thoughtful listeners, I asked if competition was the best approach given the argument that telecom, and particularly fiber, has the characteristics of a natural monopoly.

The transcript from this episode is available here.

We want your feedback and suggestions for the show - please e-mail us or leave a comment below.

This show is 15 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed.

You can download this Mp3 file directly from here. Listen to other episodes here or view all episodes in our index.

Thanks to Kathleen Martin for the music, licensed using Creative Commons. The song is "Player vs. Player."

Exploring the Huntsville Fiber Model - Community Broadband Bits Podcast 191

Last week, we were excited at the announcement from Huntsville Utilities in Alabama. Huntsville is building a municipal dark fiber network to every premise in its territory that will be open to multiple service providers. Google has already committed to using it to bring real connectivity to the community.

In this week's episode, 191, we are talking with Tom Reiman and Stacy Cantrell to understand the model. Tom is President of The Broadband Group, the consultant that is working with Huntsville on this project. Stacy Cantrell is the Vice President of Engineering for Huntsville Utilities.

We talk about how the model originated, some of the technical details behind the network, and what benefits they expect to see. This is an excellent discussion with many implications for the thousands of communities that want to improve Internet access locally but would prefer not to offer services directly.

The transcript from this episode is available here.

We want your feedback and suggestions for the show - please e-mail us or leave a comment below.

This show is 33 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed.

You can download this Mp3 file directly from here. Listen to other episodes here or view all episodes in our index.

Thanks to Kathleen Martin for the music, licensed using Creative Commons. The song is "Player vs. Player."

Springfield, Massachusetts Introducing Free Downtown Wifi Plus New Dark Fiber Capacity

Starting this spring, the City of Springfield, Massachusetts will offer free municipal Wi-Fi and new dark fiber capacity to a 7-block area of the city’s downtown known as the “Springfield Innovation District.”

As Masslive.com reports, the new dark fiber will create a connection between the city’s Springfield Innovation Center and an existing network of dark fiber capacity in this part of downtown. The publicly owned fiber currently provides gigabit connectivity to municipal buildings but the city will lease out excess capacity. The new Wi-Fi and dark fiber services are part of a broader plan aimed at boosting economic development and innovation in Springfield, the state’s third largest city at 150,000 and the fourth largest city in all of New England. 

The project is phase one of a broader plan to soon expand the network even further in order to reach an additional downtown area and all of the city’s public parks. Springfield’s Chief Information Officer Kevin Kennedy estimates the project’s phase 1 total cost between $50,000 and $100,000. While users interested in connecting to the dark fiber will contract with a private provider for Internet service, the city will be the service provider for the free downtown Wi-Fi.

Preparing for New Tourism, Increased Economic Development, Better Livability

Over the next two years, the city will welcome a new Union Station transportation center and an MGM Casino in the city’s downtown area. With the increased tourism, Kennedy told WAMC Radio that it would be “embarrassing” for Springfield not to have free downtown Wi-Fi.

Delcie Bean, the founder of a Springfield IT company and the creator a downtown-based tech training organization called Tech Foundry, believes the new network capacity is essential to attracting people to work, live, and play in downtown Springfield:

"Connectivity like this is like what electricity was to an earlier age," he said. " It opens up the possibilities for other things to happen because we will have this fundamental base." While pointing at a downtown park near his offices, Bean added, "If we are ever going to activate that park as a public work space, we are going to need to have Wi-Fi. Even food trucks use Wi-Fi these days to process credit cards. There is just so much you can't do without it."

Local coverage:

Muni Network in Huntsville Draws Google Fiber

Huntsville Utilities and Google Fiber announced today that the utility will construct a dark fiber network and that Google Fiber will offer services to the community via the city's new fiber infrastructure investment.

We applaud Huntsville and Google for helping develop an innovative model that will create more choices for local businesses and residents. We believe this is an important step that can lead to a true market for Internet access, allowing people a real choice in providers while ensuring the network is accountable to local needs.

Next Century Cities (NCC) describes the arrangement as a "promising new model for ensuring greater access to high-quality broadband Internet." We see this as a significant step forward in creating competition and bringing high quality Internet access to every one. For many years, we have seen communities desire to invest in infrastructure but not have to engage in service competition with powerful rivals like Comcast or AT&T.

Huntsville Is Different

Google Fiber is already known for bringing affordable gigabit service to subscribers in Kansas City and Provo, Utah and they have plans to expand in a number of other communities. Huntsville will be more than "just another" Google Fiber community because the infrastructure will belong to the community.

Other providers will be able to offer services via the network as well, ensuring more competition and providing choice for residents and businesses. Smaller providers will have an easier time establishing themselves in Huntsville with infrastructure in place on which to offer services. If subscribers are not happy with one provider, there is a good chance that there will be other options.

In Kansas City or Provo where Google owns the fiber network, the company ultimately decides where to expand. Here the Huntsville community can decide where to build the network. The utility will blanket the community in fiber, rather than building only in areas that have signed up a minimum threshold of subscribers. Because Google is not footing the capital bill, they will now have every incentive to encourage local leaders to make sure no one is left out.

Details

The city is deploying fiber for smart grid purposes and have chosen to lease out spare capacity to improve local connectivity. The dark fiber network will pass everyone but the city is not putting in the drops. The ISP, whether Google or another, will pay for and own the drop as well as the ONT to connect each premise. They will make ongoing payments to the utility for access to the rest of the network.

The utility estimates the project will cost around $55-$60 million reports AL.com:

"We are building the network for our own purposes," utility President and CEO Jay Stowe said in an interview. "It's going to have excess fiber that's available for lease, and Google will be the first company to lease that fiber."

Under the plan, Huntsville Utilities will own the system's fiber backbone, and Google will own the power line-to-home connections, handle all hookups and provide the services.

WHNT 19 News reports:

They [Huntsville Utilities] see it as a low-risk investment, as compared to administering the gigabit internet themselves, which would require a massive increase in personnel in an arena where they have limited expertise.

[Huntsville Utilities President and CEO Jay] Stowe says not only will consumers not see the infrastructure costs on their bills, they may see the outlay lowering their bills in the long run. "This project helps us to have other revenue streams that may help us manage rates even more in the future.”

The city and Google Fiber anticipate first subscribers will be connected by mid-2017 and project will be completed by 2020.

Highly Logical

The "Rocket City," home to approximately 180,000 people, began searching for a company to help them improve local connectivity back in 2014. The Mayor and his team have been working on the project for the past seven years. Huntsville is home to NASA's Marshall Space Flight Center; significant number of engineers and STEM industry graduates live and work there.

It was no surprise when the public expressed an interest in improving local connectivity in an informal 2014 survey. The closeness of Chattanooga's world-famous EPB Fiber network has also threatened Huntsville's business prospects. Local leaders don't want to lose economic development potential to other municipalities that have the connectivity employers need.

Lift Off!

Since the 1950s, when the U.S. Army began developing missiles there, Hunstville has attracted a smart, science, tech focused work force. In order to keep their workforce and their intelligent reputation, fast, affordable, reliable connectivity is a must:

"We already know Huntsville is a place where people do cool things, smart things, things that change the world," said Mayor Battle. "A rocket city deserves rocket speed, and that means a network that connects to the Internet at 1 gigabit per second. Your Internet will be 50 to 100 times faster than it is today." 

Boston Globe: Build A Muni

The Editorial Board from the Boston Globe recently kicked off a series titled "The Cutting Edge of the Common Good." The editors intend to offer suggestions for how to create a prosperous city through ideas to benefit Boston's 4.7 million residents. 

Their first proposal? Build a municipal fiber network.

In the editorial, the Board point out how the city has always been a cutting edge leader, from Revoluntionary War to same-sex marriage. But when it comes to developing the tech sector, the "City on a Hill" is being edged out by Chattanooga, Lafayette, Louisiana, and Cedar Falls, Iowa. High-tech innovators are flocking to communities with municipal fiber networks.

As the Globe notes, connectivity could be better in Boston:

The truth is that our tech infrastructure is in the same dismal shape as our roads and bridges. Boston, like a majority of American cities, pays more for slower Internet service than our international peers. If Boston is to remain a global hub of innovation — and on the “cutting edge of the common good,” as Mayor Martin J. Walsh promised in his State of the City address last month — it should build a citywide fiber-optic network that allows each residence and business an onramp to the information superhighway of the future.

Even though the city has its own conduit network and significant fiber assets, residents and businesses must seek service from large private providers. The Globe Editors believe the city should rethink the current approach:

But the City of Boston should not gamble its future competitiveness in a Mountain View lottery, nor should it entrust such vital infrastructure entirely to private hands.

The private market would be the ideal solution in an ideal world, but in Boston the market has failed.

The Globe points out the economic development, public safety, and community savings benefits that would accompany a municipal fiber network in Boston. They also point out the fact that a publicly owned network is one way to help shrink the digital divide between income levels.

The leaders at the Globe are not naive; they acknowledge that the task is expensive and will be fought, tooth and nail, by the big incumbent players:

Companies that currently provide phone and Internet service would view such a move by a city like Boston as a very serious — if not existential — threat to their bottom line. Telecoms are big employers, and they give heavily to political campaigns. Were such a system proposed, prepare for a deluge of ads smearing the venture as the Big Dig Redux.

But given that there does not appear to be any significant private investment planned by incumbents to upgrade Boston's connectivity, the Globe calls on the city's leadership to take control of the future…or risk stepping back:

And yet, is there anyone in Boston who yearns for a return of the filthy, noisy, elevated Southeast Expressway? The city once wisely buried a highway; now it’s time to bury a superhighway, too.

Muni Fiber Tennessee Twofer: Columbia and Pulaski - Community Broadband Bits Podcast 189

We cover a lot of Tennessee ground in this week's Community Broadband Bits podcast - episode 189 - from a cable network to muni Fiber-to-the-Home; Columbia to Pulaski. Wes Kelley, the Executive Director of the Columbia Power and Water Systems is our guest to talk about Columbia's cable and Pulaski's fiber.

He cut his teeth working with a Michigan community's public utility that ultimately decided not to get involved in telecommunications. But he moved on to build out a citywide fiber network in Pulaski before ultimately moving to Columbia, which was the last community in the United States to build a cable system (since then it has been all fiber).

He shares some of his lessons along the way, tips for customer service, and Columbia's plans for the future with their cable system. He also has some choice words for the big content owners that make the cable television business all but impossible for any reasonably sized cable operation.

The transcript from this episode is available here.

We want your feedback and suggestions for the show - please e-mail us or leave a comment below.

This show is 30 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed.

You can can download this Mp3 file directly from here. Listen to other episodes here or view all episodes in our index.

Thanks to Kathleen Martin for the music, licensed using Creative Commons. The song is "Player vs. Player."

Davenport Stepping Closer To Muni

Davenport, Iowa, is more committed than ever to bringing Fiber-to-the-Home (FTTH) to its residents and businesses.

At a January City Council public work session, current members detailed the city's plans for new members. Alderman Bill Boom noted that the community already has approximately 100 miles of fiber in place and by serving its own telecommunications needs, Davenport has saved $600,000 per year.

Connectivity As It Is Davenport

In January 2015, Davenport received the results of a feasibility study that documented lack of redundancy, inconsistent distribution of fiber, and complaints from businesses about speeds and costs. Incumbents are just not keeping pace with Internet access needs of Davenport's small business growth or the residential demand. Education and healthcare were two other areas where a fiber network could offer a long list of benefits to the community. The school district uses multiple providers because reliability is such a common issue.

People who live in Davenport also want better connectivity:

Residents, like retired University of Iowa Professor and resident of Davenport, Ezra Sidran also weighed in, saying they support a broadband infrastructure increase..

“I’m just for this, I don’t know the details all I can say [is] fiber optics are where it’s at,” Sidran said.

A Changing Community

Davenport, population 102,000, is part of the "Quad Cities" metropolitan area. The region includes four counties in northwest Illinois and southeastern Iowa and also encompasses Bettendorf, Iowa, and Rock Island, Moline, and East Moline in Illinois. The population of the entire area is approximately 384,000. 

In the 1970s and 1980s, the region endured some difficult economic times as the community shifted from agriculture and related manufacturing. International Harvester, John Deere, and Caterpillar factories all closed; the community has had to attract other employers. Hy-Vee, Tyson Fresh Meats, and Genesis Health System, are only a few of the major job located in the Quad Cities today.

Looking For A Partner

Davenport is seeking a private partner and even incumbent Mediacom has expressed interest in working with "Iowa's Front Porch." At a recent public meeting, a company representative stated that Mediacom "absolutely" will be a interested in a partnership. The city wants a partner to build and manage a network that Davenport will own. The consultants who completed the feasibility study recommend the city move forward with a Request for Quotation (RFQ).

At the next City Council meeting, members will dig deeper into the details and share their findings with the public:

“You will see what the proposals look like, what the monthly payments would look like and how the internet service providers that are going to ride on the network will make those payments,” Boom said.

Boom and Klipsch say it will be two years before this project is complete.

“We are committed to making this happen, it’s just going to be what’s the time period it’s going to take, to make it all come to fruition,” [Mayor Frank] Klipsch said.

Local video coverage: