Tag: "muni"

Posted December 11, 2009 by christopher

As someone who has long researched and followed developments in Burlington Telecom (BT), the city-owned triple-play full fiber-to-the-home network in Vermont, recent developments between BT and the Mayor's office have been deeply disappointing. For those who haven't heard, BT is in the middle of a major controversy -- and it is hard to tell just what is going on (for background prior to current problems, read my Burlington Telecom Case Study and Fact Sheet).

I have wanted to comment on the situation for many weeks but have been waiting as each day seems offer another piece of the BT puzzle. I'll be offering more commentary about it in the future. However, I do not want to the let the current problems lend any credence to the idea that BT has failed. BT is caught in the middle of a political controversy around the Mayor but should continue providing the best telecom services available in the community.

BT has two main problems currently:

  1. It has not passed the entire city within the timeline to which it agreed in receiving its Certificate of Public Good (CPG)
  2. BT has, apparently, borrowed $17 million from the city's pool (used generally for short-term financing of projects) in contravention of its CPG which states that any money borrowed from the City must be paid back within 60 days.

    This CPG condition makes running a network more difficult for BT than it would for a company like Comcast - who can readily self-finance short-term borrowing. Across the U.S., communities have to deal with laws and regulations that benefit private companies over public networks.

    When the economy fell apart, BT was unable to refinance its debt to continue its expansion and chose to borrow from the City to continue connecting new customers. This was the right decision - the CPG did not anticipate such conditions and the terms for outside financing in late 2008 were wretched.

I say "apparently" borrowed above because it is far from clear if all of those funds actually went to BT. As Steve Ross explains here, it is not even clear if BT really required all that it borrowed from the City. Until the Mayor can produce a thorough explanation, I think it prudent to...

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Posted December 10, 2009 by christopher
  • TMCNET interviews Jory Wolf - the CIO of Santa Monica's Information Systems Department - about their application for broadband stimulus funds. Santa Monica has long used its publicly owned network to expand broadband access in the community.

    Our Santa Monica City Net and City WiFi (News - Alert) project will provide the equipment and connections required to expand the City’s free WiFi service that delivers Internet access to the public at our libraries, open space areas, community centers, homeless shelter, senior centers and animal shelters. In addition, our project will provide a connection to over 200 ISPs to obtain affordable broadband options to local businesses and increase the competitiveness of our country’s preeminent post-production companies and intellectual exports located in Santa Monica, Calif.

  • South Hadley, a small town in Massachusetts, may expand its modest fiber network (currently connecting schools, police, and town hall to others in town. Its municipal power company is evaluating options.

  • Baltimore City Paper ran a column discussing the Monticello, MN, city-owned network and the attacks against it by TDS Telecom. This accounting of the history has some errant details, but I found it fascinating how far the Monticello story has spread.

Photo from public domain

Posted December 7, 2009 by christopher
  • Salisbury, a community in North Carolina building a city-owned full fiber-to-the-home network, has run into an unexpected difficulty: naming the new network.

    To put it simply, all the good names are taken.

    Mike Crowell, director of broadband services — he jokes that he is the director of BS — says the city can't find a name that it can both trademark and get a domain name for.

    The story has some entertaining suggestions - but the reason I wanted to note the article is because it ends with this:

    In coming weeks, the city will be purchasing and outfitting a marketing trailer, which it can send into neighborhoods and to community events to explain the new cable utility and get people excited about what's around the bend. The trailer will be plastered, of course, with the system's chosen name.

    This is a great marketing method - particularly if the trailer has computers showing what is possible with the new network in direct comparison to existing offers. Wilson's Greenlight Network also used this approach and reported that it was very successful.

  • South Carolina was unique in being the only state where the public controlled the spectrum available for WiMax and could have built a state-wide broadband network. Instead, they chose to sell it off to the private sector for a pittance.

  • Despite state-created barriers to publicly owned broadband networks in South Carolina, the town of Hartsville is studying the feasibility of a city-owned network. The new Mayor is supporting this initiative:

    Pennington spoke about a proposed broadband initiative he is pushing that would enable the city to create a fiber optic network and offer broadband services such as high speed internet, cable television and digital telephone service to city residents and businesses.

    Hartsville City Council has approved funding up to $5,000 to pay for a feasibility study into the prospect of such an initiative. Officials are...

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Posted November 18, 2009 by christopher

As the FCC continues to formulate a National Broadband Plan, the Institute for Local Self-Reliance has submitted comments [pdf] about publicly owned networks in response to the Request for Comments #7: "Comment Sought on the Contribution of Federal, State, Tribal, and Local Government to Broadband." In our comments, we highlight the importance of publicly owned broadband networks by noting many success stories and offering details on networks from Chattanooga, Burlington, Monticello, and Powell, Wyoming. We also offer some comments about middle-mile networks and networks that connect core anchor institutions, like libraries and schools.

Posted November 13, 2009 by christopher

Highland, a city in Illinois, has been recommended by the governor to receive a grant from the broadband stimulus program. Highland plans to build a full fiber-to-the-home network after first connecting the schools and public buildings (a phased approach that has worked well elsewhere). Stimulus funds would expedite the buildout that has already demonstrated strong community support.

Highland city voters passed — with 75 percent voting in favor — three referendums April 7 concerning the idea to bring fiber-optic cable connections to every home and business within the city. It will offer high-speed Internet service, telephone and cable TV.

Shortly after, the council had authorized construction and operation of a telecommunications and cable television system, while emphasizing the need for careful planning. The council also voted to set up a three-member Telecommunications Advisory Board to oversee the process.

Posted November 10, 2009 by christopher

One the goals of this site is to catalog reports, articles, and all things related to publicly owned broadband. A number of older articles about muni broadband still resonate today -- As part of its May 2005 issue, Broadband Properties offered a pro and con view of municipal networks. Carl Kandutsch, a former FCC attorney, wrote "The Case for Municipal Broadband." Other articles from that issues are also available here.

The piece generally focuses on matters of economics and law, but in an accessible manner. The threat of private, monopolistic service providers -- particularly in rural areas -- is indeed a significant motivation and reason to embrace public ownership.

He also delves into debunking specific arguments against municipal ownership and argues that publicly owned networks are at a disadvantage relative private companies:

The municipal balance sheet must then be compared with that of private firms existing actually or potentially in the relevant market, taking into account the often huge tax breaks granted to private sector communication firms, the economies of scale conferred on incumbents from ownership of pre-existing infrastructure and nationwide or international service areas, the freedom to contract with any other entity on any terms within the limits of the law and so on.

And

Moreover, whereas private firms are permitted to operate behind closed doors, municipal utilities must comply with numerous open-records requirements, and must secure public approval for all significant decisions. The level of public scrutiny under which a municipal utility operates ensures that significant operational inefficiencies will be short-lived, and that utility officials are politically accountable for their decisions.

Posted October 22, 2009 by christopher

For another real-world example of how companies respond to public entry into the telecom market (as opposed to theoretical arguments about crowding out investment), let's look back down to Lafayette and how cable incumbent Cox responded:

“Cox froze the cable rates in Lafayette, and they didn’t freeze the rates in other areas,” said Terry Huval, director of LUS, a municipally owned utility company which fought major incumbent opposition before building an FTTH network in Lafayette and starting to offer service earlier this year. “We figured our citizens saved over $3 million in cable rates even before we could offer them service.”

I have yet to see a cable company leave a market or reduce investment following the introduction of a public competitor. The opposite tends to happen - they increase investment and often drop prices or leave them lower than in surrounding, non-competitive areas. Often, the rates are not really advertised but if you call from the competitive area, they will offer a better deal:

Trae Russell, communications manager for EATEL, the local telephone franchise in Ascension, La., and some surrounding communities, had seen the same thing happen in his area, when EATEL started offering FTTH-based services in 2006. In fact, EATEL went so far as to take out an ad in the Lafayette newspaper, alerting cable customers there to the discounts that Ascension customers were getting and forecasting similar lower rates in Lafayette once the LUS network was in the works.

“It was an incredibly bold move on our part,” Russell said. “Cox came in with an incredibly aggressive promotion for TV service with every bell and whistle you could imagine. We couldn’t figure out how they could even make money on it. So we took out an ad in the Lafayette newspaper that basically said, ‘Hey Lafayette, look at the great prices you are going to get from Cox.’ Cox was not amused.”

This is also a lesson for those who want to build a public network. Don't expect to win just because you have a better service and you offer lower prices from what was available before a competing network is built. The incumbent has often already paid off its network. Additionally, incumbents are often larger companies that pay less for their television contracts, so they can lower prices farther than one might...

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Posted October 15, 2009 by christopher

Last year, Oklahoma City launched the world's largest muni Wi-Fi mesh network (not residential use, just public safety and other muni uses). Shortly thereafter, they won an award for the public safety aspects of the network.

A GovPro story now suggests networks like this Oklahoma City network could be leading a renaissance for muni wireless networks:

For instance, three years ago, Oklahoma City launched a muni-wireless broadband network using equipment from Tropos Networks covering 555 square miles. Today it has been adopted as the primary network used by all city departments. 


Mark Meier, Oklahoma City’s chief technology officer recently indicated that the city has derived approximately $10 million in value from its broadband network to date. "Some of our critical public safety applications required redundant wireless connectivity, but the cellular data cards have remained virtually unused and handle less than 1 percent of our traffic which has resulted in significant cost savings for the city," he says.

Posted October 8, 2009 by christopher

Many have held up the CyberSpot Wi-Fi network in Florida's Saint Cloud as a successful example of public provisioning of wireless. From my perspective, the network was always interesting in that it did not attempt to pay for itself out of network revenues. The city built the network and provided services over the 15 square miles for free - they viewed it as a public service. The network start-up cost was $2.5 million and was funded by the Economic Development Fund. It cost another $370,000 each year in operating costs - some $30,000 a month. Some 77% of the city used the network within half a year according to Free Press. St. Cloud has some 30,000 people and had at least 8500 unique devices connect to it monthly in recent months - due to NAT routers (non-geeks, ignore this) we can safely assume that there are more than 8500 devices using the network. In order to keep the local taxes level, the City Council decided to cut Cyberspot along with a number of a other programs. Popular outrage led to another meeting in which many people testified that they wanted the network to remain funded. The Orlando Sentinel covered the extension of the city service for 3 more months and public reaction:

Scores of angry residents packed commission chambers Thursday, demanding that the city not pull the plug. " St. Cloud is not a hick town anymore," said resident Keith Harris. "We're country folks, but we're not backwards. One of the reasons for that is our Internet."

One of the people (in part 2 - the second video below) noted that the cost to him for raising taxes to cover CyberSpot would be a few dollars a month. The cost of eliminating CyberSpot to him is far greater - he will now have to pay ten times as much to get an Internet connection. I watched the first half hour of the meeting and found the public comments quite interesting. The rest are probably interesting as well - you can find all the videos here. Update: The network stopped offering public service on February 16, 2010.

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Posted October 2, 2009 by christopher

At a general discussion yesterday at the NATOA National Conference down here in New Orleans, I was stunned to hear someone from the muni world accept the idea that some municipalities do not want to compete with the private sector. I say stunned, not because I'm surprised to hear that some towns do not want to provide telecommunications services in competition with the private sector, but because towns "compete" with the private sector in many ways that go unnoticed.

Police and education are two examples in which every community provides services in competition with the private sector (security guards and private schools). Most communities have libraries - taking sales away from hard-working bookstores. Some towns provide municipal golf courses or public swimming pools. There are many ways in which it is acceptable for the public sector to "compete" with the private sector.

The problem with accepting the blanket statement that the public should not compete with the private sector is that it 1) is factually inaccurate and 2) suggests that to provide telecommunications services would be a substantial deviation from the historic role for municipal and local governments.

The truth is that local governments have long stepped in, where necessary, to ensure the community has everything it needs to be successful. Interestingly, this has included both municipal liquor stores and lumber yards in many remote communities. Properly posed, the question is not whether communities should deviate from their historic role of avoiding competition with the private sector, but whether telecommunications falls into that area that communities have long elected to serve when a community need is unmet.

This is a question with which most communities will wrestle, but they should do so on honest terms. Though providing telecommunications services in some communities may be novel, they have long "competed" with the private sector in other generally accepted areas. Communities will come down on both sides of providing services and time will tell if they made the right decision for their community.

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