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Sharon Township Votes Down FTTH Proposal; Did Misinformation Sway Voters?

June 4, 2018

Michigan rural communities where big ISPs won’t offer high-quality connectivity are tired of waiting for relief that won’t come. One at a time, they’re taking action by presenting proposals to members of the community, discussing the possibilities, and seeking the authority to move forward. The specifics of how they fund that goal are unique to each community; in Sharon Township, the town held an election on May 8th to let voters decide. After a somewhat contentious campaign, the proposal to use a special property tax assessment to fund fiber optic broadband infrastructure did not pass.

Millage Method

A few months ago, we described how voters would decide in a spring election whether or not to authorize a $4.9 general obligation bond proposal for fiber optic infrastructure. The community would use the “millage” system to calculate how much local property owners would contribute toward paying back the bond. As Gary Munce from nearby Lyndon Township and Ben Fineman from the Michigan Broadband Cooperative explained in episode 272 of our podcast, a millage is calculated based on the taxable value of real property. In Sharon Township, the proposal would have added an average of about $3.2583 per $1,000 of taxable value to local property owners' tax bills. In order to help people determine how much they would owe under such a payment structure, the city hosted a “High-Speed Internet Millage Calculator” on their website.

Sharon Township planned to take the same approach as Lyndon Township, where a similar proposal passed last summer with 66 percent of voters approving the millage and 34 percent voting no. In Sharon Township, the numbers were similar but the result was reversed with only 319 voters approving the millage and 587 voting no.

Misinformation About Munis

In a May 2nd article of the local Sun Times News, Sharon Township Supervisor Peter Psarouthakis published an appeal to voters to make their decision on May 8th based on facts, rather than falsehoods. According to his piece, misinformation was being circulated in the community. For example, Psarouthakis had seen signs posted that claimed the project would cost $10 million or $6 million, when the actual projected cost is $4.9 million.

There was also a privately maintained website that claimed that a wireless provider had made an “actionable proposal” for a wireless solution, which was inaccurate. According to Psarouthakis’s article, the president of the WISP had publicly stated that fiber would be the best solution to bring high-quality connectivity to every premise in the community. The WISP also expressed an interest in bidding on a fiber optic solution. Apparently, documents from a meeting with the WISP were made public on a website dedicated to defeating the measure. The documents were presented in a manner that gave readers the impression that the WISP had made a formal proposal, which was misleading. The website hosted several documents we've seen used in other campaigns, along with several pieces that locals opposed to the project created addressing specifc issues.

Another issue that Psarouthakis addressed was the misconception that property owners with large tracts of land, such as farmers, would pay a disproportionate amount toward repaying the bond due to the millage method. He wrote:

This is also FALSE. Looking at all taxable property in the township it is clear that land size does not always equate to the highest taxes paid. This is due to things such as agricultural land exemptions. There are MANY homes that are rather expensive on smaller parcels of land with a much higher assessed and taxable value than many farms. Again, just because someone owns a lot of land does not mean that their land has a higher taxable value than a home in the township.  YOUR TAXABLE VALUE is different than your assessed value- THIS IS VERY important when calculating your potential costs.

So Much Going on Here

Unfortunately, the issue of overburdening local farmers appears to have been nursed to throw suspicion on local elected officials and citizens who supported the project. The website also depended on several sources known to disseminate false information, such as the Taxpayers Protection Alliance. MuniNetworks.org readers will remember their shoddy “Boondoggle Map,” a travesty of research that we felt compelled to address in our Correcting Community Fiber Fallacy series

Those that opposed the Sharon Township plan appeared to do so based on a belief that “the future of rural Internet access is wireless.” While it’s true that fixed wireless technologies have greatly improved in recent years, fiber optics are necessary to provide backhaul for fixed wireless networks to function, including 5G.

Like so many others who have been influenced by the 5G hype, those who took the time to prepare and maintain the website try to argue that 5G will come to the rescue in Sharon Township. Much of the chatter around the rural 5G hero these days is marketing hype distributed by the big ISPs that still have years of work to deliver on the promises they say are “coming soon.”

Learn more about the 5G hype so you’re prepared with the facts by listening to Christopher’s podcasts with consultants Eric Lampland from Lookoutpoint Communications and Doug Dawson of CCG Consulting.

Local Decisions

Sharon Township voters have the right to decide whether or not to support a publicly owned Internet infrastructure project. Local communities are the only ones who understand what the community needs and the unique character of the people who live there. It’s unfortunate, however, that making an informed decision is incredibly difficult because organizations such as the Taxpayers Protection Alliance continue to publish the same drivel that influences decision making. Rather than making a choice based on facts, voters are swayed by the big ISPs that do all they can to preserve their own status and prevent competition.

Tags: sharon township mimichiganlyndon township mielectionmisinformation

Connectivity Purgatory: Frontier Delays Small ISP’s Fast Network

June 1, 2018

It took an extra year for a community in Minnesota to finally see high-quality Internet service. Balaton spent an extra year in connectivity purgatory while Frontier delayed a much-needed project. To learn more, we connected with the Balaton and Marshall Economic Development Director Tara Onken and Woodstock Communications Vice President and General Manager Terry Nelson.

Balaton: An Underserved Community

Balaton, is a small town of 600 people in Lyon County, located in the southwest area of the state. Balaton’s Internet service is dismal; residents have access to satellite, fixed wireless, or DSL. Satellite is unreliable, and the fixed wireless services’ max speed is 5 - 10 Mbps. DSL service varies based on how far the home is from the central office. In some places in town, DSL should be able to reach broadband speed -- 25 Mbps (download) / 3 Mbps (upload), but in reality, DSL is slow and unreliable because it is based on old copper lines. 

In 2016, the small private company Woodstock Communications decided to improve connectivity in Balaton. Woodstock already had service to a few local businesses and other members of the community were asking for service. When the Minnesota Border-to-Border Broadband Program grant applications opened, the company requested a grant of about $413,000

The goal was to bring Fiber-to-the-Home (FTTH) service of 1 Gigabit-per-second (Gbps), upload and download, to the underserved residents -- 40 times faster than broadband. FTTH is the fastest, most reliable technology available but also most capital-intensive. It’s available to only about 25 percent of the U.S. population.

Minnesota’s Border-to-Border Broadband Program offers matching grants to broadband projects in unserved and underserved areas. The program aims to meet certain speed goals set by state law: By 2022, all Minnesotans should have access to 25 Mbps / 3 Mbps. By 2026, all Minnesotans should have access to 100 Mbps / 20 Mbps. 

Woodstock Communications and the town of Balaton’s economic development department spent the summer of 2016 drumming up support throughout the community. Many community members, small business leaders, and local officials made it clear that Balaton was practically unserved: they could not get high-speed Internet service.

The Challenge

Frontier, the fourth largest DSL provider in the nation, had a different plan. The company immediately challenged Woodstock’s grant. Frontier claimed that the DSL in several areas within Balaton could, or would soon, support broadband. Since mid-2015, the Federal government has provided Frontier with $27.5 million a year in Connect America Fund II grant funds to improve connectivity in rural Minnesota, including Balaton. The Federal government subsidized Frontier to increase speeds to at least 10 Mbps / 1 Mbps.

The Border-to-Border Broadband program is not intended to fund projects where a provider is already meeting the state goals. Frontier’s challenge to Woodstock Communications was found to be credible:

“Frontier indicated it was upgrading service to speeds of at least 25/3 Mbps to all locations within the City of Balaton except for a dozen locations in the northeast corner of the city; anticipated availability year end 2016. A letter was sent to Frontier on January 26, 2017, indicating that its challenge was found to be credible and requesting the company to submit documentation upon service being made available, the addresses served, and the download and upload speeds provided.” (DOCX 2016 Challenge Document

Frontier replied to the Minnesota Broadband Office detailing how they offered broadband in certain sections of the town and speeds between 10 Mbps and 25 Mbps in other areas. Balaton’s Economic Development Director Onken followed up with Frontier and learned that the company had no plans to improve service in 2018. Frontier would possibly improve service by 2020.

This was unacceptable. The town of Balaton and Woodstock Communications immediately contacted the Minnesota Office of Broadband and Development to find out what could be done. Woodstock set up an online portal where community members could log the actual speeds they received from Frontier versus the speeds to which they had subscribed. 

Victory

Frontier, meanwhile, may not have read the fine-print -- the company had not killed the project. 

“For an application from an unserved area, the challenger must document that service is or will be provided at speeds of at least 25 Mbps download and 3 Mbps upload. For an application from an underserved area, the challenger must document that service is or will be provided at speeds of at least 100 Mbps download and 20 Mbps upload.” (PDF Grant Challenge Process 2016)

Woodstock Communications could receive the grant the next year as Balaton was now marked as an underserved area. This process, however, was not automatic. Woodstock Communications had to reapply for the 2017 grant cycle.

It was a bittersweet victory for Balaton and Woodstock. The project had been delayed by a year, thanks to the meddling of Frontier. Residents had to spend another year with slow DSL connections and subpar service. The grant funding came through at the end of 2017, however, and Woodstock could finally move forward.

Balaton will see FTTH service capable of 1 Gbps for both download and upload speed. That’s ten times faster than the Minnesota 2026 goal of 100 Mbps. The community will dedicate $1 million in local funding to the Border-to-Border grant for about $413,000 toward the project. Approximately 300 households and 30 businesses will finally have high-speed Internet access.  

The Right of First Refusal

This situation is all too common: An ISP providing subpar service delays another ISP, cooperative, or municipality from receiving a grant to build a better network. The ability to disrupt a project in such a manner is the incumbent’s “right of first refusal.” In theory, it prevents the government from subsidizing an area that does have, or will soon get, broadband service. In practice, it derails projects and leaves residents without high-quality Internet service.

As the case of Frontier and Woodstock shows, the right of first refusal in Minnesota’s Border-to-Border Broadband grant program needs an upgrade. The program considers projects based on the categories of unserved and underserved, valuing them differently. This is why Frontier only has to show that it could (mostly) meet Minnesota’s 2022 goal in order to delay a project that far surpassed the 2026 goal.

This is not just a Minnesota problem. A few years ago in Colorado, CenturyLink took advantage of the right of first refusal and blocked a fiber project from a small ISP called Clearnetworx. Taking advantage of its right of first refusal, CenturyLink swooped in and took some of the grant money that Clearnetworx had applied for to deploy a high-quality network. Instead of building a FTTH network, which had been Clearnetworx's plan, CenturyLink spent the funds on improving the subpar DSL service. The small town of Ridgway, Colorado, was cheated out of a next-generation network, and taxpayer funds were wasted on older technology. 

When the reality of the situation came to light, Colorado’s legislature changed the right of first refusal in April 2018 to prevent such a debacle from happening again. Like Minnesota, Colorado has a state broadband grant program that provides local ISPs with grants to build next-generation networks. Fixes to Colorado's right of first refusal mean that, within a year, the incumbent ISP exercising it must meet or exceed the speed tiers of the proposed project and rates must be comparable. This means that communities will receive better service and, hopefully, competitive rates.

Minnesota's Border-to-Border Broadband Program has been held up as a model by other states considering similar methods to boost deployment. The program has helped bring better connectivity to many residents, businesses, and entities in rural areas of the state even though the program is only a few years old. As the state continues to refine the program, officials can use the experiences of communities like those in Balaton and Ridgway, Colorado, to improve it. Other states that are establishing their own programs can also take heed of these situations in order to create effective programs with maximum impact.

Image credit Discover Southwest MN.

Tags: frontiercenturylinkminnesotacoloradoright of first refusalridgeway cobalaton mnfundingstate policy

Port and PUD Partnering for Fiber in Skagit

May 31, 2018

Public entities in Skagit County, Washington, are joining forces to improve connectivity in rural areas while developing infrastructure to connect the entire county. Earlier this month the Port of Skagit and the Skagit Public Utility District (PUD) entered into an agreement to form an entity to develop an open access network in keeping with the county’s strategic fiber plan.

Strategic Plan

In March 2017, the county, Port of Skagit, and the Economic Development Alliance of Skagit County developed the Skagit County Community Fiber Optic Network Strategic Plan. Within the county, the cities of Mount Vernon and Burlington own fiber networks; Anacortes is in the process of developing a municipal network. Private companies also have infrastructure within the county. These local communities in Skagit County are independently moving forward by improving their connectivity, but rural areas and smaller towns don’t have the connectivity needed for economic development or the resources to develop their own publicly owned networks.

From the Fiber Optic Plan: 

The primary goal is to guide development of a countywide, carrier grade, open access fiber optic network that will deliver affordable high speed Internet access to the citizens of Skagit County for the purposes of economic development, education, public health and safety, and transportation. It is our goal to deliver carrier grade fiber optic infrastructure from Anacortes to Concrete.

To carry out the mission of the Plan, the Port and the PUD will work together to oversee the development of additional fiber running from Anacortes, on the far west of the county, to Concrete located near the middle of the county. Along the route, the network will integrate connections in the communities of Mount Vernon, La Conner, Burlington, Sedro-Woolley, and Hamilton. They hope to also expand connections to smaller rural communities along the route.

Learn more by reading the plan.

SkagitNet

In accordance with their agreement, the Port and the PUD have formed SkagitNet, which will handle the fiber optic network construction. The next step will be developing an operating plan to determine the roles each will play in SkagitNet. The Port will have the responsibility to ensure that the Fiber Optic Plan is implemented.

The Port is in the midst of building two segments already: between Anacortes and Mount Vernon and another segment between Anacortes and La Connor. Design for the next segment is underway. The Port has also entered into interlocal agreements with Burlington and Mount Vernon that will allow the new infrastructure to connect to those cities’ publicly owned fiber optic networks.

The public-public partnership was borne out of the needs of the two partners as well as the region’s community. According to PUD Commission President Robbie Robertson, both the Port and the PUD have been looking to improve their infrastructures for years. 

“The port recognized they needed to improve their overall system, as did we,” Robertson said. “It was decided the two primary entities that were best qualified to go through this process of laying out the backbone was the port and PUD.”

SkagitNet is the first company formed between a port and a public utility district in Washington for the purpose of completing a community project, he said.

2017-Community-Fiber-Optic-Network-Strategic-Plan-FINAL.pdfTags: port of skagitwashingtonskagit public utility districtpartnershipanacortesmt vernonburlington wamaster plan

Why 25 Mbps / 3 Mbps is a reasonable minimum standard in 2018

May 30, 2018

The definition of “broadband” has changed over the years to reflect the way we use the Internet. From a mere 200 kilobits per second (Kbps) in download speed in 1996 to 25 megabits per second (Mbps) in 2015, it’s also important to remember that download speed is only part of the definition. While lobbyists for big ISPs argue the 25/3 standard is too high,  25 Mbps (download) and 3 Mbps (upload) is a reasonable minimum standard for broadband in 2018.

#1 /Turn off that video! I need to make a phone call!/ 
Back in the day, we used to accept that accessing the Internet meant we couldn’t make phone calls. Technology has advanced, and now that seems ridiculous. In 2018, general household Internet use requires at least a 25 Mbps download capacity so that we can all use the Internet without disrupting each other. 

Here’s the Federal Communications Commission’s (FCC) handy chart:

 

  Light Use
(Basic functions: email, browsing, basic video, VoIP, Internet radio) Moderate Use
(Basic functions plus one high-demand application: streaming HD video, multiparty video conferencing, online gaming, telecommuting) High Use
(Basic functions plus more than one high-demand application running at the same time) 1 user on 1 device  Basic Basic Medium 2 users or devices at a time Basic Medium Medium/Advanced 3 users or devices at a time Medium Medium Advanced 4 users or devices at a time Medium Advanced Advanced

Basic Use = 3 - 8 Mbps

Medium Use = 12 - 25 Mbps

Advanced Use = More than 25 Mbps

Pew Research found in 2017 that a regular U.S. household has 5 devices and that 18 percent of households actually have 10+ devices. Too many people get caught up in how much capacity a single device needs, but our households have many devices that are each vying for access. The question is whether a connection can handle the peak demand, not average.

#2 Creators, Not Just Consumers

Sure, Internet access is great for watching cat videos, but it’s also great for sharing information, which may require a high-capacity upload speed. If a subscriber wants to add videos to YouTube, participate in a job interview over Skype, or upload soil information for precision farming, they’ll need a decent upload speed.

For an HD Video Call, Skype recommends an upload speed of at least 1.5 Mbps. The livestream camera company Mevo recommends a minimum upload speed of 5 - 10 Mbps for its products. For Voice Over IP (VOIP) telephone service, subscribers should have an upload speed of 3 Mbps. Farmers are uploading information on their soil and crops for analysis. Since 2012, many farmers in the midwest have used GPS soil sampling to improve crop yields. Precision agriculture continues to grow as an industry.

In 2014, many people and organizations recommended 3 Mbps be the standard to the FCC, and that’s what they adopted in their 2015 Broadband Progress Report. Check out pages 19-34 for an in-depth discussion on the broadband standard.

We want to stress that we believe 25/3 is a reasonable minimum broadband definition. We believe there are many benefits to higher capacity connections and that communities absolutely need to do more than the minimum.

#3 Canada’s Aiming Higher

At some point, probably with the next administration’s Federal Communications Commission, the U.S. will again raise the minimum speed for broadband to be consistent with technologies at the time. The FCC changed the definition in 2010 to 4 Mbps and again in 2015 to our current standard. For more details, the BroadbandNow Team explores the history of the term and explains why the definition must continue to change.

The U.S. can’t firmly agree on 25 Mbps/3 Mbps: Many FCC subsidy programs only require ISPs to offer speeds of 10 Mbps (download) and 1 Mbps (upload). As of 2018, the federal government was still subsidizing new networks that can’t support broadband.

Meanwhile, Canada is moving ahead. The Canadian government has announced a goal of 50 Mbps/10 Mbps. Only 2 million Canadian people do not have access to that speed. A broadband standard of 25 Mbps/3 Mbps isn’t that ambitious and is a good minimum for current usage.

TLDR;

U.S. households use many Internet-connected devices simultaneously, so they need high-speed downloads. People are creators, and they need to be able to upload videos and other content at a reliable rate. Look: Canada has higher standards than we do.

Image credit Slon Pics, via pixaby.

Tags: broadbanduploadspeedfccfederal

Transcript: Community Broadband Bits Episode 308

May 29, 2018

This is the transcript for episode 308 of the Community Broadband Bits Podcast. Mayor Marian Orr of Cheyenne, Wyoming, joins the show to discuss broadband access in the state. Listen to this episode here.

Marian Orr: The incumbents will claim that we are actually a terabyte city and I have yet to see that.

Lisa Gonzalez: This is episode 308 of the Community Broadband Bits podcast from the Institute for Local Self Reliance. I'm Lisa Gonzalez. Cheyenne, Wyoming, home to more than 60,000 people, seems like a place densely populated enough to encourage the incumbents to offer fast, affordable, reliable connectivity. While big ISPs claimed that the city is sufficiently served, businesses and residents don't agree. Speeds are not where they need to be and rates are high. In order to solve the situation, community leaders, including Mayor Marian Orr, have been looking into possible solutions. Mayor Orr took some time out of her schedule to talk to Christopher for this week's podcast. In addition to some of the steps the community is taking, Mayor Orr and Christopher discussed Senate File 100, a piece of legislation passed during Wyoming's most recent session to improve broadband access. The bill started out as a way to provide resources to local communities, but as Mayor Orr describes, incumbents intervened and the outcome changed significantly. Christopher and the mayor talk about the steps Cheyenne has taken so far and where they're headed next. Onto the interview.

Christopher Mitchell: Welcome to another edition of the Community Broadband Bits podcast. I'm Chris Mitchell with the Institute for Local Self Reliance up in Minneapolis. Today I'm speaking with Mayor Marian Orr, the mayor of Cheyenne, Wyoming. Welcome to the show.

Marian Orr: Good morning.

Christopher M: Well, I'm very excited to speak with you. I've been through Wyoming a couple of times. It is a crazy beautiful state. I get a sense you've been around all parts of it, and I'm curious if you can tell us a little bit about your corner of Cheyenne currently.

Marian Orr: Our state is beautiful. We, here in Cheyenne, we are in the southeast corner with our population is about 63,000. We are just only about a hundred miles away from Denver. So we are what is considered a part of the Rocky mountain front range.

Christopher Mitchell: And how has broadband — I mean city of 63,000 I would think it's, I would guess you have a pretty decent cable system, some DSL. What is the situation from your perspective?

Marian Orr: Well, the situation here in Cheyenne is one that there are "haves" and "have-nots" as is probably the case with a lot of communities. Depending on if you're downtown, there's fairly good high-speed connectivity, but it's pretty costly when we look to some of our other sister communities around the state as far as what you actually get for the dollar.

Christopher Mitchell: And so are you hearing from constituents then, and is it a broad range of constituents, regarding their experiences?

Marian Orr: Boy, since taking office I have heard from some folks, both residential and commercial, really questioning the high cost for you know, the somewhat not-so-fast services and you know, the definition of what is high-speed Internet is a little bit different for everybody. But, certainly at least in our downtown hub area, we really want to promote one one gig service at an affordable $300-, $400-a-month kind of price. And, right now, it's closer to $2,000 a month. So, it's pretty costly.

Christopher Mitchell: I assume that's got to be a pretty big challenge. You're not that far from Fort Collins either, in which they have, I think a more reasonably priced gig already and soon we'll have a rock-bottom priced gig. Are you fearing a little bit of sort of competition for economic development in a city so close to you?

Marian Orr: Absolutely, we are. Your listeners may or may not be aware Fort Collins has decided to go to, I believe, a municipally owned system, which will certainly help control costs. And, when it comes to attracting and retaining businesses, we certainly do look at our competitive communities across the border and for that reason I established a broadband task force and they've been hard at work at creating some policy recommendations for my administration.

Christopher Mitchell: One of the things that I hear from mayors' offices and certainly city council members, is they hear frequently from incumbents that there's no need to do anything, that they have the situation in hand. Is that a message you've been getting?

Marian Orr: It is a message I've been getting and it's so frustrating and it — the incumbents will claim that we are actually a terabyte city and I have yet to see that or believe that it's anywhere close to being reasonably priced. And so it's definitely a tale of two different perspectives.

Christopher Mitchell: Right, in some ways it would be almost as though the interstate went through Cheyenne and you didn't have a single road otherwise. And people tell you, "There's no problem. We've got this incredible interstate."

Marian Orr: Yeah, absolutely! And it may or may not be open.

Christopher Mitchell: Right, and it doesn't even have on-ramps are off-ramps.

Marian Orr: Yeah, it's definitely frustrating in conversation.

Christopher Mitchell: To some extent, I feel like you may be better equipped than others to deal with this because you have a background in lobbying and I'm curious if that background maybe makes you more frustrated or better able to deal with hearing those claims when you know that your downtown needs better service for its businesses.

Marian Orr: Well, absolutely. My background in lobbying has served me well as far as being able to certainly navigate the legislative process regarding some legislation that was carried through last year. And the other double-edged sword is that the lobbyists for the incumbents are also colleagues. I've known them for years, and so at times we agree to disagree and not be disagreeable.

Christopher Mitchell: That's good. In a smaller state, it's essential, I'm sure.

Marian Orr: Absolutely.

Christopher Mitchell: So, let's talk a little bit about that. You're the capital city, so you have the luxury of being able to be more involved in state legislation. There was a bill that was commonly called SF 100, I believe, that was a push to try and deal with encouraging more investment in broadband in the state. Can you tell me a little bit about that, what the initial idea behind that bill was?

Marian Orr: Correct. So the original thought behind Senate File 100 was to provide communities with basically a grant funding availability to better increase their connectivity. And throughout the legislative process, it was really kind of scaled back to really service more of the rural areas that are truly underserved and I can appreciate that, by all means. And so what the legislation basically ended up doing was enabling and establishing a broadband coordinator for the State of Wyoming and creating an advisory council. And it's my understanding that the state's currently looking at hiring that state coordinator and creating that advisory council.

Christopher M: My understanding of the processes is that the sponsor was pretty frustrated in that, and I don't even know if the sponsor was a man or a woman, but I remember that the sponsor was not really consulted when the bill was changed significantly, which it seems like a breach of common practices.

Marian Orr: Certainly that was a bit of a bone of contention in that the lobbyists for the incumbents were not very pleased with the initial draft as it was written and pooled their resources together and proposed a really substantial amendment, if you will, almost a substitute bill. And then that was scaled back as well, too. So this is one of those where certainly it took a lot of communication, but it's also — I shouldn't say, it's not too uncommon in this budget session in even-numbered years, such as our last budget session was, we actually are only in session for 20 days, and so that's a very short amount of time to pull together a good piece of legislation that works for everybody.

Christopher Mitchell: Right. It's a good reminder of the stresses that people are working under with all the different issues. I am curious, so in the original, my impression was, and I admit that I didn't dig as much into this as I really should have given my position, but it seems to me like it was a sense that originally that the state was going to give money to localities and have them use it more broadly as they saw fit, and it seems like now it's less money and it's going to localities with more stringent conditions on how they could use it. Is that accurate?

Marian Orr: That's a very accurate description of really what happened. The initial legislation, for example, I believe it's something that my community, that Cheyenne could have availed itself to and instead it was scaled back to really pretty rural areas in a very narrow, more narrowly defined service, and with less funding.

Christopher Mitchell: One of the things that I thought was intelligent and I hadn't seen this in many other places, was that it focused on two different things. One was residential access and I don't think Cheyenne would've qualified for that, but the other was very focused on the business district access. Can you just maybe explain why that's important?

Marian Orr: We have found that it's very important to have those two different conversations because certainly residential is important. And in some areas it's, the speeds are actually quite, quite slow. And so, residential is certainly one conversation, but at least for my administration we have, our focus has been on commercial, you know, as far as prioritization because without jobs you really don't then have the residents. And to really grow our community and provide competitive wages and high-paying jobs, we need high-speed access to our businesses.

Christopher Mitchell: Well, what is the path forward then? What are you going to be able to do next?

Marian Orr: Well, locally, the broadband task force that I've established, they're working this week to finalize their memo to me regarding policies that we can work on here in Cheyenne. One policy that I expect to see is essentially a one dig policy that would help certainly residential as well as commercial. Basically, when we open up the streets and do some work, you know, look at a very minimum lane conduit to better ease access. And then, statewide, I expect here probably shortly in the next few weeks and early coming months for a state coordinator for broadband to be named as well as members of that state advisory council.

Christopher Mitchell: My experience here in Minnesota is having a very high-quality person in that position makes all the difference in the world. So, I certainly hope that they find a high-quality person that can do the work. I'm curious about the distance that you are from Fort Collins, because I know on the map it's pretty close, but politically it's, it's quite far away and so I'm curious if you could just walk me through the you know, as a more conservative city in a much more conservative state, is there any tension with the city being more involved with this process?

Marian Orr: Well, we certainly are different politically than Fort Collins. As you mentioned, we are much more conservative and services that would be municipally owned that would go over like a lead balloon in my community and I'd have to agree with that. I really believe in private sector and in competition. And, so I think what we're going to be looking at is maybe a hybrid or a mix. We are looking at, you know, the big phrase is "public-private partnerships" and how we can possibly work with the different companies, including the incumbents and combine that with perhaps lessening regulations on our end such as, Right-of-Way fees that we tend to charge and just continue that conversation forward.

Christopher Mitchell: Yeah, one of the things that we've certainly been inspired by is some models coming out of Idaho and Montana. Where Ammon, Idaho has a terrific model, which some larger cities are contemplating, and Bozeman has a very interesting approach in which they've created a nonprofit open-access network. So, there's all kinds of examples to draw on, fortunately.

Marian Orr: There are. What's exciting is that there's a lot of conversation about this and I feel really fortunate to be able to have conversations with other mayors, certainly around the region, if not around the country.

Christopher Mitchell: My last question is about the task force, and it's, it's a challenge I think, I would suspect because you have to include the incumbents in a task force that is trying to solve a problem they generally won't admit exists. And yet, one wants to have a task force that's relatively united at the end of the day. And so I'm just curious if you could share a little bit about the pressures of creating a task force that will be able to come up with real recommendations rather than either be un-credible or just fall into infighting.`

Marian Orr: Well, that certainly was a challenge. I'd be lying if I didn't say that my first inclination was not to include the incumbents on the task force, but I knew better politically that it's best to bring everybody to the table and certainly some of the conversations were awkward. Awkward is probably the best way to describe them. What we have is a recommendation that will be coming forward with more broad generalizations that have included the incumbents. And then, I suspect what we will see will be some sub working groups on other specific issues that might exclude the incumbents in that conversation.

Christopher Mitchell: Okay. Well, I appreciate getting a sense of reality on the ground. I'm often talking with people that are telling elected officials how to make decisions rather than actually weighing those decisions. So, I appreciate the time you've taken today with us.

Marian Orr: My pleasure.

Lisa Gonzalez: That was Christopher with Mayor Marian Orr from Cheyenne, Wyoming on state legislation and the legislative process and the community's plans to improve local connectivity. We have transcripts for this and other podcasts available at MuniNetworks.org/broadbandbits. Email us at podcast@muninetworks.org with your ideas for the show. Follow Chris on Twitter: His handle is @CommunityNets. You can also follow MuniNetworks.org stories on Twitter. The handle is @MuniNetworks. Subscribe to this podcast an the other ILSR podcasts, Building Local Power and the Local Energy Rules podcast. Access them on Apple podcast, Stitcher, or anywhere else you get your podcasts. Never miss out on our original research: Subscribe to our monthly newsletter at ILSR.org. We want to thank Arne Huseby for the song "Warm Duck Shuffle," licensed through Creative Commons, and thanks for listening to episode 308 of the Community Broadband Bits podcast.

Link: Tags: transcript

Postmortem in Wyoming: Cheyenne Mayor on Interrupted Legislation - Community Broadband Bits Podcast 308

May 29, 2018
Community Broadband Bits Episode 308 - Mayor Marian Orr from Cheyenne, Wyoming

Local communities considering investment to improve connectivity for businesses and residents have many factors to consider, including state laws. The best laid plans for broadband can be torpedoed if state legislators are influenced enough by incumbent lobbyists to pass laws that complicate local authority or funding. This week, we hear about Wyoming from Cheyenne Mayor Marian Orr.

Mayor Orr describes how incumbents in her community claim that access to broadband is plentiful, but business leaders and residents describe a different reality. In order to seek out possible solutions, the city has now created a broadband task force to analyze the problem.

Earlier this year, Mayor Orr expressed excitement about SF 100, a state bill that was written to provide funding for local communities interested in exploring better solutions for local connectivity. While the bill was in committee, however, lobbyists from incumbents CenturyLink and Spectrum found a way to derail the parts of the bill that would help places like Cheyenne make their own decisions. Now, the bill requires that funding be used only for public-private partnerships and focus only on the areas with the worst connectivity.

I shouldn’t have been surprised to learn industry completely re-wrote proposed broadband legislation to their favor as a “substitute bill” in legislative cmt today. CenturyLink and Spectrum are bullies. It’s wrong and they are hurting WY communities. @ENDOWyo @WYLegislature

— Mayor Marian Orr (@gofishwyo) February 19, 2018

This show is 16 minutes long and can be played on this page or via iTunes or the tool of your choice using this feed.

Read the transcript for this show here.

You can download this mp3 file directly from here. Listen to other episodes here or view all episodes in our index.

Thanks to Arne Huseby for the music. The song is Warm Duck Shuffle and is licensed under a Creative Commons Attribution (3.0) license. 

Tags: wyomingcheyenne wylegislationstate lawsincumbentaudiopodcastbroadband bits

Cleveland Heights Wants Broadband Options; City Council Talks Muni

May 29, 2018

Like other local communities around the country, Cleveland Heights in Ohio is beginning a conversation about the possibility of publicly owned Internet infrastructure. The impending loss of federal network neutrality protections, the desire to compete with other communities, and ensuring digital equality, are several issues local leaders consider most important.

Citizens Leading the Way

Councilman Mike Ungar is one of the members of the City Council that have expressed interest in learning more about the possibility of a muni. He reported at a recent meeting that he's been in contact with a group of citizens who have been researching publicly owned networks. They hope to convince the city to commission a feasibility study to be completed by mid-2019.

In addition to providing better economic development opportunities by improving local connectivity, the group feels that a municipal network would better address the city’s digital divide. They’re also concerned about data privacy and how the lack of network neutrality protections will affect businesses and residents in the community that is served by incumbents Spectrum and AT&T. Having been caught digital redlining in nearby Cleveland, locals have reason to refuse to trust AT&T.

Draft Legislation

The grassroots group interested in exploring a municipal broadband network for the city has prepared draft legislation they hope city leaders will consider adopting to put the issue on the November 2019 ballot; the measure would ask voters to approve a municipal broadband utility. The city does not operate an electric utility and Cleveland Heights residents obtain water service from Cleveland Water, which is operated by the City of Cleveland.

Cleveland Heights, located about 10 miles due west of downtown Cleveland, has about 20,000 households with a population of approximately 46,000 people. They describe themselves as diverse, progressive, and note that many artists and patrons of the arts choose the town as their home.

According to Cleveland.com, the citizens group has drafted legislation that they’d like to see used to get the issue on the ballot. The proposal calls for every premise to be connected to publicly owned fiber that offers gigabit connectivity and that the city’s utility respect network neutrality principles. The measure would also spell out the requirement that the venture is not in the business of turning a profit, but in providing a service. 

"Funds should be used to maintain the infrastructure and to pay the salaries of those who service and support the operations of the utility," the draft legislation states. "If there remains an excess of operating funds, then the ISP will reduce subscription costs."

The grassroots group is reaching out to other Council Members, asking them to attend their meetings to learn more.

Other Ohio Networks Inspire

Places such as Hudson and Fairlawn have sparked interest in nearby Ohio communities. In both places, local leaders recognize that providing fast, affordable, reliable connectivity is necessary to remain competitive. In addition to attracting and retaining employers, families now make access to broadband a priority for their homes and for the schools their children will attend. Hudson is currently considering whether or not to expand its fiber network beyond commercial service to all premises, including residences.

Listen to our podcast interviews with Ohio communities, including Jane Howington from Hudson and Ernie Staten from Fairlawn.

Tags: cleveland heights ohohioconsiderationgrassroots

Community Broadband Media Roundup - May 28

May 28, 2018

Colorado

Greeley City Council talks broadband in work session by Sara Knuth, Greeley Tribune

Consumer satisfaction with cable, Internet Service Providers drops again by David B. Cline, The Coloradoan

Cortez reveals results of fiber project feasibility study by Stephanie Alderton, The Cortez Journal

 

Connecticut

Telecom industry books major win in municipal-broadband fight by Matt Pilon, Hartford Business

PURA's decision limits communities' use of pole space to local governmental activities like building networks for schools and other public buildings.

The ruling takes away what was once seen as the most economical and realistic avenue to forming municipal broadband networks in Connecticut, imperiling the hopes of communities desiring more affordable, gigabit-speed internet to spur economic growth, attract younger workers and close the "digital divide" for lower-income residents.

 

Minnesota

The speed of your internet service is -- cringe -- up to Congress by Hannah Jones, Minneapolis City Pages

A chance to succeed by Laurel Beager, International Falls Journal

Kudos to members of Koochiching Technology Initiative, or KTI, a local group seeking letters of support from businesses and individuals explaining how internet, or an improved internet, has a made a difference or could make a difference in their lives and their businesses.

The letters will used to apply to the Blandin Foundation to become one of four Blandin Broadband Communities, or BBC.

The two-year program assists selected communities in using a tried and true process to define their technology goals, measure current levels of broadband access and use, and seek technical assistance and resources to meet their goals, which includes use of the internet beyond simple access.

 

Missouri

Survey becomes rural Missouri's plea for help by Ray Scherer, News Press Now

Lawmakers create grant program to spread broadband in Missouri by Annika Merrilees, Columbia Missourian

 

Nebraska

Lincoln Steps Into the Future by Masha Zagar, Broadband Communities Magazine

The broadband project in Lincoln, Nebraska, started the way so many broadband projects start: with complaints by the business community. Companies were leaving the city or declining to move there, citing a lack of broadband choices. The local chamber of commerce, responding to the alarms its members raised, implored the mayor, Chris Beutler, to take action.

A Nebraska statute prevented the city of Lincoln from building and operating its own network, so the mayor’s options were limited. (Though the prohibition isn’t absolute for all Nebraska cities, there are no municipal networks anywhere in Nebraska.) However, he continued to meet with the chamber of commerce and brainstorm about possible solutions.

 

North Carolina

The feds scrapped their rules for an open internet. Now the fight moves to the state level. by Lynn Bonner, Charlotte News & Observer

The state should make sure that broadband internet companies don't interfere with residents' access to websites, a North Carolina state senator said Monday.

Sen. Jay Chaudhuri, a Wake County Democrat, said he will file a bill to prohibit broadband internet service providers from inhibiting open access by blocking some sites, charging extra for 'fast lanes', or intentionally slowing or speeding service.

Open access to the internet is especially important in rural areas, he said, where 88 percent of residents do not have a choice of internet service providers.

Editorial: Widespread broadband access needs to be more than campaign photo-op by Capitol Broadcast Company, WRAL

Key topics include health, broadband, small business in rural NC by Carolina Public Press

  

Oregon

Broadband in Eugene, Oregon by POTs and PANs Blog, CCG Consulting

Cuts threaten subsidies for rural health broadband by Markian Hawryluk, Bend Bulletin

 

Tennessee

EPB expects to top 100,000 telecom customers this fall by Dave Flessner, Chattanooga Times Free Press

Less than a decade after launching its telecommunications business, EPB expects to reach 100,000 customers of its fiber optic services by this fall — nearly triple what EPB initially forecast for the service when it was launched in 2009.

The city-owned electric utility, which added telephone, internet and video services using the same fiber optic network needed for its smart electric grid, has now captured nearly two-thirds of all of its customers with at least one of its telecommunications services. EPB Fiber Optics has signed up more than than 97,500 customers with its ultra-fast fiber optic telecom service in what it proclaims as "Gig City."

 

Virginia

Verizon Flirts With DSL Usage Caps in Virginia by Karl Bode, DSL Reports

Loudoun County Survey Seeks Feedback on Broadband Service by Loudon Now

 

Washington

Firm that sparked outcry in 2015 when it tried to lease Tacoma's Click network is trying again by Candice Ruud, Takoma News Tribune

Town, county express broadband interest by Rick Nelson, The Wahkiakum Eagle

Local officials are coming together to study the feasibility of offering high speed, broadband internet service in Wahkiakum County.

Gene Healy, a member of the board of commissioners of Wahkiakum PUD, presented the issue to his fellow commissioners at their meeting last week, asking, "Do we need a broadband action team?"

This week, he raised the topic at meetings of the Cathlamet Town Council and Wahkiakum County board of commissioners, and members of both boards said they would join the team.

 

West Virginia

Bringing attention to W.Va.'s rural Broadband problem by Jake Jarvis, West Virginia News

 

General

Special Coverage Series: Smart City Solutions by Efficient Gov News Staff

The Case for Fearing the AT&T–Time Warner Merger by April Glaser & Will Oremus, Slate

A former DOJ antitrust lawyer explains how a union between a telecommunications giant and a media giant could harm consumers.

Closing the ‘Digital Divide’ Means Sizing It up First by Dave Nyczepir, Route Fifty

Next Century Cities, a network committed to closing the digital divide, applauded the bill’s effort to ensure comparable broadband access nationally but took issue with its definition of “underserved” rural areas as those where average speed and signal strength lags behind that of the 20 biggest metros.

The FCC’s minimum broadband standards are 25 Megabits per second for download speeds and 3 Mbps for upload speeds.

“When it comes to minimum speed definitions for broadband, we believe that should be uniform across rural and urban areas,” Christopher Mitchell, NCC policy director, told Route Fifty. “We oppose any effort to water down the 25-3 standard.”

The Pros of Public Internet Networks (and Lessons Learned) by MuniNetworks.org, EfficientGov Blog

People don't care about "Net Neutrality": they care about "internet freedom" which is the same as "freedom" by Cory Doctorow, Boing Boing

Tags: media roundup

Penobscot, Maine, RFI Awaits Responses; Deadline July 11

May 25, 2018

Over the past year, towns in rural areas of Maine have mobilized and are taking steps to improve local connectivity. The latest is the community of Penobscot, where the local Broadband Committee recently released a Request for Information (RFI) to seek out firms interested in helping them bring broadband to the coastal community. Responses are due by July 11, 2018.

Read the RFI.

Design and (Perhaps) Implementation

Primarily, the Committee seeks to find a firm interested in providing engineering design. Penobscot clearly states that their goal is to bring symmetrical service to every premise, that speeds are consistent and reliable, and that they expect to see proposals suggesting speeds higher than the FCC’s 25/3 broadband standard.

Like many of the smaller towns in rural Maine and elsewhere, Penobscot isn’t jumping at the chance to operate their own fiber optic network. They're hoping that respondents will be ISPs interested in also operating the network and offering services via the infrastructure.

Goals for Penobscot

According to the RFI, many of the 1,200 year-round residents support themselves with home-based businesses, one of the many sectors that require faster upload speeds for day-to-day operations. In addition to craft and artisans, seasonal businesses cater to tourists that visit each year. People in Penobscot feel that it’s time to take steps to attract younger families to keep the community alive and thriving and Penobscot understands that broadband is a priority for their target demographic. They also want to convince seasonal visitors to stay longer or relocate and free public Wi-Fi is a priority.

Other Maine towns, such as Rockport and Sandford, are investing in broadband; communities that continue to rely on slow DSL and cable networks will have a harder time competing for residents and businesses.

With Fairpoint and Charter offering DSL, it isn’t surprising that most of the community can only obtain speeds of around 5/.05 Mbps. Cable Internet access company Premium Choice also offers service in part of the community, which allows “some residents” the ability to obtain speeds of 25/2 Mbps and 15/1 Mbps. The Maine School and Library Network (MSLN) serves anchor institutions in Penobscot.

Dollars for Design

At April’s Town Meeting, voters decided to allocate up to $10,000 to the cost of designing the network. The community has already received funding for this first phase from the Island Institute in Rockland. The Institute provides assistance for economic development initiatives in the region's coastal communities. Broadband Committee member Joel Katz has calculated a rough estimate of about $1.5 million to connect every premise along the town’s 25 miles of roads. As they progress, the Committee will pursue state and federal grants.

Let’s Get Together

According to Katz, Penobscot is keeping open the possibility of working with neighbors on a regional project:

“…[W]e are talking with all the other towns on the peninsula about broadband because we all have the same problems…We are sharing frustrations and trying to pull things together as a region. That’s a tough one.”

Small communities may find that banding together to share resources can maximize their chances of success for Internet infrastructure projects. We recently shared the story of Baileyville and Calais, two communities that have started the Downeast Broadband Cooperative. Since beginning the project, they’ve attracted interest from other local communities that want broadband but may not have the resources to launch their own municipal projects.

Important Dates:

Questions from potential respondents about the RFI need to be received no later than June 30, 2018.

Responses are due July 11th, 2018.

The town hopes to make a decision by mid-August and wants a complete design by the end of the year.

Read the RFI here.

Image credit of Penobscot downtown by Royalbroil [CC BY-SA 4.0], from Wikimedia Commons.

Town of Penobscot, Maine, Broadband Committee Request for InformationTags: penobscot memainerfiruralnew england

Make Connections at Next Century Cities' Pittsburgh Broadband Summit July 23 - 24

May 24, 2018

Is it summer already? If you aren’t already booked for July, Pittsburgh awaits. Next Century Cities is hosting Making Connections: A Regional Broadband Summit that will bring together experts, leaders, and champions from federal, state, and local government. Register here to sign up for the two-day event.

All-Star Lineup

In addition to our Christopher Mitchell, you will hear speakers such as:

Blair Levin, Senior Fellow from the Brookings Institution and one of people who have helped establish a vision for universal broadband in the U.S., will deliver the Keynote Address.

On July 23rd, listen to several panel presentations on successful models for deployment, digital equity, and financing. You’ll also have the chance to network with colleagues and participate in breakout sessions. There will be a Welcome Reception that evening at City Hall.

Tuesday, July 24th, will be dedicated to networking to bring communities and vendors together:

City-Vendor Connect will be set up in a “speed networking” format, to provide cities and vendors the opportunity to speak one-on-one to build relationships, discuss assets and needs, and create potential partnerships. The pairings of cities and vendors will be curated based on mutual interest, needs, and priorities between cities and vendors. Possible discussion topics range from fiber builds to 5G deployments to smart city analytics platforms. Cities and vendors will have the option during registration to opt in or out of City-Vendor Connect.

The event is free for municipal registrants, nonprofits or academics, and the press. Next Century Cities will hold the event at the Marriott Pittsburgh City Center, where attendees can also book a room.

Check out the agenda and register online for the event. 

Tags: eventnext century citiesconferencepittsburghpennsylvaniachristopher mitchelljoanne hovisblair levin

Transcript: Community Broadband Bits Episode 307

May 23, 2018

This is the transcript for episode 307 of the Community Broadband Bits podcast. Financing a municipal network project doesn't have to be a challenge. Tom Coverick of KeyBanc Capital Markets explains what Brigham City, Utah, did to expand the Utopia open access network. Listen to this episode here.

 

Tom Coverick: Just as quickly as you're putting your team together to plan your network and to engineer that network, you need to be having all of the parties involved in all of the sign off involving the financial structure, at least on a parallel path with your network plan.

Lisa Gonzalez: This is episode 307 of the Community Broadband Bits podcast from the institute for Local Self Reliance. I'm Lisa Gonzalez. When a community decides that it needs to invest in broadband infrastructure, they need to consider matters such as design, business model, and management. A critical piece of bringing the vision to reality is how to finance the project. In this interview, Christopher speaks with Tom Coverick from KeyBanc Capital Markets. The two caught up at the Austin, Texas, Broadband Communities Summit in May. Who better to get candid advice, lessons learned, and special insights into what goes on into financing community broadband network projects than someone like Tom. He works with communities looking to improve local connectivity by investing in these types of projects. In addition to the role of politics, risk, and bonding, Tom and Chris talk about a few different municipalities and their chosen paths. Now, here's Christopher with Tom Coverick from KeyBanc Capital Markets.

Christopher Mitchell: Welcome to another edition of the Community Broadband Bits podcast. I'm Chris Mitchell with the Institute for Local Self-Reliance down for one final interview from the Broadband Communities Summit in Austin, Texas. Welcome to the show, Tom Coverick.

Tom Coverick: Thank you. Glad to be here.

Christopher Mitchell: You're the managing director for KeyBanc Capital Markets and how-- you've been a frequent sponsor of Next Century Cities' events and a player in a lot of municipal, and lots of other kinds of broadband, investments.

Tom Coverick: That's fair to say. Yes, we have been. We're proud sponsor. We believe in the effort.

Christopher Mitchell: You arranged for one of the first special assessment districts which we'll be getting to for, for broadband in Brigham City. So I just learned that. I'm really excited to talk a little bit about those experiences.

Tom Coverick: Great.

Christopher Mitchell: Um, so, a good start: What is -- what is KeyBanc? And in particular the Capital Markets part of KeyBanc?

Tom Coverick: So KeyBanc Capital Markets is a wholly owned subsidiary of Key Corp. Key Corp has one of the largest banking presences in the Pacific Northwest as well as in the northeast. We're headquartered in Cleveland, Ohio. We have over 18,000 employees and KeyBanc Capital Markets, which is the corporate part of the corporate bank, uh, also domiciles our investment banking in public finance practices and that's where I am headquartered in Chicago.

Christopher Mitchell: And for the purposes of this interview, you understand municipal finance?

Tom Coverick: Yes, I do. I've been a public finance banker my entire career. So my experiences range from working with large issuers, issuing several hundred million dollar deals to smaller transactions like Brigham City, like we'll talk about in a few minutes, which was just about $3.6 million.

Christopher Mitchell: I went through grad school focused on science and technology policy for a public policy degree. And in that time I had an opportunity to take simple course on public finance, and I thought, "Boring, I'm never going to use this." And then I spent three years teaching myself stuff I could've learned in a few hours from someone who is qualified to teach it to me. So, um, I think this stuff -- just a shout out for other people, advice I give to all grad students that are going to work in public policy -- learn how finance works. It's essential

Tom Coverick: And learn how politics plays a vital role in shaping financial decisions in municipal government because it is -- sometimes that is a wild card.

Christopher Mitchell: Right. So if, if I'm a city and I'm thinking about building a network, what role does KeyBanc play in that?

Tom Coverick: KeyBanc can play several roles. The role that I would play as a professional would be to work to bring a bond issue through the capital markets and distribute bonds to investors, public investors. But one of the key elements of our firm is that we can have several touch points, whether it's direct lending or whether it's a private placements with some more difficult credits or perhaps even CRA credits and things of that nature. So one stop shopping.

Christopher Mitchell: CRA is the Community Revitalization Act.

Tom Coverick: Yes,

Christopher Mitchell: It's important for communities in overcoming past lacks of -- lack of investment.

Tom Coverick: Right? And it really does -- does have the initiative or the opportunity to eliminate or reduce the digital divide. And that's part of the corporate responsibility that banks like KeyBanc have in the communities where we do business.

Christopher Mitchell: And I think it's worth noting that this is the kind of conversation that I think will be useful for a number of folks to get a better appreciation of how banking works in in relation to this. But Jordana Barton with the Dallas Federal Reserve Bank has done a wonderful paper on broadband, the digital divide, banks and the CRA. Tim Herwig, who's with the Office of the Comptroller of the Currency, is-- has done incredible work to try and make it clear that banks can invest in these sorts of projects. So there are resources out there where if you think you have a bank locally, you know, or if you want to find a way of taking care of this sort of thing in your communities, those are the kinds of things to be looking at. I think you have more options now because of their work.

Tom Coverick: Right. It's absolutely right.

Christopher Mitchell: So that's exciting. Um, well, so I wanted to get into a little bit about what cities are looking at when you're thinking about having to borrow millions of dollars or for larger cities, tens or hundreds of millions of dollars. What options are there for cities?

Tom Coverick: So cities are presently challenged, as we all know, with aging infrastructure. So deploying new infrastructure is not necessarily the highest thing on their priority list. Oftentimes as we've discussed individually, Chris, those new initiatives such as municipal broadband and fiber deployment simply fall to the bottom because of aging infrastructure, whether it's water and sewer lines or roads or other types of infrastructure. And so when cities are looking at their priorities, they pay for those things that need to get down to first done. And unfortunately most of the time, broadband isn't something that is understood by a large number of municipal officials. They hear from their constituents, from their economic development folks and from all types of other members and stakeholders in their community, even some of their own politicians, that this is something that's desperately needed to grow and to make sure that the city remained competitive going forward.

Christopher Mitchell: And priorities are important because cities have limitations in how they can fund these sorts of things, right?

Tom Coverick: Right. And so, you know, when you look at what's available to pay for this. Um, it's -- it is still considered from many perspectives an infancy type of credit. When you look at credit markets, a water and sewer credit has been around for 100 to 125 years. So those types of credits are deemed an essential service. Simply put, people need water. People need sewer. And so those essential services are typically very strong credits. Uh, and so when you start to look at, you know, introducing a new utility, many of the investors and creditors, including banks, are very squeamish about the future, given the competition that municipalities face.

Christopher Mitchell: And I would add onto one thing, agreeing entirely with what you said, is that a water is typically, not universally, but typically a monopoly product. So as an investor, you know that, um, you're going to have customers. Whereas with a broadband network, you have to trust the competence of the network to get enough customers to pay back the debt.

Tom Coverick: That's exactly right. and so, um, when you have such a reliable revenue stream, like a water and sewer credit or even electric credit, those are utilities that have been proven over time and have strong ratings and strong essentiality in the community. And so those types of credits are extremely well received by investors. On the other side, something as new as broadband, even though it's been around for the last 15 years. It's a relative newcomer to the market place.

Christopher Mitchell: So we often hear the city is offering bonds. Um, what, what are different options? -- Bonds are kind of many different flavors and, and the options available with them. Can you walk us through the common ones?

Tom Coverick: The most simple type of bond is a general obligation bond. That bond is backed, secured by property taxes that are paid throughout the local jurisdiction, the issuing body, those tend to be very strong credits. Those credits tend to be the most well received, but there are other very strong credits that an issuer can rely on, a municipality can rely on, and those are things like motor fuel tax bonds or sales tax bonds or franchise fees bonds, those are bonds that are secured by energy taxes. So in the simplest form, uh, you have to really take a look at what's available to an issuer and what is the best credit and quite frankly, what the capacity is. Investors will ultimately look to see what the repayment cycle looks like and what the reliability of that revenue stream is going forward.

Christopher Mitchell: There's also tax increment finance bonds, which I think many of us view as a double edged sword for the challenges that presents to the rest of the tax base. Um, my impression is we're seeing more instruments available and that cities are using multiple instruments often to figure out how to finance a project.

Tom Coverick: You know, with the aging infrastructure and the demands that are being placed on municipalities for revitalizing those, there needs to be more creativity. There's only so many arrows in the quiver that municipalities have, so they have to be open to more and more types of structures quite frankly, and as those structures evolve, the market will continue. You know, the folks that we sell bonds to will continue to have a growing appetite for them. Albeit some of those opportunities are at a higher interest rate than something as reliable as a general obligation bond.

Christopher Mitchell: Right. And I wanna -- I wanna come back to that in a second, but the thing I just wanted to note was that cities do have a limit in how much they can bond for. That -- I'm sure there's complicated calculations to figure out how that works, but I think it strikes me that there's a couple of key things. One is there's a riskiness as a city engaged in riskier borrowing in the past or been less able to pay back its debt and then sort of size of the city amount of physical infrastructure and things. What are the sorts of things I'm missing that when into that calculation?

Tom Coverick: Well at the end of the day, what you have to consider is market access and market access is determined in large part by the municipality's ability to repay those bonds. The repayment of those bonds is stemmed from what is the tax base, what is the revenue source, how large is the city, to your point. And so as we look at those types of factors, we also have to remember that an issuer's rating is on the line as well. Access to the capital markets at efficient levels in preserving rating strength is very important to many, many political subdivisions. And for that reason, even though as a matter of practicality, they could certainly borrow a lot more. It may impact their rating. The more they borrow -- just like our own personal credit ratings. The more, the more everybody, you know, burdens themselves with debt -- the more stress there is on a credit rating. And so, you know, there's a lot of different reasons beyond just the ability to borrow. It has to do with many other optics, uh, in terms of preserving your rating. No politicians really want a downgrade on their ratings -- a ratings downgrade on their watch. And so that has another potential impact to it.

Christopher Mitchell: And, and cities don't want to go right up to that limit. They want to have some headroom in case something goes wrong. There's a natural disaster or something?

Tom Coverick: Correct? That's correct. That's a fair statement.

Christopher Mitchell: So with the -- and the interest rate, this is something that, again, in grad school I spent a lot of time in macroeconomics talking about different things and um, it seems to me it can be simplified that if you have a project that looks like it has greater risk, you will pay more to borrow. And um, that is an entirely reasonable supposition.

Tom Coverick: Yes, the more risky the -- it's like anything else in life -- the more risky, the more you pay.

Christopher Mitchell: And some cities have offered debt that was not backed by a general obligation. For instance, Monticello, Minnesota is known for having issued this kind of debt. They had a higher interest rate and they ultimately had to get their bond holders of significant haircut. In a market like this, as you noted, was newer, it kind of spooked investors and anyone else that wanted to use that found that the interest rate was unacceptably high at that point. That's a dynamic that I'm guessing you've seen in these markets regularly.

Tom Coverick: Yes, absolutely. Uh, if -- if, if an investor needs to be educated on a credit, the issuer will pay a premium typically.

Christopher Mitchell: To have a successful project, we're often telling folks need to get involved in engineering earlier than they might think. And one of the things that you and I have discussed, I've discussed with multiple people down here at Broadband CommunIties [Summit in Austin, Texas], is that financing remains a challenge. What do you want to be doing to make sure that, that you're going to achieve success with your project? Particularly from a financing point of view?

Tom Coverick: I think many of us have witnessed, uh, some really great plans by municipalities, uh, some great designs and some great engineering and some tremendous local support for the project. And then you get to a point where the question is, how are we gonna pay for this and that project suddenly goes dormant, uh, because there's really no financial plan in place. So I, I would argue and throw out for debate and I think I'm right, that just as quickly as you're putting your team together to plan your network and to engineer that network, you need to be having all of the parties involved and all of the sign off involving the financial structure at least on a parallel path with your network plan.

Christopher Mitchell: So you have experience with a special assessment areas, In some states they call it different things, local improvement districts or all kinds of different names, because states have to call things differently or else they wouldn't have an excuse to have a dividing line between them, I guess. Um, let's just talk a little bit about Brigham City and how that worked. Because I -- I -- When I learned about Brigham City in Utah, I thought it was a terrific idea. Brigham City is in the Utah Utopia footprint, the network that's a massive open access network connecting many different cities -- more than 10 cities. It has really struggled. They made some bad decisions and they really were the recipient of some malice from the incumbents. Not asking you to comment on any of that, but I just wanted to note, I just came from a panel with a person from Utopia who -- she was discussing how things have really turned around and they're really looking good. Um, they are the most well rated network in Utah. Like people love Utopia more than even Google Fiber. So as we're talking about Utopia is worth noting for people who are used to hearing it being discussed as a failure. It has done remarkably well in recent years. Part of that success is that Brigham City took it upon themselves to fund the infrastructure to finish the build out of Brigham City. And you can tell us how that happened.

Tom Coverick: So this goes back to 2009. So this is not necessarily a new concept. A Brigham City is a Utopia city that wanted to build the network faster than Utopia would be able to build it. And quite frankly, Utopia wasn't able to finance it at that point in time given its current structure. So what Brigham City did was establish a voluntary assessment district, which is -- allowed it under Utah state law. Uh, as you mentioned, jurisdictions dictate what issuers can do, what municipalities can do, in regard to these types of districts. But with regard to Brigham City, it was a voluntary, uh, district, uh, we bonded $3.6 million for those individuals and businesses that chose to have an assessment on their, I believe it was their water bill -- I'd have to look back it's been some time -- but they were assessed directly on, on one of their utility bills. And as a result of that, they make a monthly payment or a periodic payment. A portion of that payment goes directly towards paying this debt service. And so it was a unique way for them to, to do that. I will tell you that the smaller the district the more difficult, you know, we have as underwriters and, and folks that place these types of bonds to put them into the marketplace because the more finite the district, uh, the less there is for an investor to claw back on, in terms of if the district in fact failed, which is obviously not the case here. They paid on their bonds very, very well and effectively. That was one way that we access to the capital markets was, was achieved.

Christopher Mitchell: And so to, to spell it out, I like to try and repeat some of these things for people that may not be as familiar with it. Their people went door to door and they explained to people what it was and you borrowed an amount that was related to the number of people that opted in and in the event that there was a, a default or some kind of event, um, the value of the bonds was not backed by taxpayers, but by the value of the homes of the individual people that were involved.

Tom Coverick: That's a good point. In Utah, the statutes for borrowing with regard to special assessment districts are actually very generous and so there are several remedies an investor has in Utah that may not be available in other jurisdictions. In Utah, there would be a property tax -- a tax lien placed on the home by the municipality. If in fact that went unpaid for a period of time, there could be a foreclosure or quite frankly, the City of Brigham City would have the ability to pay for the debt portion of debt service from any legally available funds so it could even have paid for the debt from its general fund. The statutes there really strengthen and bolster that credit, but that's not available in every jurisdiction.

Christopher Mitchell: Sure. One of the things that I also heard was that, you know, I think cities are not likely to sort of ride in if you miss a payment and try to take your house from you. I think it's worth noting. Cities are often look for other remedies, try to work with you, and that sort of thing. In the event that there, there is something, it's always worth knowing what the law says and what the options are available, but I also don't want to scare people too much on this because I think it's an incredibly exciting option. It's being used in Idaho where they call it local improvement districts. It's being used in the state of Washington where they call it local utility districts. I believe the state of Colorado just allowed the creation of these kinds of districts so we may see that happening, uh, there as well. Um, I, I, you know, I'm, I'm very excited about it. One of the things that I was curious about is how that interfaces with other kinds of debt. So if Brigham City borrowed $3.6 million from these assessment areas, which again to state were voluntary, um, if they had just put out a GO [general obligation] bond for $3.6 million, would that have had the same impact on their, um, amount of borrowing? Or the way that, the way that investors view their indebtedness?

Tom Coverick: With regard to debt capacity, that's what we refer to that in the industry is: What is debt capacity. Debt capacity is defined in different places, um, by dIfferent ways and it looks at overlapping debt, the debt of school districts, park districts, library districts, what have you along with the issuer itself.

Christopher Mitchell: Let me just reinforce that because it's worth noting a city might be very well run, but if you're in a county that's really struggling, you have to take that into account.

Tom Coverick: Yes, you have to hit to con -- that is one of the factors you have to consider because at the end of the day, the rating agencies, when they look at how to rate these individual and respective credits, are going to consider the debt burden, the overall debt burden on, on a certain area and not just the particular issuer. And so, you know, what the industry has done is when we look at how these credits are structured, we try to get them as strong as we can, given the guidelines that we have from cities. And those guidelines vary tremendously, based on political wherewithal and based on the individual stressors or strengths of a community. There could be a community that has a AAA rating and they will just be so debt averse even though they have the capacity because they never want to ding their AAA rating and so even though the capacity is there, the unwillingness to use it may override any decision that's made. But to answer your question, typically special assessment districts are limited in nature, and so they don't have an overwhelming effect on the overall borrowing capacity or the rating for an individual jurisdiction.

Christopher Mitchell: As we wrap this up, I'm curious if you have any advice for cities that are trying to figure this stuff out and and how to think about it when they're approaching a financial institution such as yourself. What should they know when they're trying to figure out who to work with?

Tom Coverick: To answer that question effectively, Chris, I think I go back to what we talked about a few minutes ago and that is the plan of finance should be running parallel to the network plan. That's the first thing. Get your finance team together early, talk about what your options are, talk to your attorneys, talk to your bond counsel, your local bond counsel, those firms that provide the tax opinions because obviously we want to access the capital markets as effectively as you can and find out all of the different options that are available to pay for, for the network. Because there are many out there and it may not be financed solely by a bond issue. It may be financed by a few, a few different pieces. Um, the second piece of advice I think I would provide is to understand that accessing debt financing in any form will require that a political subdivision, whether it's a municipality, that's a city or a county or a town or what have you, will require to have some type of security other than just the system revenues. As we all know, these are expensive projects. The first few years of the project, they don't cash flow that well because there's such a huge capital outlay in those years. And so from our perspective, we, we, we would strongly advise that cities really look for ways to bolster their credit because they will have limited market access and limited access to capital financing without having some, what I refer to as skin in the game. And that's very difficult for many municipal jurisdictions to get their hands around is they either they don't want to do that or they're just limited.

Christopher Mitchell: And I, I think skin in the game is a, is a great phrase because, uh, I would support that just from an incentive point of view to make sure that they are doing everything that is possible to make sure that the network is a success. If risk is apportioned in the wrong way, um, we could see more projects that are not as successful. So I, uh, I think skin in the game is a very smart thing to be thinking about.

Tom Coverick: Right. And I think if you look at it from a potential creditors perspective, whether their creditor's an investor or a large financial institution or a venture capital type of investor, it's great that everybody has buy-in on the project. It's great that you know it's going to be transformational for community, but unless the community is willing to assume some risk itself, you shouldn't be expecting anyone else to assume risk in your project with you.

Christopher Mitchell: Thank you so much, Tom Coverick.

Tom Coverick: Thank you.

Lisa Gonzalez: That was Christopher with Tom Coverick from KeyBanc Capital Markets. We have transcripts for this and other podcasts available at Muninetworks.org/BroadbandBits. Email us at podcast@MuniNetworks.org with your ideas for the show, you can follow Chris on Twitter. His handle is @CommunityNets. You can also follow MuniNetworks.org stories on Twitter. The handle is @MuniNetworks. Subscribe to this podcast and the other ILSR podcasts, Building Local Power and the Local Energy Rules Podcast. Access them on Apple Podcast, Stitcher, or wherever else you get your podcasts. Never miss out on our original research, subscribe to our monthly newsletter at ILSR.org. Thanks to Arnie Huseby for the song "Warm Duck Shuffle" licensed through Creative Commons, and thanks for listening to episode 307 of the Community Broadband Bits podcast.

Tags: transcript

Another Rural Co-op, Another Broadband Project

May 23, 2018

Holston Electric Cooperative (HEC) in Hamblen and Hawkins County, Tennessee, is about to begin Phase I of its plan to deploy fiber optic connectivity to more than 30,000 members. The multi-year project will bring broadband to the rural area and create smart grid efficiencies for the electric system.

Wide Support for HolstonConnect

There’s been so much interest and so many inquiries about when members can sign-up, General Manager Jimmy Sandlin feels it’s important to ask folks in the service area to be patient and to understand that the build will be a long process. Construction will begin in Rogersville and will extend to South Surgoinsville.

“As HolstonConnect’s services will have less delay times than other products available in your market, the competition may encourage our members to lock themselves into new contracts. Be aware of this tactic, as this is your opportunity to help improve your neighborhood. Owned by the people served, HolstonConnect will connect our community to a great future, just like Holston Electric Cooperative brought rural residents into the future with electricity.”

Prices and a complete list of services have not been posted yet, but the cooperative plans to offer symmetrical gigabit service, voice, and video. In keeping with similar policies from other publicly owned networks, HEC has said there will be no throttling or data caps. 

HEC has had plans in place for a while to deploy a smart grid to improve electric systems. As is the case with many other electric cooperatives, HEC decided to consider taking advantage of the infrastructure’s excess capacity as a foundation for fiber optic connectivity for local residents and businesses. In order to make the venture successful, however, they knew that they would need take rates of around 80 percent from members to make the project viable. The cooperative still needs to determine final estimates, but the initial figure for the entire project comes in at around $120 million.

In early 2017, HEC reached out to members, holding several meetings to gauge interest. Local residents packed the events and the average of pledges to sign up for service averaged around 90 percent of attendees. A survey indicated that 60 percent of those asked would pay up to $75 per month for the service. An estimated 40 percent of HEC members do not have access to broadband in the rural service area.

The demand for the option is high in part because a large swath of people in the region don’t have access to any type of Internet service. In Surgoinsville, the sole landline ISP lost service over Labor Day in 2016 and never repaired the system. There are areas where satellite is not offered and families are seeking connectivity wherever they can find it.  

At one of the 2017 meetings, a Surgoinsville attendee told the Rogersville Review that each night she drives her children to Rogersville where the family sits in fast food restaurants in order to use the Wi-Fi:

“We spent three hours there last evening, just sitting in the parking lot, because that’s the only way my children can get internet to do research for their homework,” she said. “In this day and time, it is ridiculous for anyone to have to do this. It is costly and it is inconvenient. There’s no reason some of these internet companies can’t provide us with better service. That’s why I am here, to show support for Holston Electric. If their service costs $100 or more, I would gladly pay it because I’m probably spending that much or more on gas every month hauling my children all over creation trying to find Wi-Fi!”

Subsidiary to Serve

The co-op Board took locals’ comments to heart and in February announced that they were establishing HolstonConnect, a subsidiary of the cooperative, to offer high-quality Internet access. They aim to offer gigabit connectivity to all members within the co-op service area within three to five years. By taking a steady but slower approach, HEC hopes to take advantage of grants becoming available from federal, state, and regional sources. The HEC service area covers approximately 525 square miles at approximately 11 premises per mile of line. 

HEC serves a large rural area between Kingsport and Morristown in eastern Tennessee. We’ve covered many of the innovations and successes from Morristown's FiberNet, including their partnership with nearby Newport Utilities to help Newport establish a municipal network. In Tennessee, state law prohibits cities and towns from offering retail services beyond their electric service area, which leaves many rural towns, businesses, and residents without access to anything other than satellite Internet access, DSL, or even antiquated dial-up Interrnet service. Cooperatives that provide electricity in these areas are increasingly making investments to serve members with fiber optic connectivity. Learn more about the role of cooperatives in bringing broadband to rural America on our Rural Cooperatives page.

As HEC begins work on the first phase of the project, contractors will be conducting field work that will permit detailed engineering and design for the network.

“One of the most important components of the cooperative principals is concern for the community, and these services will improve the quality of life for our membership,” stated General Manager Jimmy Sandlin.

Tags: holston electric cooperativetennesseerural electric coopcooperativesmart-grid

Don't Forget the Financing! - Community Broadband Bits Podcast 307

May 22, 2018
Community Broadband Bits Episode 307 - Tom Coverick, Managing Director at Keybanc Capital Markets

When municipalities and other local governments are planning for publicly owned Internet infrastructure, they must coordinate many moving pieces to get the project going and to keep it on a successful track. In this interview, Christopher and Tom Coverick, Managing Director at KeyBanc Capital Markets, discuss one of the most important components of community network planning: finance.

Christopher and Tom met up at the May 2018 Broadband Communities Summit in Austin, Texas.

In addition to some of the types of bonding and other mechanisms communities use to fund their projects, Christopher and Tom discuss the politics and ancillary issues that affect local leaders’ decisions to take the step to finance for a project. Risk is a consideration and it affects the cost of financing. Tom advocates that financing should be part of the equation early in the planning process and he explains why his experience has led him to this conclusion. Christopher and Tom also talk about some creative funding techniques that local communities have used to make borrowing more palatable and suitable for their unique situations.

This show is 25 minutes long and can be played on this page or via iTunes or the tool of your choice using this feed.

Read the transcript for this show here.

You can download this mp3 file directly from here. Listen to other episodes here or view all episodes in our index.

Thanks to Arne Huseby for the music. The song is Warm Duck Shuffle and is licensed under a Creative Commons Attribution (3.0) license. 

Tags: audiobroadband bitspodcastbondbond ratingfinancingtax increment financinguser financedlocal improvement districtlocal utility districtdistrict

Hillsboro, Oregon, Ready to Invest in Fiber for Residents, Businesses

May 22, 2018

Hillsboro, Oregon, has studied the possibility of investing in high-quality fiber connectivity for residents and businesses since 2014. After considering the pros and cons, this northwest city of 105,000 has decided to move ahead, with spring 2019 as a target launch date of its own Internet access service.

Communications Utility and Beyond

In January, the City Council approved establishing a communications utility, creating a communications fund, and taking the necessary steps to develop a dig once policy in the city’s code. Elected officials had not yet decided if the community would pursue a city-wide network, but wanted to create an environment that would offer future options and encourage private sector partners to invest in Hillsboro.

The city already owns fiber optic resources that it uses for municipal facilities, schools, traffic signals, and other purposes. They plan to use that network as a foundation to expand in order to bring better connectivity throughout the community. With a wider network, Hillsboro hopes to adopt public Wi-Fi, better public safety notifications, and applications for smart-meters for utility services as well as real-time parking and traffic updates.

Keeping it Affordable for All Segments

Hillsboro plans to offer gigabit connectivity at around $50 per month but hopes to provide the same symmetrical service to lower-income households at a lower rate. In addition to equitable access for all income levels in Hillsboro, the city wants to ensure that students have the ability to compete.

“For our students, for our businesses, and for our entire community, we are moving forward now to expand the City’s fiber network to include Internet service,” said Hillsboro Mayor Steve Callaway. “We want to ensure affordable, equitable high-speed access to keep Hillsboro competitive with cities around the world."

The city wants to ensure that network neutrality protections remain in effect in the community for individuals and businesses. Encouraging entrepreneurs and making high-quality access with good customer service affordable for all subscribers are more goals they intend to pursue.

Incremental

In order to connect homes and businesses, Hillsboro will start with two areas of the city for the first phase that they hope to complete in 2019. South Hillsboro is a new development of around 8,000 homes, which will allow conduit and fiber to be placed during initial construction of the neighborhood. Next, elected officials want to connect premises in the Southwest Hillsboro/Shute Park area, considered one of the areas of the community with the lowest income. City leaders see the need for affordable high-quality Internet access to improve opportunities in the neighborhood.

Hillsboro won’t rush to finish deployment across the city and are planning on allocating $4 million each year for the next six years toward the incremental build. For now, they’re expecting the entire project to take up to ten years to complete.

Past Advice

Those who’ve been following happenings in Hillsboro remember that in 2015 a consultant they hired recommend the city not pursue a community broadband network. At the time, they suggested that the expense was high — possibly as high as $66 million — and that the city might have to bond for the deployment twice. Uptown Services estimated a 28 percent take rate at that time, but the city now estimates a conservative take rate of about 36 percent and, with the new South Hillsboro development as part of the initial phase, a publicly owned network can start off firm in Hillsboro.

The matter inspired us to write about the role of consultants and what communities should be asking when they hire them for advice. For more on choosing consultants, listen to Christopher and Eric Lampland in episode 246 of the Community Broadband Bit podcast.

Changes Have Happened

The need for broadband access has increased since 2015 and city staff have been researching other communities’ approaches and feel that high-quality connectivity has become an essential service. In order to compete economically and to retain work force talent, city leaders recognize that they can’t sit idly by.

Hillsboro is the tallest tree in the Silicon Forest and the center of Oregon’s high-tech cluster. With an affordable high-speed network, Hillsboro’s homegrown talent — our students and entrepreneurs — will be better positioned to lead the world in innovating for the future. Hillsboro will continue to attract and retain talent and be a hub for innovation.

At the May 15th City Council Work Session, Councilor Anthony Martin also considered the role the city may play in better connectivity throughout the region:

“Being thoughtful and strategic is not only good governance, it’s the Hillsboro way. Our neighbors will look forward to the day when our community’s fiber network expands and the City can provide the exceptional customer service that Hillsboro residents expect.”

Image of Shute Park sculpture via Good Free Photos.

Tags: hillsborooregongigabitincrementalpublic v privatemunilow-incomeurban

Transcript: Community Broadband Bits Episode 306

May 21, 2018

This is the transcript for episode 306 of the Community Broadband Bits Podcast. Doug Dawson from CCG Consulting joins the show to discuss his work, 5G hype, and the Connect America Fund. Listen to this episode here.

Doug Dawson: What we find is fiber communities grow when other communities around them are shrinking.

Lisa Gonzalez: This is episode 306 of the Community Broadband Bits podcast from the Institute for Local Self-Reliance. I'm Lisa Gonzalez. While at the Broadband Communities Summit in Austin, Texas. Christopher spoke with community leaders, advocates for universal broadband, and consultants. In this episode of the podcast, he sits down with Doug Dawson from CCG Consulting, one of the guys who's been in the business for decades. Christopher and Doug touched on a lot of issues, including his work with municipalities and publicly owned Internet infrastructure. He talks about choosing a consultant, marketing and costs, as well as how to deal with misinformation. Doug and Christopher also spend time talking about the 5G hype, rollout and specs, and whether or not it really is the solution for rural America. They talk about the Connect America Fund, and Doug shares his thoughts and predictions about the repeal of federal network neutrality protections and what it means for municipal networks and small ISPs. Check out CCGcomm.com, for more about Doug's firm, and be sure to visit Pots And Pans by CCG.com. That's Doug's blog. Read some of his excellent articles on telecommunications and related policy. Now, here's Christopher with Doug Dawson of CCG Consulting.

Christopher Mitchell:: Welcome to another edition of the Community Broadband Bits podcast. I'm Christopher Mitchell:itchell with the Institute for Local Self-Reliance with another show coming out of Austin, Texas, at the Broadband Communities Summit here in lovely Austin, Texas, right at the edge of [Texas] Hill Country. I'm speaking today with Doug Dawson, the founder and president of CCG Consulting. Welcome to the show.

Doug Dawson: Oh, thank you, Chris.

Christopher Mitchell:: So Doug, you just mentioned that 20 year anniversary. You've been doing this for some time.

Doug Dawson: We have been doing this for some time, and that's, uh, my firm CCG consulting. I've been doing it for quite a bit longer than that. So first telecomm job in 1975.

Christopher Mitchell:: There's this demeaning saying that those who can't teach -- but you've run many of these companies.

Doug Dawson: Yes. The hands on experience in ISP, Telcos, cable companies, electric companies, all those things, you bet, so --

Christopher Mitchell:: Right. So you probably go way back to, um, you know, when people thought, "Hey, broadband over power lines is going to change everything, we're going to have real competition."

Doug Dawson: Yeah. It didn't quite go as they expected did it.

Christopher Mitchell:: No, no. We were just, uh, we did an interview recently with Michael Render who -- we were going back and talking about the old days when there was like 3000 passings of fiber networks. Um, and, you know, I'm just curious, when did you start offering advice and what was the background of that? People just-- were cities coming to you or how did you get into that market?

Doug Dawson: When I first started CCG Consulting. We started with the 1996 Telecom Act. And so there, our concept was "Let's help people become CLECs --at that time, competitive telephone companies. But even before that, I had been working with another consultant. And we launched -- I launched several dozen dial up companies, so we -- even back then, it's like, "How do you get into the business? How do you find your customers?" I mean just the same old, "How do you launch a successful broadband business?" [It's] hard to call dial-up broadband, but at the time it was revolutionary. So, um, and so I've been doing it ever since then. When I first founded CCG, my first clients were telcos -- because they wanted to start competitive ventures. Very soon thereafter, all these folks, who were not telcos, started coming to me. And over the years, uh, I'd say half of my new business now is municipalities. [We] still have a lot of telco work. Uh, but we almost entirely work in competitive markets. We don't really do much legacy work even for all those clients where we help them with their competitive arms.

Christopher Mitchell:: So you have a lot of clients, both public and private, but they're almost all competitive. Like they're the new entrance.

Doug Dawson: Yes, This is all people that are over building networks.

Christopher Mitchell:: Right.

Doug Dawson: So--

Christopher Mitchell:: So you also do the Pots And Pans blog. Um, I forget exactly what the url is.

Doug Dawson: Pots And Pans By CCG.

Christopher Mitchell:: It's a wonderful daily story. I've -- as someone who had long done daily stories -- now Lisa Gonzalez does all the writing for our daily stories. I know it's a grind. You seem to find interesting insights to get a story up every single day that I usually find quite compelling.

Doug Dawson: You know, this industry, it's not hard. In fact, I throw away three topics a week. It's like the topics just come to you because I talked to folks every day and they say, you know, what do you think about this? And boom, there's a blog.

Christopher Mitchell:: Right?

Doug Dawson: So it's, it's amazing what's going on. When I first started five years ago, it was a lot harder. I had to struggle like, what the heck am I going to write about tomorrow? And now it's just the opposite. It's like, what am I not going to write about?

Christopher Mitchell:: So let's, let's dig into one of the questions I wanted to ask you when, when I finally cornered you and got you into our studio here, um, was, was -- any lessons that you've drawn from all of the years of working with municipalities that might be relevant for someone who is in a community where they're going to be starting in network or there's a very good chance they're going to be starting in network.

Doug Dawson: There's a lot of lessons. One is, which people don't realize, it costs a lot more money to get started. Communities will put together a $50,000 to do a feasibility study and just not realize it's going to cost a whole lot more than that before you get into the business. And so, so you can't underestimate the cost of getting going. The cost of launching a new businesses is -- you know, there's a lot to get done. Um, we always do what we, you know, Gantt Charts, which are project plans for, for a new fiber network and literally they will have 3,000 tasks on them that have to be finished. Everything from marketing to the network construction items and so on. So it's a complex business. Um, and so the second piece of advice is go find the experts who can help you do it in and get folks who've done it before. There's a lot of consulting firms out there who are good at one piece of it, but you need to find somebody who does everything you're looking for because there's not very many of us.

Christopher Mitchell:: On that point, I think, would you agree that there's some consultants that uh -- I think if we wanted to we could talk about how we think that they are ones we wouldn't recommend cities come to -- but in general, I think every consultant has strong points and weak points, and it's not so much like we're going to find the best consultant. It's, we're going to find the consultant that matches our desires and needs and that sort of thing. Is that right?

Doug Dawson: That's exactly right. So, you know, there are one or two bad consultants, but hopefully people don't hire them, but most of the consultants are pretty good in this industry. And so, you know, the question is where do you want to take this thing? So if you, if you know you're going to build a wireless network, let's talk to someone who's done a lot of that. If you want to build fiber, make sure you get that. The number one issue nowadays that I give people advice on is, you know, the engineering parts, etc. There's dozen engineering firms in the country who can tell you how much the fiber networks going to cost. That -- once you have that number, you're sort of done [with] that, the hard part's raising the money. So, you know, if you don't already know how you're going to raise the money, then you better pick a consultant who can help you figure that out because that's -- that's 80 percent of the actual grind of getting one of these things done. It's money. And that's the one thing that stops projects from getting finished nowadays so that, you know, that's everything else is -- everything else is knowable. That one's just really hard. You know, but if you're in a city who just knows that you're going to pay with this by a bond, then you know, that's not such an issue there. But most people don't have that luxury nowadays. You have to get very creative. Uh, usually it's multiple sources of revenue to get these things done. So, you know, so -- so look forward, you know, what are you gonna do after you get the study. You know, you don't really want to change horses in the middle of the stream. So pick a consultant who, who's looking out at the end game and we each have a different view of how to get there and, you know, make sure when you interview us to ask those questions, I mean, you know, what do you, what do we do next and make sure that they know what they're, where you're going.

Christopher Mitchell:: I suspect that a lot of the cities, and probably the other private companies as well, that come to you, who are established, are coming to you and saying, hey, you know, we've hit this speed bump or we're concerned about this issue. Is that, is that something you're often dealing with? Like sort of troubleshooting and evaluating?

Doug Dawson: Yeah, I mean our company, actually our major practice is. We try to lau -- we'd launch these new markets, but we also help people take old markets and make them better. Now. If you built it 10 years ago, but you're still not making as much money as showed, why aren't you? And let's go in and fix those problems. Uh, and so, you know, we all -- [for] a new guy, we try to make sure that we've addressed all those up front because you know, there's 20 keys to success, you know, any one of those is not done right and you're not going to do as well as you ought to. The network has to be built right. You've got to have a solid marketing plan. You know, again, the money. You've got to have -- you've got to have the right people, not overstaffed, you can't have expenses too high. You know, nowadays lean and mean is the way to go. And so, you know, you have to have all of those pieces in place. And you know -- and sometimes that doesn't fit very nicely into a municipal structure. So that becomes a real issue of how do we get it in here? How do you govern it? You know, one of my best stories on things not to do is Bristol, Virginia. [It] was one of the first cities to build a broadband network. Six months after they built it, the city council came in and cut all the rates by 15 percent because there was an election year, and of course that all of a sudden took this company on a great trajectory to put them straight underwater because they didn't have that much profit. And so, you know, six months later they were raising them back up again when they saw the consequence of that. So you have to shield these businesses from politics, which is not an easy challenge. Also, you know, that's one of the other big lessons is, you know, do not let these become political issues because if you do, then they will absolutely always run into problems. The successful cities have somehow kept them apart and that's not easy to do, but --uh, but they've been able to do that. So --

Christopher Mitchell:: Right. I think it is worth noting some of the structures we've seen are where the city council's not the direct oversight board. There's a board that is a maybe appointed with staggered terms so that a single shift in public attitude can't result in a major change to a utility that has to have a longterm plans.

Speaker 3: Well and you want that. That's exactly the structure we recommend and that board has to be engaged people, who have a varied background. You want a banker on there, you want maybe local tech people on there, and you want some local businessmen on there who understand how to run a business. I mean that's -- you know, so you don't need fiber folks because you know your board doesn't have to know your business. They have to know how businesses work, and so what you don't want is a board also made up of other local politicians, and that's the only people to run it, because now you haven't shielded it from politics though.

Christopher Mitchell:: One of the things you mentioned is the thing that I -- I tend to think is possibly the single biggest problem cities have run into when they built these networks and that's marketing. I think you, you noted the overstaffing and that's a very serious concern, but the marketing seems to be something where cities that try to do it in-house, they don't bring enough a external like non-city fo--- people who have a different focus to it. Um, they seem to struggle.

Doug Dawson: There's probably been 10 fiber projects, who have struggled, a few even failed almost universally they were because of lack of sales. There's literally been city projects who launched open their doors, didn't even make any public announcements and assumed that people would just come and sign up. They don't. And so you get about 20 to 30 percent of the market of people who just hate the incumbent cable company or something. Then after that it's hard work. It's just like selling anything else. And so, you know, cities don't have that mindset, so you better bring somebody in who does. I mean, you don't, you don't want your general manager to be a guy with 30 years of city experience. You want them to be a guy who's been in a commercial company. So, uh, so that can be fixed. I mean, some of those ones who struggled, then we came along and said, here's how you fix this, and sure enough, they went out and did the sales. Uh, the probably the best example of that is MINET, a municipality in Oregon. They did exactly what I just said. They did no marketing. Three years later they looked up, I think they had a 35 percent market penetration. You know, they hired me. We came in and looked at it, figured out how to make it better. Today they are, they might be the highest one. They have -- it's now approaching 85 percent market penetration, which means they basically have every broadband customer that is in the market.

Christopher Mitchell:: You mentioned this morning on your panel that, that they're going around into nearby population centers to encourage more people to come in. And they've run -- they've run out of people to sell that--

Doug Dawson: So they're now -- they're now recruiting customers to come to town. That's their strategy to grow, is to actually bring in more people to homes there, and it's working. They have the, what we find is far fiber communities grow when other communities around them are shrinking. So there's new houses being built. So--

Christopher Mitchell:: So before we change to a different topic, I just want to throw something at you, and that's um, you know, Christopher Yoo has come out with a study that's being repeated from University of Pennsylvania. We've done rebuttals on our site. Um, you know, Steven Titch has probably taken aim at you many times over the years. There's many people who have been paid to say, "Municipalities just can't do this. They all fail. It's a disaster." How do -- how do you respond in a minute to that sort of thing?

Doug Dawson: First off, municipalities have a different way of measuring success. So success to them is a business that completely is cash self-supporting. So as long as you're generating enough cash to pay operating expenses, cover the debt, and pay for the capital you need every year to keep growing the business, then they think that that's a success.

Speaker 3: No city's upset if they make more than that. They like -- you know, there's nothing wrong with putting money back in the city coffers. But, you know, most of the fiber-- most of the projects have gotten to that point. Now, when you look at a business that's just breaking even with cash, which they are going check, we are completely successful. Accounting books -- it'll look terrible because fiber projects are capital intensive and they'll have a mountain of depreciation expense. You know, the city of Lafayette, Louisiana, has been fighting a public battle for the last five years because their book show a loss, yet they're generating very positive cash and they're growing, and they're now starting to build out of their money into the surrounding communities. They're completely successful. Uh, but, but uh -- folks point to them and go, "They're not successful." But just because they have an accounting number loss which is completely driven by depreciation, you know, they never intended to measure their company that way. They have no reason to do so. And there's plenty of commercial companies who have booked losses but are successful that, you know, that don't cover depreciation. That's not how -- that's not how you measure this kind of business. Infrastructure companies are not the same as retail companies or something like that. So, so the answer is there are some municipal failures, but most of the ones that, those guys point out in their articles are actually successful. I know that. I see their books. I'm in the books of 100 different companies. I know what they're really making. So when they tell the story that they're profitable, I know if it's true or not, and most of them are successful. So--

Christopher Mitchell:: Uh, I want to get to a different topic. You've covered this really in depth. In fact, I think you've had some of the clearest writing on this. 5G is going to make all of this pointless because we're all going to be connected in a utopia of incredibly high-capacity services that are magic. [Sarcasm]

Doug Dawson: I actually have a new thought on that, that I haven't made it to my blog yet. I'm-- I'm starting to wonder if there's actually any -- going to be any builders of 5G out there. All three of the major telcos have made it very clear in the last six months that they're backing out of the residential broadband business. Uh, the cable companies all have gigabit networks or will have gigabit networks, so they're not going to be spending money on 5G. And if the telcos don't do it, then who the heck is? Who are these companies who are going to step in and spend billions of dollars to do this? You know, Verizon still might, but I'm pretty sureAT&T is really not after this and CenturyLink -- the new management from Level 3 has made it clear. They are definitely not going to be doing this. So there may be nobody building those networks. But, but even if they do, if somebody does, those networks still need a lot of fiber. They're really capital intensive. They're large investments. They're still going to have to hit the infrastructure kind of returns. We're not even convinced that it's actually cheaper than building Fiber-to-the-Home. You know, you're replacing a fiber drop with electronics that may not be cheaper. Uh, you know, it could, but right now that stuff doesn't even exist. So we're -- we're talking about this fantasy future business that's gonna solve all the broadband problems in America, and there -- you can't even -- no one's making any equipment to do that. I've got a long history of watching wireless ventures fail because the technology never worked, right? So, you know, I don't trust anything till I see it working in the field and we're probably five years away from actually working equipment. So, uh, it has great promise. Quite honestly, if it works, the municipalities will be using 5G, why would you not? If that's a better alternative than Fiber-to-the-home. So you know, if that's a better technology than people will build it, but I don't see someone making these huge investments and definitely no one's going to make these investments in a rural community. It costs just as much to put the fiber in for 5Gs as it costs to put the fiber in for Fiber-to-the-Home. So if that's not feasible today in a rural community, that's not going to be feasible for 5G either. Rural communities are never going to see 5G then -- I go to places today who haven't seen 4G yet.

Christopher Mitchell:: One of the things that I like about your writing about 5G -- and people if they go to your blog, you have a tag 5G they could just focus on that if they want to -- but you talk about how things are likely to roll out, and it sounds like you're still working over how you think that. One of the things that I thought was particularly well done was discussing that the 5G standard, which is not yet completed, you're talking -- those 5G, that gear is not going to be out for many years. Um, but it is expecting -- we're expecting to see like a requirement of 20 gigabit to each wireless node, and you were pointing out that that's not really how a lot of these 5G companies are going to do it. And I know AT&T and Verizon a number of the times in which in five years I might have a phone and it might say 5G in the status bar. Um, I might be on a node that isn't doing that, that doesn't have that capacity, but they'll just still call it 5G and I'll have wireless backhaul and my experience won't be that different from 4G.

Speaker 3: But first off, let's talk about 5G cellular. You know, it took us 10 years, last year we actually saw the very first 4G actual phones. And so we think we're at the end of the 4G product. We actually just finally got to the 4G product. What we had was 3.1 , 3.2, 3.3, and now we finally made it to 4. It's going to be the same migration to get the 5. Verizon says they're going to roll out 5G next year. They're not, they're going to roll out 4.1G because there's 13 different aspects of 5G in the cellular world that you have to meet. And that's the sort of the standard. And so they will start picking away at little pieces of those new improvements. Uh, but even when they're all finished, 5G cellular, if you go right back to the specs, it says, deliver 100 megabit download, 20 megabit up. And that's what they're shooting for. They're not shooting for gigabit cellular. That's not part of the, of the specification they're shooting for. The main reason behind 5G cellular is to do Internet of things. A cell sites gonna be able to talk to 100,000 devices today. It's way smaller than that -- which is why when you're in a convention center like this, you can't get a cell phone connection. There's not enough connections on the south side, and their -- and their picture. Verizon and AT&T believe that they want to conquer the IOT world, but they're starting from a massive deficit because today every device is connected to Wi-Fi. You know, they may not ever get there. The, you know, I don't know why people would pay a subscription to use their IOT devices if their home Wi-Fi connection does it for free. So I think they have a very big uphill battle. The 5G that they're really talking about, and people conflate the two issues, is 5G point-to-point radios. Those can do gigabit speeds. That's the stuff though that you're gonna need a fiber right up to those things to work. If you do wireless backhaul and then we're gonna -- and we're going to end up with residential overbuild neighborhoods that have 100 meg service just like you already get today. Nothing wrong with that. And if you build that in a town that doesn't have broadband, that'll be awesome, but it's not automatically going to be gigabit not unless you put the fiber everywhere. and that means fiber to every one of those things. I know every third pole is gonna want fiber to it and that's pretty expensive.

Christopher Mitchell:: The other topic I really wanted to talk about, and this is something where again, I feel like you've covered extremely well, is the Connect America Fund. You outlined in a way that I hadn't seen anyone else do and frankly I still haven't seen in any mainstream, you know, telecomm, traditional press reporting how AT&T is spending -- It's like what? Two and a half billion dollars it's getting? And what people primarily in the south and in Appalachia are getting from AT&T's subsidies to expand rural broadband. So let's just, let's just start there. What is AT&T delivering with the two and a half billion dollars that we're giving it?

Doug Dawson: Let's go back to the beginning because what happened with, with the CAF II fund was up to the 11th hour that was going to be a reverse auction where everybody could come in and bid for that money and all of a sudden the order came out. And it floored all of us because they just gave all of the money to the big telcos and no one else got a penny of it.

Christopher Mitchell:: And this was under Obama's FCC.

Doug Dawson: Yes, this was. Yes it was. And so obviously the lobbyists, you know, from the big companies won their battle. So they just said, "Here is your billions of dollars. Go do what you need to do." And their goal was to do 10 Mbps / 1 Mbps speeds, which even then was already obsolete. I mean, you can't run a home on a 10 Mbps / 1 Mbps connection today. So it's, that's a ridiculous goal. The CAF II fund says make your best effort to go out and do that, and we know what's going to happen. They're going to run out and they're going to build homes and they're going to increase speeds and when they run out of money, they're going to stop. So even all the people who are covered by that footprint that they're supposed to cover will not be covered. So some folks will get no improvements. AT&T is using this as the way to tear down rural copper. So their solution is about 90 percent of the places is they're just going to start selling folks cellular connections, which they already can do today. So they are going to use this money to sort of beef up the transport to rural cellular towers.B ut cellular connections, anything wireless data wise has this curve where it says the further you are away from the tower, that speeds drop up really fast. And when you go to rural America it's not -- you know, this, these speeds that they're talking about delivering only work for our first mile or two. And it's not very hard to be three or four or five or six miles from the nearest cellular tower and they're not going to build thousands of new cellular towers. And so all these folks that are supposedly going to be getting these fast speeds will get three megabits and they'll get it. And they'll get on a very expensive $80 a month, cellular plan with a data cap on it. Uh, and just, you know, like they do today. It's not going to make their lives all that much better. Now, if you're really close to the cell tower and that technology might get 15 megabits, that's sort of the best speeds we can do today. That's not going to be very many people. And that's not broadband. Even by the FCC definition, it's not broadband, but in real life, it's not broadband. You can't, you know, I have a 60 megabit connection home with three people on it and we crowd each other out. It's pretty amazing how we have changed how much broadband we need. And the reason for that is we do simultaneous things today. It's not that we have applications that need broadband, it's we're trying to do six of them at the same time, and boy, they interfere with each other like crazy and it doesn't work so

Christopher Mitchell:: Well, the vision of the Connect America fund was something that I really supported. The idea being that, rather than envisioning an endless supply of yearly subsidies for operating expenses, the vision was that we would do one time larger capital expenditures. And we would not need to keep subsidizing them. But it looks to me like the way it's been implemented is actually just that now rather than doing yearly subsidies were going to do subsidies every decade because there no way. We're not going to give more money to upgrade those people that are getting three megabits. They're going to need something better.

Doug Dawson: Yeah, and what's going to happen is the phone companies have all made it clear when that money runs out, they're not doing anymore. They are not doing any more work on rural copper. We just gave billions of dollars to beef up rural copper, which was already old bad and not adequate. We've got to a point where people now in rural areas don't want better broadband, they're demanding better broadband, so the politicians and those areas will not be able to withstand that political pressure. So we're going to have to do it all over again. That money could have seeded gigantic fiber builds. If they would've just put it open to auction, all sorts of folks would have come in and built fiber instead of beefing up the copper. It would have not solved the whole footprint, but we have, might've served, solved 25 percent of it with fiber so that we -- So we ended up making no permanent solutions. Um, you know, I'm, you know -- I just said AT&T and he's going to use cellular. You know, Frontier and CenturyLink are just beefing up their DSL on, and on really old inadequate lines. That's even worse than what AT&T is doing. So --

Christopher Mitchell:: Do you have any, any quick takes on discussions about sort of CenturyLink, and Frontier, Windstream, not having a viable path forward and us having a sudden moment in the near future where they're just not serving where they just give up and walk away from rural areas.

Doug Dawson: Oh, I just actually wrote a blog. I don't remember when they're published exactly, but it says CenturyLink has basically announced they're backing out of the residential business. They are no longer going to support residential broadband, which means they're going to let rural copper go. Uh, they are going to probably not build any more fiber to the home because the company just got basically taken over by Level 3 management and they're going to enter, they're going to focus on enterprise. So that company is going to be out of the business, which means we're going to see the same thing we saw. You want a good example of that? Uh, Verizon tried to sell West Virginia property offer almost 15 years and during that whole time they made zero investment in the state because they were always this close to getting the buyer right. So that's 15 years where they completely neglected the copper. By the time frontier bought it, it was completely a power crap. You know, they're struggling to make it better, but you can't really fix something that's been neglected for that long without keeping it up. They're going to stop doing any repairs in rural areas. They're -- all these companies are going to cut back their employees. In your state, Cook County, one of the reasons they decided to build a fiber network is CenturyLink, had one technician for the entire county and entire county. So if you called with a phone problem or a data problem, it could be three weeks before he ever even got out to see you. And normally, and then he would go "Gee, there's really nothing I can do for you because that takes capital money and we don't have any money to do that." That's what we're going to see in rural areas is no response for problems. Uh, so yeah. So even if you get that nice 15 Mbps DSL today, the first time you have problem, you may be done forever and they may never fix it.

Christopher Mitchell:: So let's finish up with a discussion briefly about net neutrality. I'm curious how your different customers and clients responded. I know that there was a division among municipalities, none of whom, as far as I can tell, really have any intention of violating net neutrality. but there was a mixed response as to whether or not they supported the FCC taking action on it.

Doug Dawson: I don't have a client who violates net neutrality and little guys really can't. You don't have the market power. But you say that, but they could because what we've always seen -- so you know the way net neutrality is going to get violated is, you know, AT&T and the big guys are going to mine, data mine their customers and they're getting all the same stuff that everyone's freaking out about Facebook for. They're already doing it quietly behind the scenes. You know, AT&T has a way better look at what you do than, than Facebook does. AT&T sees all of your emails and they see all of your web searches. They know everything about you. Right? And so what I suspect is going to happen is there's going to be a group of marketing guys pop up who will pay these little guys x number dollars per customer for their data. And at that point some of them may decide to get into the business. They may say, well, heck, I would love to get $8 per customer per year. All I have to do is give them my, my url search data. I'm not so sure that some of these guys won't violate net neutrality. You know, money is a strong incentive. Right now none of them do because they don't have the market power to do it. They don't. And they don't have the technical know. They don't know how to do this stuff. And they can't mind their data's customer. They -- but, uh, but I'm not so sure that they won't in the long run. I think municipalities are the safest bet, you know, they will not violate their customers trust. But I think a lot of the commercial guys very well might. So I think it's worth noting for people that are very technical.

Christopher Mitchell:: Um, net neutrality is, is separate in some ways from the privacy issues, but in the way that it's worth talking about in the way that every American really thinks about it, they're all wrapped up in the -- [interrupted] that's exactly what you're getting the broadband service that you need and want.

Doug Dawson: Right. Right. I mean at the other aspect is, limiting web searches and you know, fast lane slowing down stuff, the little guys will probably never do that and that's just bad customer service because that's their one competitive advantage -- because they're all competing against the bigger guys almost always. So. So I think that's the one area they won't go to. So. But, you know, we'll see. I think it surprised me there too. So.

Christopher Mitchell:: Sure. I'm curious what you've seen the last few years. In the, in the 2015 order when net neutrality's established. That was also the time when, when the FCC, Tom wheeler led the FCC in overruling North Carolina and Tennessee's barriers against municipal networks, some of the barriers. That lead to a spike, a lot of news stories, a lot of cities considering networks, many more feasibility studies than we'd seen in the past, we've not yet seen a, you know, a doubling. We've seen an increase of cities getting into this business. Recently with the net neutrality repeal. We're seeing again, tremendous interest from cities and activists that are getting organized. Is this space going to start really growing much more rapidly?

Doug Dawson: It's actually grown a lot more rapidly than you think. Because where all the growth is as a public private partnerships. Cities are going, "Look, I will kick in some money to help you build." And then an ISP is doing the actual construction, running the networks and you don't think of those as municipal projects so much and a lot of them are very quiet and they don't make big press. But that's where we're seeing all the growth. And so, so I think, you know, most cities don't really want to be an ISP. If they're not already with our own power company or something where they're used to a technical interface with customers, they're still scared to death of that. As well they should be. I think there's actually more interest than I've ever seen, but probably three quarters of those are headed towards public private partnerships. And so, you know, they don't really care what the model is to get broadband to their community and you know, they don't -- Cities don't feel like they have to be the one to drive it. They just want people to get the speeds they want, and they want the ISP to be someone responsible -- and they would like -- and they would like that to be someone local, which is not always possible. But they would love the profit's not to run into some big city, but at this point cities go, "I need broadband than anything that gets me that is acceptable." They there are a lot less picky than they were five years.

Christopher Mitchell:: Are you seeing the public private partnerships getting executed? Because that's. I agree with you, there's been a tremendous interest in that, um, but you know, Axia exited the US market recently. SiFi is now working with at least two cities, um, possibly more in the near future. But there was five years where they were talking with many cities and there was all this talk of public private partnerships but they weren't executed.

Doug Dawson: The answer is yes, those guys were going after fairly big towns. And so that's never, that has not gone very far because, you know, when you walk into a town where it's a $50 million investment or $100 million investment, there's not many players in that market. So what we're seeing, though, is public private partnerships that are out, you know, in a lake front in Minnesota and a little mountain town in Colorado. And they're there and they're working together to bring broadband to 100 people or 500 people or a thousand people. And there's a lot of those going.

Christopher Mitchell:: Okay.

Doug Dawson: So very slowly. And they're mostly working with either, um, you know, independent telephone companies who are doing a tremendous amount of this expansion out of their own pocket. Uh, there's some very good wireless companies who are doing it with the right technology, are doing a good job. And there's, there's a few independent guys who are just on, and I have a client in Kansas who's out of his own pocket, has built 5 or 600 miles of fiber to the home in the most rural places. You can't imagine that would make a good business plan. But he's making a really good go at it. Uh, so, you know, very slowly they're picking it off. Unfortunately, when you look at the map of who doesn't have it and you plot all these out, it's still doesn't color very much of it from, you know, not having fiber to fiber. But, but that's where the growth is. Unfortunately. I don't know that there's going to be an easy answer to the towns that need a $50 or $100 million investment because that's hard money to raise for anybody in. those companies have tried it. They, they really didn't succeed. That sound. I don't hear a lot of new ones coming along. We'll see.

Christopher Mitchell:: Well, thanks for your insights today. It's been a really good conversation, getting some candid answers to some of these things where we all see just press releases regurgitated in the press, unfortunately.

Doug Dawson: Yeah. Well that's 5G for you. that's a if that's technology by press release.

Christopher Mitchell:: Right. Thank you so much.

Doug Dawson: All right, you're welcome.

Lisa Gonzalez: That was Doug Dawson from CCG Consulting. We have transcripts for this and other podcasts available at MuniNetworks.org/broadbandbits. Email us podcast@MuniNetworks.org. With your ideas for the show, follow Chris on Twitter. His handle is @CommunityNets. You can also follow MuniNetworks.org stories on Twitter. The handle is at MuniNetworks. Subscribe to this podcast and the other ILSR podcasts, Building Local Power and the Local Energy Rules Podcast. You can access them on Apple Podcasts, Stitcher, or wherever else you get your podcasts. Never miss out on our original research. Subscribe to our monthly newsletter at ILSR.org. Thanks to Arnie Huseby for the song "Warm Duck Shuffle" licensed through Creative Commons, and thanks for listening to episode 306 of the Community Broadband Bits Podcast.

Link: Tags: transcript

Community Broadband Media Roundup - May 21

May 21, 2018

Alabama

Sen. Doug Jones pushes rural broadband expansion by Mitch Sneed, Alex City Outlook

 

Colorado

Cortez to reveal results from internet feasibility study by Stephanie Alderton, The Cortez Journal

Pikes Peak region's rural communities looking for broadband on-ramp by Rachel Riley, Colorado Springs Gazette

 

Georgia

The Big Disconnect: Google Fiber’s Unfulfilled Promise In Atlanta by Jim Burress, WABE

Commission District 1: Patrick Davenport and Sharyn Dickerson by Blake Aued, Flagpole

Sharyn Dickerson: Create a Municipal Broadband Network. If determined to be feasible, given a recent presentation to Athens-Clarke County, work to establish a Municipal Broadband Network. The goal would be to provide residents living in more rural portions of our community (e.g.: District 1) with secure and reliable internet access.   Consider possible capital funding needed to build wireless network system through a future Special Purpose Local Option Sales Tax project.

 

Massachusetts

Sandisfield candidates talk roads, broadband, economic development by Heather Bellow, Berkshire Eagle

 

Michigan

TCL&P wants fiber network operator by Jordan Travis, Traverse City Record-Eagle

One Democrat’s Bold Plan to Win Back Rural Trump Voters: Cheap Internet by Gideon Resnick, The Daily Beast

In Michigan, Democratic gubernatorial candidate Abdul El-Sayed has embraced that philosophy. But he's also gone a small step further, with a quirky, more modern policy twist designed to bridge the divide between Democratic urban areas and rural Republican ones.

He wants to give people cheap Internet.

El Sayed, whose unique bio as a Muslim doctor and public health expert serves as the kind of Democratic ideal in 2018, proposed what he is calling the Internet for All or MI-Fi plan last week, which would essentially create net neutral public broadband in the state.

 

Minnesota

Broadband service spreading in rural Murray, Pipestone counties by Karl Evers-Hillstrom, The Daily Globe

Last year, Murray County and Pipestone County partnered with four other southwest Minnesota counties and the Blandin Foundation to conduct feasibility studies — also done by Finley and CCG — in hopes of getting a similar outcome.

Pipestone County’s study was completed in February 2017, and later that year, Ruthton-based Woodstock Telephone received a $363,851 grant from the Minnesota Border-to-Border Broadband to provide fixed wireless broadband to rural Pipestone County.

The state’s 2017 report found that most of the geographic area of rural Pipestone County is underserved (internet speeds less than 100Mbps download/20Mbps upload) and large sections of the western and northwestern part of the county are unserved, or without any form of broadband internet (less than 25/3).

County board looks to enter broadband program by Ben Farniok, Southern Minnesota News

 

Missouri

People should have equal access to internet services by Andrew Braun, St. Louis Post-Dispatch

 

New Jersey

Menendez, small business owners argue for restoration of net neutrality by Briana Vannozzi, New Jersey TV Online

In December, the Republican lead FCC voted to end the statute creating equal treatment for all internet service providers, citing a free market as the goal. But advocates argue ISPs [internet service providers] could block or slow down content, creating tiered networks, in favor of larger corporations able to pay higher fees for faster service. Democrats in the U.S. Senate are poised to pass a resolution under what’s known as the Congressional Review Act, to overturn it.

“Forty-nine Democrats, all 49 Democrats in the U.S. Senate, have signed to the petition to have this vote and are committed to voting for it. One Republican, Susan Collins, has committed to voting for it,” Menendez said.

“If a hosting service increases the price because the ISP is charging them more, everything will trickle down to us so I may not be able to sell a service that I see for $100 to a brokerage because now my hosting service may be $5,000 a month,” said Alcides Aguasvivas, co-owner of Pix-l Graphx.

 

North Carolina

Wilsonian recognized as advocate for local broadband by Brie Handgraaf, The Wilson Times

 

Oregon

High-Speed Internet Coming To Hillsboro, Officials Say by Hillsboro Patch

 

Tennessee

What Do Statewide Candidates Say About Rural Tennessee? by The Memphis Daily News

Rural broadband is a game changer. High-speed broadband is not a luxury: it is a utility, as important as lights and water. Broadband would improve educational and business opportunities in our rural areas, allowing small businesses and entrepreneurs to deliver their products around the world. Former Gov. Ned Ray McWherter had an equation: roads plus education equals jobs. I put a 21st century spin on my fellow West Tennessee Democrat’s equation by adding broadband. While we have put some resources towards this on the state level, we must do more.

MUS FiberNet meets mounting demand by Morristown Citizen Tribune News Staff

 

Virginia

Surry not only county hunting solutions by Diana McFarland, Smithfield Times

Nelson County considers transferring network to CVEC by Emily Sides, Nelson County Times

Universal broadband plan is presented by Virginia Business

 

Washington

Port of Skagit, utility district form broadband company by Skagit Valley Herald, Seattle Post-Intelligencer

 

West Virginia

We can lead the way with broadband advancement by The Journal-News Editorial Board

 

Wisconsin

Reedsburg Utility re-brands to tout unthrottled gigabit internet service by Erica Dynes, Reedsburg Times-Press

 

General

If we want better broadband, more research needs to come first by Ingrid Schroeder, The Hill

This is Ajit Pai, Nemesis of Net Neutrality by Andrew Rice, Wired

Senate votes to overturn Ajit Pai’s net neutrality repeal by Jon Brodkin, ArsTechnica

The US Senate today voted to reverse the Federal Communications Commission's repeal of net neutrality rules, with all members of the Democratic caucus and three Republicans voting in favor of net neutrality.

The Senate approved a Congressional Review Act (CRA) resolution that would simply undo the FCC's December 2017 vote to deregulate the broadband industry. If the CRA is approved by the House and signed by President Trump, Internet service providers would have to continue following rules that prohibit blocking, throttling, and paid prioritization.

ACLU: LocalGov Guide to Providing Net Neutrality by Efficient Gov Staff

Tags: media roundup

Fate of Network Neutrality Now in the Hands of the House

May 21, 2018

Network neutrality protections are scheduled to disappear on June 11th. In an effort to reverse the FCC’s decision that will put millions at risk by eliminating market protections, 52 Senators voted in favor of a Resolution of Disapproval on May 16th. The vote was enough to pass the Resolution and send it on to the next step under the Congressional Review Act (CRA).

Heading to the House

In addition to the full roster of Democrats, Republican legislators, Republicans Susan Collins of Maine, Lisa Murkowski of Alaska, and John Kennedy of Louisiana, voted in favor of the bill. Last February, citizen groups in Louisiana joined together to show support for network neutrality, staging rallies in four cities and visiting Senator Kennedy with thousands of signatures on a petition urging him to support the Resolution.

Now that the measure has passed in the Senate, it faces a tougher time in the House, however, where passage requires more votes to obtain the necessary majority. Advocates are busy organizing citizens, businesses, and entities to express their support for the policy and demand that Representatives take the same route as the Senate.

“We will continue to fight for net neutrality in every way possible as we try to protect against erosion into a discriminatory internet, with ultimately a far worse experience for any users and businesses who don’t pay more for special treatment,” said Denelle Dixon, chief operating officer at Mozilla.

The Congressional Review Act

Unlike in the Senate, there is no fast-track option from the House Committee to the House Floor. If the House Committee fails to report, however, a majority can force a vote. Like in the Senate, a simple majority in favor of the Joint Resolution is required for passage — 218 votes in the House.

Let your Representatives know that you support network neutrality and that you also support the Resolution of Disapproval to overturn the FCC’s repeal of network neutrality. Call or email them directly and let them know how you feel. Share our maps and fact sheets with them that show just how dire the situation will become when millions of Americans are forced to relay on ISPs that are known network neutrality violators. Be sure to share your own experience, especially if you live in a rural area where you already have little or no choice of Internet service provider and let them know that their position on network neutrality and high-quality connectivity is an important voting issue for you.

Learn more about the CRA from this short Public Knowledge video:

Tags: network neutralitylegislationhouse of representativesfccfederalmarketelected officials

Watch the Reality of Rotten Rural Connectivity: "Dividing Lines" Docu-Series

May 18, 2018

If you have fast, affordable, reliable Internet access, there’s a good chance you don’t live in rural America. With the exception of areas served by local municipal networks, cooperatives, and a few small independent ISPs, businesses and residents in rural areas suffer along with aging, slow, and often expensive connections. In a docu-series by Maria L. Smith, titled “Dividing Lines,” viewers get the opportunity to hear firsthand what it’s like for people who live in places where there is no high-quality connectivity. 

The docu-series uses the situation in Tennessee to focus on how big corporate ISPs like AT&T, Comcast, and Charter, heavily influenced the state legislature to revoke local telecom authority. The state is still subsidizing the big incumbents, but their not keeping their promises for better connectivity in rural Tennessee.

Smith describes her project and its purpose:

The online world is no longer a distinct world. It is an extension of our social, economic, and political lives. Internet access, however, is still a luxury good. Millions of Americans have been priced out of, or entirely excluded from, the reach of modern internet networks. Maria Smith, an affiliate of the Berkman Klein Center for Internet & Society and Harvard Law School, created Dividing Lines to highlight these stark divides, uncover the complex web of political and economic forces behind them, and challenge audiences to imagine a future in which quality internet access is as ubiquitous as electricity.

This four-part series is being deployed by organizations and community leaders across the country, from San Francisco to Nashville to Washington, DC, in an effort to educate stakeholders and catalyze policymaking that elevates the interests of the people over the interests of a handful of corporations. 

Watch the trailer:

If you are interested in hosting a screening of the capstone video, email Smith@DividingLines.org

Visit the website for a second trailer and to learn more.

Tags: videoruraldocumentaryberkman klein center

Bernie Sanders Video on Network Neutrality Features Our Christopher Mitchell

May 17, 2018

Vermont was one of the first states to take decisive action to try to curb the harmful consequences from the repeal of network neutrality. It’s only fitting that Senator Bernie Sanders recently released a video on network neutrality featuring one of the country’s experts on connectivity — our own Christopher Mitchell.

The video details how the FCC’s decision to eliminate federal network neutrality protections will harm rural America. Christopher describes the lack of competition as it exists today and how services and prices will change to the detriment of subscribers if we move forward without network neutrality in place. 

“We can’t expect competition in rural areas, [they] are, in many cases, only going to have one high-quality network provider,” says Mitchell. “Losing net neutrality means that the cable and telephone companies are going to be able to set up toll booths and charge more money on the networks they’ve already created.”

Check out the video and share it widely:

Trying to Fix The Mistake

When FCC Chairman Ajit Pai and the other Republican Commissioners voted to repeal network neutrality last December, advocates mobilized. The decision put more than 170 million Americans at risk of losing market protections. By using the Congressional Review Act (CRA), Democrats in Congress hope to reverse the Commission’s decision. The repeal formally goes into effect on June 11th.

On May 16th the Senate voted to reverse the FCC decision, 52 - 47; the next step in the process requires the House to take up the measure. Groups such as Fight for the Future are prepared and have started campaigns to convince the House to vote on the same issue. You can sign their Red Alert for Net Neutrality here.

Tags: videochristopher mitchellnetwork neutralitysenator bernie sandersVermontfccfederalsenate

Senate Considers Network Neutrality Today; Maps Show Millions At Risk

May 16, 2018

It’s May 16th and today is the day the Senate will vote on whether or not to reverse last December’s repeal of network neutrality rules by FCC Chairman Ajit Pai and other Republican FCC Commissioners. As a reminder, we thought this was a good day to pull out the maps we created that illustrate how that decision to repeal the federal policy put at least 177 million Americans at risk. Without network neutrality protections in place, these folks are limited to obtaining broadband Internet access only from providers that have violated network neutrality or have admitted that they plan to violate network neutrality tenets in the future.

Visualizing the Risks

Back in December 2017 when the current FCC made it’s misguided decision, we decided to take a look at the data and create visualizations to paint a picture of what they had done. We used Form 477 data, which tends to overstate coverage, so the problem in the field is likely more severe than the maps indicate. The results aren’t pretty.

 

At least 129 million people have only a single provider from which they can subscribe to broadband Internet access. The FCC defines broadband as 25 Mbps download and 3 Mbps upload. Out of those 129 million Americans, about 52 million must turn to a company that has violated network neutrality protections in the past and continues to do so.

In some places, the situation is a little better. There are 146 million Americans with the ability to choose between two providers, but 48 million of those Americans must choose between two companies that have a record of violating network neutrality.

For a larger image, download this version [18 MB png]. 

Download Net Neutrality Repeal By The Numbers, U.S.A. Edition, fact sheet here.

 

Sample Regions

We also zeroed in on two areas of the country that include both populous and rural areas. We found that it doesn’t matter if you live in a city or in a small town, without network neutrality rules in place, a person’s options of broadband Internet access are negatively impacted.Approximately 74 million Americans live from Virginia to Maine. Nearly 15 million  of those people will soon be limited to a single broadband provider that has already violated network neutrality. 15.5 million can only choose between two providers that both violated net neutrality. Another 3 million have no broadband Internet access available. 

Download the full East Coast map [12 MB png] 

Download Net Neutrality Repeal By The Numbers, East Coast Edition, fact sheet here

 

Download the full California map [9 MB png] 

Download Net Neutrality Repeal By The Numbers, California Edition, fact sheet here

Of the 39 million people who live in California, about 10 million have only a single choice for broadband Internet access and in those cases, that company has violated network neutrality. Another 9.5 million Californians have two options for broadband Internet access but both have violated network neutrality. Two million people in California have no broadband access. 

When the FCC repealed network neutrality, the 129 million Americans with no choice in providers joined the 48 million with a choice solely between past violators and another 29 million Americans lacking broadband altogether to total 206 million Americans who have lost federal protection and now are at the mercy of of massive cable and telephone monopolies. 

Read more details about the risks the FCC have created for a huge swath of Americans in our original story on the data we analyzed.

Takin’ It to the Floor

Democrats in the Senate have expressed support to repeal the FCC decision in order to restore network neutrality. They’re using the Congressional Review Act (CRA) as a tool to attempt to reverse the decision. Under the CRA, Congress can reverse the FCC decision within 60 legislative days of it being published in the Federal Register as long as there is a majority vote. At last count, 50 Democrats and one Republican had vowed to support reversing the FCC decision to repeal network neutrality. Republican Sen. John McCain is absent, which may create the needed majority to pass the resolution. The situation in the House is more precarious due to the Republican majority. Without a repeal of the harmful FCC decision, network neutrality protections will formally disappear as of June 11th.

Public Knowledge has created a quick video describing the process:

Tags: network neutralitysenatefccajit paicongressfederalmarketmappingmapdata