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Maine Bill To Restrict Authority Up For Hearing May 2nd

April 27, 2017

Earlier this week, we learned that a bill in the Maine House of Representatives had been introduced that would steal local telecommunication authority from communities working to improve their connectivity. LD 1516 / HP 1040 was assigned to the House Energy, Utilities and Technology Committee and is scheduled for a hearing on May 2nd at 1 p.m.

No Barriers...Yet

Maine is a mostly rural state that doesn’t draw much investment from national cable and telephone companies, so in the past few years local folks have started taking steps to improve Internet access for themselves. Their efforts have gotten the attention of the big corporations that fear competition and, since Maine doesn’t have restrictions on municipal networks, it appears to be one of the next targets. Rep. Nathan Wadsworth’s bill imposes a number of restrictions that threaten to derail current or proposed projects to bring better connectivity to several Maine communities. 

The bill is deceivingly titled “An Act To Encourage Broadband Development through Private Investment,” but it will discourage any new investment that may attract new entrants to Maine.

Let Them Know What You're Thinking

If you want to contact members of the committee and tell them that this bill will discourage investment, rather than encourage it, contact information for all the members is available here. The best time to stop a bill is early in committee. If one of these elected officials represents you, be sure to let them know.

Tags: mainelegislationme ld 1516me hp 1040rurallocalgrassroots

Charles City, Iowa, RFP : Responses Due May 5th

April 27, 2017

Charles City is looking to join the ranks of Iowa municipalities that offer fast, affordable, reliable connectivity via publicly owned fiber. The town of approximately 7,600 people released a Request for Proposals (RFP) for a Fiber-to-the-Premise Feasibility Study earlier this month. Responses are due May 5th.

In 2005, Charles City voters approved a referendum that gave the city the authority to establish a telecommunications utility. They’ve already taken steps to pursue an Internet network infrastructure project, but incumbents Mediacom and CenturyLink have made marginal improvements in local services whenever the city appeared to move beyond a the feasibility study phase. So far, the city has held off from making their own investment.

In 2014, they joined with ten other Iowa communities to study the possibility of a regional effort, which later became known as the Iowa Fiber Alliance (IFA). The positive outcome of that study encouraged Charles City to continue on and, after funding a local preliminary study, they decided to commission a full feasibility study.

In this RFP, Charles City states that its intention is to offer retail services, but the study should also include information about other business models like open access and public-private partnerships. They are looking for several proposed financing options, including General Obligation (GO) bonds and revenue bonds.

Iowa Fiber Alliance

The regional effort in which Charles City is participating may or may not come to fruition, so the community needs its consultant of choice to consider three different possibilities. From the RFP:

SCENARIO 1: IFA builds a fiber transport network of which Charles City has ownership rights. The City shares a proportional share of network construction and operations. The IFA aggregates Internet bandwidth among members and provides at least two diverse connections to peering points. For video and telephone service architecture, Charles City receives services from other IFA members. 


SCENARIO 2: The IFA is not built. Charles City still partners with another company for Internet bandwidth, IP video, IP telephone switching services but provides for its own transport capacity by either leasing fiber or building fiber needed for redundancy. 


SCENARIO 3: Charles City connects to another company for Internet bandwidth using redundant built or leased fiber, but builds its own IP video headend and IP telephone switching capabilities. 


View the rest of the RFP for more details.

Charles City RFP, Fiber-to-the-Premise Feasibility StudyTags: charles city iaiowarfpFTTHconsiderationfeasibilityrural

Tacoma Resolution To Protect Privacy With Click!

April 26, 2017

Recently, state lawmakers in Minnesota passed legislation to protect Minnesotans’ online privacy. In Tacoma, the City Council made a similar move by passing a resolution asking the Tacoma Public Utilities board to prevent ISPs on the city’s fiber network from collecting and selling personal online data. The resolution was an example of local authority stepping in to fill the gap when federal policy fails.

When The State And The Feds Don't Act

Bills were introduced in the Washington State Legislature this session, but state lawmakers didn’t turn them into law. By mid-April, it appeared that the bills weren’t going anywhere so City Council members felt the need to address the issue after the Trump Administration’s FCC allowed privacy protections to lapse.

“I’ve just heard lots of concerns from community members and from boosters of the Click network about privacy,” said Councilman Anders Ibsen… “This also ensures that any private entity that rides our fiber, that uses the Click network, is held to certain ground rules, just really basic ground rules about respecting the privacy of their customers.”

Tacoma's Click! publicly owned network serves about 23,000 people. Over the past few years, the community has debated the future of the network and is still considering several possible scenarios. For more, check out our four-part series on the network's history and an analysis of the benefits from this public investment.

Local Network = Local Control

Like many of the local and regional ISPs that tend to offer services via publicly owned infrastructure, the two providers on Click’s network already commit to subscriber privacy. Since the announcement that privacy protections would be rolled back, several municipal networks that offer retail services have also assured their subscribers that collecting and selling information such as location data, search history, app usage, and browsing history just isn’t in their wheel house. Chattanooga’s EPB Fiber and Optilink in Dalton, Tennessee, are a few that have let customers know that they don’t use, monitor, share, or sell the type of data the new regulations allow ISPs to collect and sell.

Fletcher Kittredge, founder and CEO of GWI, an ISP offering services via public fiber in several Maine communities, is very opposed to data collection. He has stated his company would collect and sell data “over my dead body.” When privacy issues have come up in the past, national companies like AT&T have collected and sold data hand over fist, but smaller companies like Xmission in Utah are even willing to stand up to the feds to protect customer privacy.

Because the city of Tacoma is still considering the future of its network, the City Council included a provision in their resolution. If the asset is eventually sold to a private provider, the resolution requests that the privacy protections be included in the negotiations, at least until the state or federal government embraces similar protections.

While the final decision about adopting the new rule is up to network officials, the city’s attorney reported to the council that Click’s general manager sees no problems in adopting the new rule.

From Resolution 39702:

BE IT RESOLVED BY THE COUNCIL OF THE CITY OF TACOMA:

Section 1. That the City Council hereby requests that the Tacoma Public Utility Board (“Board”) prohibit Internet service providers (including Click! Network pursuant to an “All-In” Retail Business Plan) who have entered into agreements with Tacoma Power to use Click! Network from collecting or selling personal information from a customer resulting from the customer’s use of the Internet without express written approval from the customer.

Section 2. That the City Council hereby requests that the Board prohibit its Internet service providers (including Click! Network pursuant to an “All-In” Retail Business Plan) from refusing to provide services to a customer on the grounds that the customer has not approved the collection or sale of the customer’s personal information.

Section 3. That the City Council hereby requests that in the event that Click! Network is sold or leased, the prohibitions as set forth in Sections 1 and 2 above be included as condition of the sale or lease.

Section 4. That the prohibitions requested in this resolution shall remain in effect until such time as either the federal government or the state of Washington enacts the same or broader privacy and security protections for Internet users.

Check out the full text of Resolution 39702.

2017 Tacoma, Washington, Resolution 39702Tags: tacomawashingtonclick!privacyresolutionlocal

Transcript: Community Broadband Bits Episode 249

April 25, 2017

This is the transcript for Episode 249 of the Community Broadband Bits podcast. We have a returning guest, Alyssa Clemsen-Roberts of the Pedernales Electric Cooperative in Texas. She provides a first-hand perspective of the decisions and challenges facing electric cooperatives. Listen to this episode here.

Alyssa Clemsen-Roberts: I think also as you watch come cooperatives have great successes you'll see others follow.

Lisa Gonzalez: This is episode 249 of the Community Broadband Bits podcast from the Institute of Local Self Reliance. I'm Lisa Gonzalez. Alyssa Clemsen-Roberts is Vice President of Communications and Business Services for Pedernales Electric Cooperative. Pedernales serves a large region in Central Texas. In this episode, Christopher gets some honest perspective from someone who can offer unique insight from the world of cooperatives. They discuss a range of issues, including new Legislation from Tennessee, and how it will effect cooperatives. Alyssa and Christopher also get into the challenges that cooperatives must consider, when determining whether or not to offer connectivity to members. You can learn more about Pedernales at pec.coop. Now here is Alyssa Clemsen-Roberts and Christopher talking about cooperatives and the challenges of deciding whether or not to offer connectivity.

Christopher Mitchell: Welcome to another edition of the Community Broadband Bits podcast. I'm Chris Mitchell. Today I'm back with Alyssa Clemsen-Roberts, the Vice President of communication and business services for Pedernales Electric Co-op. Welcome back.

Alyssa Clemsen-Roberts: Thanks Chris, Thanks for having me.

Christopher Mitchell: For people who have been long time listeners, Alyssa has been on the show before, although she was not with Pedernales before. Alyssa you have a lot of experience working with rural utilities and thinking about broadband, tell us a little bit about Pedernales. It's one of the nation's smaller electric co-ops, if I remember correctly.

Alyssa Clemsen-Roberts: Yes it is actually the nation's largest electric cooperative. We have about 289,000 meters at this point. Last year we added 12,000 meters, so we will hit the 300,000 meter mark this year and for those of you who don't know, 12,000 meters is about the size of an average cooperative. We're adding basically a co-op every year and our territory spans, it's almost the size of the state of Massachusetts to put it in perspective.

Christopher Mitchell: Yeah.

Alyssa Clemsen-Roberts: It's big.

Christopher Mitchell: I think that 3 out of 4 of the municipal electric companies have 7500 meters or something like that. So you guys, you're almost like Amazon. You're not only growing, you're growing faster than everything else.

Alyssa Clemsen-Roberts: Yes, it is an incredible rate of growth which is a good set of challenges, but it creates challenges none the less.

Christopher Mitchell: Right. Now Pedernales itself is not getting into broadband anytime soon. But I wanted to bring you back on for a candid conversation about some of the challenges, the realistic discussion about what's happening with co-ops as they are considering building a network. Not to say we haven't had realistic discussions before, but Alyssa, I've always enjoyed your unvarnished, I'm going to tell it to you straight kind of approach. But we had some breaking news that we can cover as well. What's happening in Tennessee, so maybe we'll start there. You know, Tennessee is about to sign this bill. What are you thinking about this bill about rural broadband in Tennessee?

Alyssa Clemsen-Roberts: Well I think the fact that they finally taken the handcuffs off electric cooperatives in Tennessee is fantastic. I know that there are several co-ops in Tennessee that have been talking about this for the last couple of years, but they kind of been living in this world of uncertainty, if I do this will the legislature slap me down later, if I do this am I going to make this investment and then find that I'm not allowed to do this? Which you've seen municipal electrics have that situation so they've really been living in a world of uncertainty wanting to provide this service to their members but just cautious, and there's not anything wrong with being cautious so I think that was a big win. The idea that muni's aren't able to come out beyond their boundaries and serve unserved folks in rural America is a sad day for Tennessee for sure.

Christopher Mitchell: Right, now in Tennessee the law that was prohibiting your electric co-ops from doing fiber was really at odds with Federal law and arguably in violation of Federal law, it would have been struck down if the co-ops had wanted to make a big court case about it, but I think the co-ops are more focused on what they could do locally rather than having to hire lawyers and get involved in a protracted legal dispute.

Alyssa Clemsen-Roberts: That really is the issue. So do you want cooperatives spending money to fight this in the courts, or do you want cooperatives saying, hey let's put our resources into our communities and actually build a network. So I think that again was a win for the co-ops, because now they can put their resources where they choose to instead of again ending up in a large legal battle with these behemoth for profit corporations that, they're good at this and they don't mind spending a ton of money on it. So I think that's the equalizer though when you talk about electric cooperatives and big tel co, big cable. I always say they have the money and the lobbyists but we have the people, and that matters.

Christopher Mitchell: I think that's right, now I just wanted to note for people who have been following our website and maybe our press releases where we've gotten a lot of coverage we've been just blasting this law coming out of Tennessee, which the governor is still expected to sign as we are recording this show, and probably will have signed by the time it airs. Because of that limitation of the electric municipal providers because it just doesn't make any sense. But I am very excited that co-ops will be able to expand with fiber. The last thing I wanted to cover though was this kind of intrigue about whether or not they would be allowed to offer television services, and I thought you could tell us a little bit about why that's important, because it seemed like it almost was lost in the larger discussion about broadband.

Alyssa Clemsen-Roberts: Well it is. The thing about the television services, I think you're seeing, so a newer generation, the younger generation, and they're younger than I am, but they're cutting that cord when it comes to cable. They're going to a pure, digital format and they're fine with that. But then everyone else is still kind of like, man I really like my cable TV. And so when you take that option off the table, it is very hard to get folks to sign up for your broadband service. So by inserting that prohibition initially, you were basically crippling the cooperatives or limiting their take rates or making it much, much harder to make these projects feasible as AT&T very well knows, because when they made the argument with the FCC that they should be allowed to sell DirecTV, that was their exact argument. So it's kind of ironic that they're own argument came back to bite them.

Christopher Mitchell: It's not the only time that could happen, so I'm glad that it does happen from time to time. And it's worth noting of course that AT&T owns a lot of rural areas by virtue of the fact that they own DirecTV and so for them trying stop the co-ops from providing television service is just yet another way in which they're trying to establish a monopoly for their own services.

Alyssa Clemsen-Roberts: Yes, and it's funny because every time you see this crop up in a state legislature, it comes out like it's a for broadband competition bill, but as you read the bill it becomes very, very obvious that all they're trying to do is hold onto their monopoly.

Christopher Mitchell: Now let's talk about some of the challenges and some of the reasoning that happens when a co-op is thinking about whether or not to get into the fiber game. One of the things that you've identified is just the comfort level with where they are. You have an entity that has done a good job providing electricity, in fact we've actually been passing a book around our office talking about rural electrification and the early co-ops, and it is amazing how much better they were than the private companies in the few areas in which private companies deigned to invest in rural areas. So these are rural electrics that have done a really good job of providing service in hard to reach areas. I may criticize them from time to time with long term power purchase agreements on coal, but the fact is the lights generally stay on. And they're very comfortable in that business area.

Alyssa Clemsen-Roberts: And I think that is a big issue, and it's something that we talk about a lot in the co-op world. We went from this, you think about in the 1930's when, and 1940's when rural electric cooperatives started providing service. I mean this was a territory again no one wanted to serve. For profit electric companies were like, can't be done, won't be done, and kept providing all these obstacles to make this happen. Rural groups got together, rural community leaders and they said we're going to do this, we're going to take this risk. So we have kind of gone from this high risk, high reward model that we originally created into a very comfortable low risk, still high reward, but low risk model. And so I think when you make that transformation over time, I think it's hard to go wow, we've got a lot at stake here. I think you're also talking about in terms of investment, some of these investments into fiber will equal or outpace what the cooperative has invested in electric infrastructure, and I think that causes a moment of pause too. And then you have this second idea that should rate payer funds for electricity be used to provide broadband service, and be used to make those initial investments into infrastructure. I think the cooperatives that are doing broadband right now have done a very good job of segmenting that, saying you know we're going to use our good credit and our good faith as the electric cooperative to leverage for funding, but your rates will not be subsidizing the broadband business. Instead they've taken this model where they're almost utilizing their broadband service to help subsidize the electric side of the business to keep rates low. Again I think it's one of those decisions where you have companies that are so stable and so comfortable that it's very hard for them to go out into this world that is very competitive, very cutthroat. Every other day we're watching a pole attachment bill pop up across the country, you watch trying to limit cooperative broadband trying to limit municipal broadband. I think it's also do you want to poke that bear. Do you want to get into a dog fight with these large corporations and I think it's something that cooperatives have to weigh, but sometimes I worry that they weigh too much into that.

Christopher Mitchell: It's something that is very complicated, and although when I weigh a lot of those complications and I try to think about it neutrally from the perspective of a person living in these areas I generally think the co-ops should be at the minimum seriously considering it and penciling out the numbers, and maybe just starting in the areas where it looks best, but I want to pull out a couple of things you said and just dive into them quick. I think one is, recognizing that this is riskier than electricity.

Alyssa Clemsen-Roberts: It is.

Christopher Mitchell: The demand for electricity was eventually much greater. I don't know that it was immediately, but in rural areas where co-ops are doing this I think we're seeing take rates in initial areas that are in the low 40's to upper 60's depending on the territory. And I think electricity take rates were higher in the times when that was introduced.

Alyssa Clemsen-Roberts: Yes, that would be correct. You know we talk about the low 40's to low 60's and nothing more, that's a pretty good take rate.

Christopher Mitchell: It is, right.

Alyssa Clemsen-Roberts: When you're talking about cox communications service. And again you have to adjust your thinking. You know, I'm saying you have to adjust what you're modeling this on. It's worth noting that that is true. But again, it's out of our area of expertise, it's out of our comfort zone and I think that's a hard thing, but I come back to everyday another cooperative is doing a study, is taking a look at this, and I think it's going to continue to grow where we're seeing an incredible amount of retirements in our industry. I think if I were two years, three years, four years from retirement I would have a hard time making a decision to explore something like this.

Christopher Mitchell: Yes.

Alyssa Clemsen-Roberts: It's hard to make those decisions when you're going to leave this for someone else, so I think as we continue to see our industry change and evolve and these large amount of retirements. I think also as you watch some cooperatives have great successes, Midwest Energy up in Michigan, Co-Mo in Missouri, Bark Electric down in Virginia, I mean you've got this wide variety of cooperatives that are really succeeding, I think you'll see others follow. But they just want to be sure.

Christopher Mitchell: Right. I've been saying that I feel like this is a viral spread. I got some of this talking with John Chambers at Conexon where it seems like, I see this in municipal broadband as well, where if you live in a small community and no one for a hundred miles around you has good Internet access, you're okay. Everyone's kind of upset, frustrated, wants something better but you're not losing businesses at the same rate where as if 30 miles away you can get very high quality Internet access. Then suddenly you're in a situation where you have to do something. And I think that as we see a few of these rural electric co-ops doing it across their entire footprints, it's just going to put pressure on those around them to do it because otherwise we're going to see population shifts. And that's a real threat to the existence of the cooperative which if electricity demand declines then they're really going to be in a bad spiral.

Alyssa Clemsen-Roberts: I absolutely agree, and I think even those that don't have someone next to them doing this, we're seeing population shifts already. I think it was 2010 the census had for the first time showed that there was a decline in population in rural America. They attributed this to a number of factors. Kids grow up, they go to college, they leave their community, they can't find jobs back in their community, so what do they do? They move to the city, they move to suburbia, they move to another community that has jobs available. Baby boomers are retiring. They used to retire in droves back to rural America. They are not retiring back to rural America now. Why? Because they're used to having these services. They want access to the Internet. They want to be able to see their grandkids. They want to be able to communicate with them. They want to be able to read the news online. They want to be able to watch Netflix. When you take all of these things into place, you're going to continue to see those shifts, absolutely. But I think it's coming everywhere, I don't think it's just going to be in those areas where the next store has it, I think we're going to continue to see that shift throughout all of rural America. It's a ripple affect. It may be more obvious, when 30 miles down the road you got it, but I think everybody's feeling it right now.

Christopher Mitchell: I think you're right. But I do think that we'll see more motivation perhaps in areas that face that immediate neighbor.

Alyssa Clemsen-Roberts: Oh absolutely.

Christopher Mitchell: But we agree we're just emphasizing different aspects of it.

Alyssa Clemsen-Roberts: Yeah.

Christopher Mitchell: I want to talk a little bit about the financial challenges. And I'll set this up by noting that another difference is that when we establish the rural electric cooperatives they got territory. They got a monopoly on that territory. Having a monopoly on services in a territory enables you to get financing in ways that you cannot get if you're a competitor, even if you're competing against a very weak, large company that has terrible customer service, it may be difficult to get financing. Now some cooperatives may be able to leverage their electric base as security for financing. And some may choose not to do that, some may be prevented from doing that, I'm guessing, because for instance if you're buying power from the Tennessee Valley Authority I don't think they'll let you just cross subsidize in that way. As we talk about financing, let me know, did I sum that up fairly correctly?

Alyssa Clemsen-Roberts: You're absolutely right it is a big issue. And again, some are not willing to do it and some are not able. And I think there's also this idea of, it's a little bit riskier so the interest rates go up, and every time the interest rate goes up it makes the loan or the investment a little less feasible. I think you're also seeing some power struggles at this point even within R.U.S., and where they can finance and how they can finance. Then you've got CoBank and CFC as alternatives and other funding mechanisms. But traditionally co-ops, we borrow from R.U.S.. But now you've got this conundrum because the rural telcos borrow from R.U.S. too.

Christopher Mitchell: Yeah, and we're seeing real efforts by some of the rural telcos to say that it is unfair for them to have to compete with rural electric company. There's one instance in which I can't divulge who it is because they've wanted to keep it quiet, but there's an electric company that's building out to it's territory and it got some rural utility service funds to use in that territory. Maybe for smart grid, maybe for broadband, I'm not entirely aware of it, but the point is they decided to expand to a near-by development that was not in their territory, and is not getting any access to the R.U.S funds but they were nearby, and they really wanted service from the electric co-op and so the electric co-op decided to go ahead and do it. Rural telephone company, very upset about this and saying it was totally unfair, and so trying to basically push R.U.S. to stop giving money to rural electrics for broadband. Unfortunately I think two different entities that both care about rural America, kind of going at it with one of the few sources of money that is out there.

Alyssa Clemsen-Roberts: I would move your kind of to two rural entities, one of whom kind of cares about Rural America--

Christopher Mitchell: Well some of these rural telephone companies--

Alyssa Clemsen-Roberts: I feel pretty vocal on this.

Christopher Mitchell: Right, no and I feel free. I want to be totally honest, if you think I'm wrong, tell me I'm wrong, it's the only way I'm going to learn. Some of these rural telephone companies are telephone cooperatives though, and like any other entity, there are good apple and bad apples. We're not talking about CenturyLink.

Alyssa Clemsen-Roberts: I absolutely agree, and this is the thing - there are some rural telcos who have done a great job of re-investing the taxpayer funds back into their networks to provide good service. I absolutely agree with that. But there are many who have not been taking that subsidy from the state and from the Federal Government all of which is funded by you and me and every other person in this country as a line item on our phone bill, and they have not been re-investing. In fact, I would love for someone to take a look at how much money these rate of return carriers have gotten from the state and the Federal Government, and plot out what that would have built in terms of fiber network.

Christopher Mitchell: Oh I so want to do, it's so hard to get this money, this information, it's just ridiculous.

Alyssa Clemsen-Roberts: Yes, it is, and they make it hard for a reason. And I will tell you having looked at this from a couple different state perspectives, you'll probably want to take a shower when you're done reading.

Christopher Mitchell: Yeah.

Alyssa Clemsen-Roberts: Because what they could have done with this funding is incredible and I will say to these folks, fair is fair, the fair comes to town once a year. We're all grownups, let's move on. And second of all, had you been providing affordable competitive service, we wouldn't be looking anywhere near you to provide service, because that's not what we do. But you don't get to cherry pick the areas that have some density, and provide them, and leave everybody else behind. Because we are going to come and compete with you in those areas, because that's how we further fund rolling out into those areas that you have left behind for years, and years, and years. So my advice to the rate of return carriers, as much as the same of my advice to the price cap carriers; do it, provide the good service, provide affordable service, and you won't have any problem with us. But if you're going to continue to collecting money from our members, and from rural America, and from everybody else in this country, and not provide the service, well you should know we're probably coming for you.

Christopher Mitchell: Now it's worth just noting that when you say rate of return carriers you're generally talking about the smaller providers, the price cap carriers or the big companies, Frontier and CenturyLink, AT&T, those sorts of folks, for people that aren't as familiar with those terms.

Alyssa Clemsen-Roberts: Yes, electro cooperatives are not federally subsidized. We get low interest loans, but it's not a grant giving handout where they've rolled up money from rural America and from urban American and said here, we're going to re-distribute this pot of money for this.

Christopher Mitchell: Forever.

Alyssa Clemsen-Roberts: Right, forever! Our loan programs are fully paid for by the interest we pay on these loans, and so there's this whole idea that it's not fair, and again I would say, if you're providing the service, we don't want any part of it, you provided it. But when you look at this Country and you go okay 4 out of 10 rural American's don't have service, somebody's not providing the service and taken the money, and that's a problem.

Christopher Mitchell: And this is where I get in my sort of small government, proper financial approach hat. I get frustrated with how government programs have been designed historically, because with electricity there was this a sense of we're going to be fiscally responsible, and we're going to be and we're going to give capital loans. Perhaps there was some level of subsidy in the early years, I don't know whether or not the loans are below market anymore, if they were a little bit below market to begin for the electric co-ops, but there was never a sense that ongoing subsidies for electricity. But telephone -

Alyssa Clemsen-Roberts: No, correct.

Christopher Mitchell: There always has been. And in part, it's because of the higher operating costs. When you subsidize crappy technology like DSL in rural areas, it's that you are locking in a high operating cost which then also has to be subsidized. And so if you look at over 10 years of what we're going to get with 10 mega-bit by one mega-bit DSL from AT&T or CenturyLink or whatever, we're going to be paying far more for that than it would have cost to do fiber, because with fiber you no longer need that operating subsidy in most cases.

Alyssa Clemsen-Roberts: Yeah, that's absolutely right, I would include the rate of return carriers in that argument. Again, I would say look at their funding levels. How much have they been getting and have they been building their business on what's best for rural America, or have they been building their business based on this rate of return model, this idea that the more you spend the more you get and not necessarily making good, economic decisions with the best interest of their members and/or customers at heart.

Christopher Mitchell: So let's turn to one of the challenges that I think is going to be facing co-ops, co-ops like yourself at Pedernales if you ever were to go into this, which is when you have a population split across suburbs, exurbs, and then perhaps farmers, just to simplify rural, really spread out member-owners of the cooperative. It seems to me that we are seeing some conflicts between co-ops where a board might be dominated by suburban interests a little bit more, and less willing to invest in connecting everyone. And I fear that we may see the co-op, some co-ops, lose that sense of what brought them together in the first place, which was to make sure that the needs of everyone were ultimately met.

Alyssa Clemsen-Roberts: Yeah, I can see that being a problem, that's kind of the unique aspect of P.E.C., our board is split up geographically, and they've drawn the lines, so we have a pretty good balance I think on our board of rural interests, and then our more maybe suburban/urban interests, so we aren't seeing that. What we're kind of seeing is this is a large investment, parts of our territory are really well served. I have Google fiber in my home and I'm a P.E.C. member. And let me tell you, love the Google. I just love it.

Christopher Mitchell: Just keep rubbing it in. Rub it in, yeah.

Alyssa Clemsen-Roberts: But you know the problem is, you have to have some of this to be able to help subsidize as you head west in our territory. On this side of our territory we're very dense, there's a lot of population, there's a lot of business. But as you move west across our territory we get down to one or two homes per mile. No one can make that feasibly work on a stand-alone project. And that becomes a little bit of a problem too because you need this area where I live in southwest Austin, into Dripping Springs in the central Texas area. You need this to help make the other feasible. So it becomes harder and harder as we continue to watch big providers cherry pick. I would say to Google, I think it's fantastic that you're providing broadband service in these -

Christopher Mitchell: We just lost all audio. I don't know if you can still hear me?

Alyssa Clemsen-Roberts: Was it your end or my end?

Christopher Mitchell: No, it was our end. Our entire office. Again, this is the second time in a row that Comcast has disconnected us, we've had to reboot our business class service. It happened right after you were talking about how great your Google connection is, it's worth noting.

Alyssa Clemsen-Roberts: Yeah. Oh yeah.

Christopher Mitchell: This is -

Alyssa Clemsen-Roberts: Which is so funny, I joked with you that maybe it was AT&T because I keep messing with them.

Christopher Mitchell: Nope, this is just standard run of the mill dealing with Comcast in a business environment. Oh yeah, once everyday it seems like lately we get disconnected and we have to reboot the old modem. At some point we're going to have to call them, at which point they'll explain to me that it's something on my end I'm sure.

Alyssa Clemsen-Roberts: Yes.

Christopher Mitchell: For some reason it's their modem I have to reboot. We've rebooted every other piece of networking equipment. With that aside, which I hope Lisa keeps in the show, you were just describing the challenges of expanding west given the cost when you get down to the low densities.

Alyssa Clemsen-Roberts: Yes, well that's the thing with Google fiber that I had kind of gotten off on a little bit of a tangent but I think it's worth exploring. Google is this great company, right? They basically challenge the status quo that people don't want fiber. People do want fiber. So I would say to Google, and I'm going to challenge them openly, why don't you keep exploring west? You've done this in this suburban and urban setting and you're having some successes, why don't you do something truly revolutionary and continue to press this model and push west. It's great that they can do it when you've got 40 and 50 and 60 homes per mile but why don't you keep rolling west for us and provide some great service because I think that the model has been proven over and over and over again. I'd love to see Google take on that challenge and do something truly revolutionary. Because, what they've done in urban and suburban America isn't really revolutionary. But do something really cool.

Christopher Mitchell: It does seem to be over though, unfortunately. There's been a number of people that have argued that yeah, that would be revolutionary up hear in Minnesota, I've seen a number of people in rural areas that were willing to do whatever it would take if Google would prove that there was a business case for building out to them. Which as you know -

Alyssa Clemsen-Roberts: They don't even have to prove it. The co-ops have proved it. So they're going to take credit again for something that's been proven.

Christopher Mitchell: Right, although it's worth noting, and this is something I think we can't emphasize enough, that a business case is different from business to business. A business case for a co-op is different in that a co-op want's to break even. A business case for AT&T, is that it has to make a killing. It's not enough just to be a little bit profitable, its shareholders are expecting increasing profit over time. It's worth noting for people that this is one of the reasons why we see co-ops being so successful in rural America, because it's the right tool for the right job.

Alyssa Clemsen-Roberts: I absolutely agree, and I think it's the argument it's too expensive to do it in rural America, and I think you're point is well taken. It's not that it's too expensive, it's that your rate of return isn't enough. And there's a big difference between being too expensive and you can't make enough money off of it. And I would agree that a for profit company has different factors to take into account, but I would also argue that as a large corporation in this country, you have an obligation, and I think that obligation extends at times beyond your shareholders. It extends to the betterment and the good of America as a whole. Not everything is a bottom line.

Christopher Mitchell: Right and it's certainly a discussion that's popping up again and again. Interestingly I was just reading a book about a history of monopoly and economics, it was called Railroad Economics by Perlman, I think. It's a leftist economics case for why we don't need economics, because a lot of economists tend to be sellouts and just defend the power structure no matter what. I actually really like the tools economics provides but I'm getting a little bit deep just to make this point that well literally 100 years ago as we had the economy becoming taken over by large trusts and monopolies there was a sense that if you had a monopoly you had an obligation to do more than just figure out how to do well for your shareholders. That was called welfare capitalism, I think, was the term that was used in this case. I have to say I didn't find it particularly persuasive but it's a heck of a lot better if you have monopoly, if they are going to be doing something good. If they can't do anything about AT&T, well you certainly can't live with them just screwing us constantly.

Alyssa Clemsen-Roberts: Right. And this is when our phone goes dead again.

Christopher Mitchell: Right. Well I've really enjoyed the conversation, and so I really appreciate your time once again to talk about some of these issues and I think for people who are still trying to figure out what's going on in rural America I hope this helps.

Alyssa Clemsen-Roberts: Yeah, I think it's vitally important to the economy of our country. Imagine if we hadn't electrified rural America. OR what if we said to rural America you can only have two hours of power. Or you can only have enough power to do this or this. Would we be the great nation that we are? And I think we're at that tipping point with broadband. I think it's vital to the economic interests of our nation that we have this opportunity for everyone.

Christopher Mitchell: Yes, I absolutely agree. It's interesting, because if electricity didn't reach all of America it's possible electricity wouldn't be as important to us. We may have evolved in different directions with the way markets work and things like that. But by creating much larger markets we certainly led to advancements more quickly because we have increased productivity. And if we don't expand high quality Internet access to everyone, we won't be able to take full advantage of a high quality Internet. It will not be as good if we deny it to certain people, so there's a little bit of a self-fulfilling prophecy that we need to keep in mind as we're deciding how to connect folks or whether to cut them off effectively. Thank you so much, I hope you have a great weekend.

Alyssa Clemsen-Roberts: Thanks, you too Chris.

Lisa Gonzalez: That was Christopher and Alyssa Clemsen-Roberts, Vice President of Communications and Business services for Pedernales Electric Cooperative in Texas. We have transcripts for this and other community broadband bits 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. Follow MuniNetworks.org stories on Twitter. The handle is @MuniNetworks. Subscribe to this podcast and all of the podcasts in the ILSR family on iTunes, Stitcher, or wherever else you get your podcasts. Never miss out on our original research, Subscribe to our monthly newsletter at ILSR.org. Thank you to break the bands for the song Escape, licensed through creative commons, and thanks for listening to episode 249 of the Community Broadband Bits podcast.

Tags: transcriptruralelectriccooperativefiber-to-the-farmpedernales electric co-op

Bill To Limit Local Authority Appears In Maine

April 25, 2017

Maine is the latest battleground for local telecommunications authority. A bill in the state’s House of Representatives threatens to halt investment in “The Pine Tree State” at a time when local communities are taking steps to improve their own connectivity.

"I Do Not Think It Means What You Think It Means"

Rep. Nathan Wadsworth (R-Hiram) introduced HP 1040; it has yet to be assigned to a committee. Like most other bills we’ve seen that intend to protect the interests of the big national incumbent providers, this one also has a misleading title: “An Act To Encourage Broadband Development through Private Investment.” Realistically, the bill would result in less investment by discouraging a whole sector - local communities - from making Internet infrastructure investment. 

Large national companies have thus far chosen not to invest in many Maine communities because, especially in the rural areas, they just aren’t densely populated. In places like Islesboro and Rockport, where residents and businesses needed better connectivity to participate in the 21st century economy, locals realized waiting for the big incumbents was too big a gamble. They exercised local authority and invested in the infrastructure to attract other providers for a boost to economic development, education, and quality of life.

Not The Way To Do This

If HP 1040 passes, the community will first have to meet a laundry list of requirements before they can exercise their right to invest in broadband infrastructure.

HP 1040 contains many of the same components we see in similar bills. Municipalities are only given permission to offer telecommunications services if they meet those strict requirements: geographic restrictions on service areas, strict requirements on multiple public hearings including when they will be held and what will be discussed, the content and timelines of feasibility studies, and there must be a referendum.

The bill also dictates financial requirements regarding bonding, pricing, and rate changes. Municipalities cannot receive distributions under Maine’s universal service fund.

As one of the remaining states that don’t have restrictions on local authority and one of the most rural states in the country, Maine’s towns and counties are the best poised to turn around its status as poorly connected. Inflicting rules on local communities to make the process more difficult will end investment, not encourage it.

In 2015, Rep. Norm Higgins sponsored a bill to create better connectivity through open access networks and by removing investment barriers. When we asked him about HP 1040, he said, "Competition should be encouraged and local control should not be infringed."

State Battles Can Be The Toughest

Interestingly, Wadsworth, is listed as a state chair for the American Legislative Exchange Council (ALEC) and this bill certainly complements their past work in Maine. It’s easy to see that they want to quell the success of publicly owned networks in rural states in order to prevent the solution from taking hold in more densely populated areas.

This year, similar bills were introduced in Virginia and Missouri. Missouri has seen this fight in the past and, while the bill has been quiet lately, their session isn’t over just yet so anything could happen.

Virginia was especially tough, but grassroots organizations managed to fend off restrictions that could have ended plans for several public projects and plans that included public-private partnerships.

Local Ire For HP 1040

Page Clason, Member of the Islesboro Broadband Committee, described HP 1040:

I would say this proposed bill is puzzling because while suggested to promote investment of broadband in Maine it would do the opposite.  Nothing in the bill provides stimulus, most everything in the bill provides increased hurdles and costs for communities needing the broadband investments. The only stimulus I can garner from such an approach would be that the largest providers would be further comforted that no other service providers would show up to do the builds that the dominating providers have not been supplying for the last few decades.

Check out the full text of the bill and follow its progress.

Update: Since publishing our story, the bill was referred to the Committee on Energy, Utilities and Technology.

Image of the Maine House Chambers courtesy of Maine an Encyclopedia.

HP 1040 / LD 1516 MaineTags: mainelegislationme hp 1040state lawsrockport meislesboro mealecme ld 1516

Policies to Make Markets Work - Community Broadband Bits Podcast 250

April 25, 2017

The larger focus of our work in the Community Broadband Networks Initiative is to ensure communities have the networks they need. Our guest for Community Broadband Bits episode 250 is an expert in how markets break and the policies that make them work. 

Gary Reback is a well known Silicon Valley lawyer and Of Counsel at Carr Ferrell LLP. He also wrote an excellent book, Free the Market: Why Only Government Can Keep the Marketplace Competitive that I fully recommend. Reback has had a front-row seat to the failings of government policy that has allowed a few technology firms to garner so much market power today.

We talk broadly about markets and monopoly rather than focusing on broadband and telecommunications. This is a good introductory conversation for people unfamiliar with the real threat and harms of monopoly. 

A related conversation is my interview with Barry Lynn in episode 83.

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

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.

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: marketfree marketmarket powercompetitionpolicynationalantitrustmonopolyeconomicsaudiopodcastbroadband bitsconsolidationmerger

Community Broadband Media Roundup - April 24

April 24, 2017

California

Sonic CEO: Speak up as your Internet privacy gets sold for profit by Dane Jasper, North Bay Business Journal

 

New York

Tyre residents surveyed on desire for broadband access by David L. Shaw, Finger Lakes Times

Grand Island is right to explore its own Internet service by Buffalo News Editorial Board

 

Pennsylvania

Monroe County, Pa., issues RFP for 'Monroe Gigabit Project' by Bill Cameron, Pocono Record (Government Technology)

 

Oregon 

Local ISPs say they'll never share information by John Darling, Ashland Daily Tidings

 

Tennessee

Private telecoms get another win over municipal broadand in Tennessee by David Z. Morris, Fortune

Rural Tennesseans could have gotten free Internet but their legislators shut it down by Lauren C. Williams, ThinkProgress

Tennessee bills send message on municipal broadband by Josh Cohen, Next City

Instead, the legislature passed the Tennessee Broadband Accessibility Act, a bill pushed by Governor Bill Haslam. It provides $45 million in tax breaks and grants to private companies such as AT&T and Comcast to build broadband infrastructure in communities that need it.

“I find that infuriating. Chattanooga has not only one of the best networks in the nation, but arguably one of the best on Earth and the state legislature is prohibiting them from serving people just outside of their city border,” says Christopher Mitchell, Institute for Local Self-Reliance’s director of the Community Broadband Networks Initiative.

 

 

Virginia

The broadband split in Northern Virginia by Peter Galuszka, The Washington Post

 

Washington

Tacoma City Council: Click ISPs can't collect or sell your personal info without permission by Candice Ruud, Tacoma News Tribune

 

West Virginia

Broadband bill gaining support could positively impact economy by Austin Davis, WVVA-TV

Generations unite to solve broadband problem in West Virginia by Tina Alvey, The Register-Herald (Government Technology)

Broadband high-speed Internet: An essential service in today's society by Gaylene Miller, The Register-Herald

 

General

The FCC is leading us toward catastrophe by Susan Crawford, BackChannel

What these cities have in common is that they treat fiber optic internet access as a utility, like water, electricity, sewer service, and their street grid: available to all, without discrimination, at a reasonable cost. That’s completely at odds with FCC Chairman Ajit Pai’s plans for the country. And the tension between these two views is shaping up to be an explosive issue for the next presidential election.

Leasing rural cellular spectrum by POTs and PANs Blog

Donald Trump's multi-pronged attack on the Internet by Susan Crawford, New York Times

If there’s one thing that brings Americans together, it’s our hatred of the giant companies that sell us high-speed data services. Consumers routinely give Comcast, Charter (now Spectrum), Verizon, CenturyLink and AT&T basement-level scores for customer satisfaction. This collective resentment is fueled by the sense that we don’t have a choice when we sign up for their services.

By and large, we don’t: These five companies account for over 80 percent of wired subscriptions and have almost total power in their territories. According to the Federal Communications Commission, nearly 75 percent of Americans have at most one choice for high-speed data.

Want real choice in broadband? Make these 3 things happen by Klint Finley, Wired

Image of the Highlander bull courtesy of FrankWinkler via pixaby.

Tags: media roundup

BVU OptiNet Update: Deal Coming Together

April 24, 2017

A little over a year ago, we first shared the news about Bristol’s decision to privatize its FTTH network, OptiNet. Virginia based Sunset Digital Communications offered to purchase the network for $50 million. The network has saved Bristol millions of dollars, stimulated economic development, and cut telecommunications costs for local residents and businesses. Nevertheless, after several corrupt officials drove the network into a dark period of scandal, all those advancements paled and Bristol was ready to sell the network.

After months of negotiations with BVU’s partner in the Cumberland Plateau area service area, the details for the sale are coming together.

When There's A Partner

One of the last steps to completing the sale required approval from the Cumberland Plateau Company (CPC), which operates as a partner with BVU to bring connectivity to four additional counties in Virginia. As a partner with OptiNet in those areas, CPC owns approximately 50 percent of the assets.

When Sunset Digital offered $50 million for the BVU assets, CPC obtained the right of first refusal for the assets in the four counties where BVU and CPC work together as partners according to their contract.

Back in the fall of 2016, CPC was concerned about the legality and the details of the proposed transaction; they decided to wait for federal and state review before granting approval. Because the NTIA, the Economic Development Administration (EDA), and the Virginia Tobacco Commission provided grant funding to the CPC region for the deployment, the agencies needed to review and approve the proposal. The agencies approved the sale, but required that a large amount of BVU debt be paid. One of the claims that they required be paid was a claim for $8 million from CPC.

Approving The Offer

As part of the offer, Sunset promises to invest $6.5 million to connect more homes and businesses in the CPC region. They estimate CPC will gain about $21 million in revenue over 13 years while Sunset operates the network. CPC will retain ownership of its assets in the CPC service area and Sunset will transfer ownership of equipment in the CPC area to CPC.

After several rounds of negotiations since January, CPC approved the transaction on April 20th. CPC Board member Steve Breeding addressed the deal in a Herald Courier article; he described the situation for the CPC board as “faced with two realities.”

First, finding a way to continue connecting more residents and businesses in the CPC area is a challenge. It was the lack of investment from large private providers that sparked public investment in the first place.

“We really don’t know if there is anyone else that would invest this kind of money in our system and be able to do those things,” [Board Member Seth] White said. “Because we weren’t given that opportunity."

White’s statement echoes other sentiments from CPC board members. Negotiations between CPC and Sunset didn’t start until January 2017 and have been challenging as CPC questioned Sunset's commitment.

According to Stacy, the other reality facing the board is the contract CPC has with BVU, which they don’t consider favorable. CPC weighed the possibility of litigation against BVU when considering the Sunset offer. Rather than spend funds on a costly lawsuit with no guaranteed outcome, the board chose to approve an agreement that ensures what the BVU contract failed to deliver.

“From our perspective, saying yes to this deal is hands-down, absolutely, 100 percent the right decision for this region,” [Virginia Tobacco Commission Executive Director Evan] Fineman said. “It’s not a perfect deal. It’s one that folks can live with. It’s one that gets us moving forward, and it’s one that brings in really significant new revenue to the region.”

The board approved the contract 20 - 8.

Tags: bvuoptinetbristolbristol virginia utilitiesprivatizationvirginiapartnership

Pie (Pai?) for Broadband Monopolies Video From Public Knowledge

April 22, 2017

Public Knowledge recently released a video on changes in the new administration’s FCC policies. One by one, progress made during the last eight years is being sliced up and doled out to the detriment of ISP subscribers.

Public Knowledge describes the video like this:

This video draws attention to the growing list of giveaways by Congress and Federal Communications Commission Chairman Pai to large cable and telecommunications companies that act as local broadband monopolies.

The video, which functions as a broad statement of themes, uses a series of pie slices to detail what consumers fear about the new administration’s telecommunications policy positions, in general language. The pieces of pie reflect multiple potential giveaways being heaped onto big cable and phone companies’ plates.

From selling private data without consent and eliminating some companies’ ability to offer affordable broadband, to forcing consumers to rent set-top boxes and embarking upon efforts to kill net neutrality, FCC Chairman Pai and many in Congress are promoting policies that give consumers the short end of the stick.

Check it out:

Tags: videofccprivacynetwork neutralitypublic knowledgetrumplifelinelow incomeratese-rate

UTOPIA Expanding To Non-Member Towns

April 21, 2017

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

Reaching Out To Other Communities

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

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

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

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

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

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

Broadband Benefits In UTOPIA Towns

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

There are eleven member communities that contributed to the cost of building the network, including Centerville. Mayor Paul Cutler said, “What we find is once people get (service via UTOPIA), they don’t give it up.” More than 80 percent of Centerville’s residents and businesses have access to UTOPIA.

Tags: utopiautahopen accesswholesale-onlyexpansionright-of-wayfranchise

Digital SouthWest Videos Now Available

April 20, 2017

You might not have made it to Mesa for the Digital Southwest Regional Broadband Summit, but you can now watch some of the speakers and panel conversations. Next Century Cities has posted video from panel conversations and the keynote address from Commissioner Mignon Clyburn.

In her address, Commissioner Clyburn said:

“Access to high-speed broadband is a necessity in today’s 21st century economy, providing a gateway to jobs, education, and healthcare. I am honored to join state and local leaders who are on the front lines of closing the digital and opportunities divide. Working together, we can achieve our shared goal of affordable broadband for all Americans.”

The Commissioner’s full remarks were about 18 minutes long:

 

Sharing Knowledge on Infrastructure 

Christopher moderated Panel Two, focused on infrastructure needs, which included CISSP President and CTO of CityLink Telecommunications John Brown, Partner at Conexon Jonathan Chambers, Director of Technology at the Southern California Tribal Chairmen’s Association Matt Rantanen, Manager of Tribal Critical Infrastructure at Amerind Riskand Kimball Sekaquaptewa, and Vice President of Digital Innovation at Magellan Advisors Jory Wolf. If you listen to the Community Broadband Bits podcast, you’ll probably recognize most of these voices.

The video lasts one hour thirteen minutes:

 

The other videos are available on the Next Century Cities YouTube channel page, or watch them here.

 

Welcome and Introduction: Deb Socia, Executive Director of Next Century Cities and Eric Farkas, Fujitsu Network Communications, 7:32

 

 

Q&A with Mignon Clyburn, 18:00:

 

 

Panel One: What’s Working– Stories of Success

  • John Bowcut, IS/SFCN Director, Spanish Fork, UT
  • Bob Fifer, Mayor Pro Tem, Arvada, CO
  • Beth Huning, Chief Engineer, City of Mesa, AZ
  • David Littell, RIVCOconnect Manager, Riverside County, CA
  • Kimball Sekaquaptewa, Manager of Tribal Critical Infrastructure, Amerind Risk
  • Don Williams, Senior Program Specialist for Broadband at US Department of Commerce

1:04:48

 

 

Lunch and Keynote Conversation: Mesa, AZ Mayor John Giles and Representative Andy Biggs (R-AZ)

27:15

 

 

Breakout Session Two: Small Cells and Pole Attachments

  • Todd O’Boyle, Deputy Director, Next Century Cities
  • Michael Calabrese, Director, Wireless Future Program, New America, Open Technology Institute
  • Casey Lide, Partner, Law Firm of Baller, Stokes, and Lide
  • Courtney Schmidt, Executive Vice President, SureSite Consulting Group, LLC
  • David Young, ‎Fiber Infrastructure and Right of Way Manager, Lincoln, NE

58:43

 

 

Panel Three: Broadband Financing

  • Keith Adams, Assistant Administrator, RUS
  • Jordana Barton, Senior Advisor, Federal Reserve Bank of Dallas
  • Tom Coverick, Managing Director, KeyBanc Capital Markets
  • Tim Herwig, District Community Affairs Officer, Office of the Comptroller of the Currency
  • Aimee Meacham, Director, Broadband Services Program, NTIA

1:13:57

Tags: videoeventconferencenext century citiesfccmignon clyburnchristopher mitchelltribal landsinfrastructuredigital dividejory wolfdeb sociaspanish forkmesariversidefundingfederal fundingrusarizonatodd o' boylelincoln ne

Rural Electric Co-ops as Reluctant Warriors for Broadband - Community Broadband Bits Podcast 249

April 19, 2017

As we continue to cover the growing movement of rural electric cooperatives to bring high quality Internet networks to their members, we wanted to bring Alyssa Clemsen-Roberts back on the show. Alyssa was last on the show for episode 109 and has since moved from the Utilities Telecom Council to Pedernales Electric Co-op in Texas.

Though Pedernales is not considering a major broadband investment, Alyssa's insights from her years working with many electric utilities are valuable in understanding what electric co-ops have to consider before making a network investment. 

We start off by discussing the recent legislation in Tennessee that finally allows electric co-ops to offer Internet access before we move on to the real considerations a general manager has to examine before getting into telecom. We also talk quite a bit about the interplay between rural electric co-ops and telecommunications companies.

Read the transcript of the show.

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

This show is 32 minutes long and can be played on this page or via iTunes or the tool of your choice using this feed.

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

Thanks to Break the Bans for the music. The song is Escape and is licensed under a Creative Commons Attribution (3.0) license.

Tags: audiopodcastbroadband bitsruralelectriccooperativetelcosubsidiesfinancingloanfiber-to-the-farmpedernales electric co-optennesseepolicystate laws

Feasibility Study For Johnson City, TN

April 19, 2017

Johnson City Power Board (JCPB) in Tennessee began considering expanded uses for its fiber-optic infrastructure way back in 2009. After several stops and starts, the community is on track again, having just commissioned a Fiber and Wireless to the Premise (FTTP) Feasibility Study.

A Long Road

In 2009, when the municipal utility was installing fiber to substations they reviewed the idea of offering broadband to businesses and residents. Ultimately, they chose to focus on smart-grid development and save possible telecommunications offerings for some time in the future. 

This isn’t the first time the community of 63,000 has commissioned a feasibility study. In 2011, community leaders took the results from a study and decided a public-private partnership was the best route. The community is located between Bristol, Virginia, and Chattanooga, Tennessee - both communities with municipal fiber networks that have seen upticks in economic development. Competing for new businesses and retaining the ones they already could not have been easy while sandwiched between the two communities with high-quality connectivity.

In 2012, Johnson City announced that it would be working with the BVU Authority in Bristol as a partner. Now that the BVU system will likely be sold to a private provider, Johnson City is back to square one, but with considerable experience in its pocket. 

Asking For Input

As part if the study, JCPB has launched surveys on their website for residents and businesses; they’re also making the surveys available through the mail. JCPB is asking the community to complete the surveys before the end of June.

From the JCPB survey page:

Over 1,000 communities nationwide have undergone similar evaluation processes and benefited from the information obtained from these types of surveys.  Survey results have enabled key decision-makers within these municipalities to make more informed business decisions, which better benefit the entire community.  Today, advanced telecommunications services are as critical as electricity was 100 years ago.  Time and again, studies have proven that communities who actively embrace technology and plan ahead reap benefits for years to come.

Your participation in this survey is valued and appreciated.

Tags: johnson citytennesseefeasibilitybristol virginia utilitiessurveyeconomic developmentutility

Ports Of Lewiston And Clarkston Finally Correct Conduit Conundrum

April 18, 2017

By June, the networks in the Ports of Clarkson and Lewiston will at last be connected after months of negotiation, collaboration, and unraveling and old conduit mystery. 

Network Stalled By Conduit Question

Last summer, we reported how the two communities had each invested in publicly owned fiber Internet infrastructure with the plan to connect the networks at the Soothsay Bridge across the Snake River. An issue arose when rights to ownership arose regarding ownership and use of conduit on the bridge. CenturyLink controlled 20 conduits on the bridge that it obtained years ago as part of Pacific Northwest Bell. The provider was only using five of the conduit. The Ports had doubts about who actually owned the conduit and so the Port of Clarkson filed a Freedom of Information Act with the U.S. Army Corps of Engineers to determine the true owners. In the meantime, CenturyLink offered the Port of Clarkston use of one of the conduits for $0.

Soon, the parties involved discovered that there was no lease between CenturyLink and any of possible four jurisdictions involved - Nez Perce and Asotin counties or the cities of Lewiston and Clarkston, current co-owners of the bridge.

After unraveling the conduit ownership issue, reports the Lewiston Tribune, all five entities worked out an agreement to govern the conduit:

Those entities spent months negotiating, and in recent weeks elected officials from both counties and both cities signed off on an agreement. It makes the city of Lewiston’s Public Works Department the primary point of contact for CenturyLink and allows any one of the bridge owners to veto a lease or sale of the conduit. CenturyLink is not required to pay to be on the bridge.

Moving On

Now that the point of connection between the two networks is settled, the two Ports have completed an agreement to authorize the Port of Lewiston as the entity to head up installation of conduit on the Southway Bridge.

Both networks offer dark fiber connectivity to local community anchor institutions (CAIs), ISPs, and a few businesses. In addition to dark fiber networks in Lewiston and Clarkston, the Port of Whitman County has owned and operated a similar endeavor for over ten years. The three networks connect to form a loop for redundant connectivity throughout the region spanning the border between the ports in northwest Idaho and southeast Washington.

Tags: port of lewistonport of clarkstonidahowashingtonbridgeconduitcenturylinkpartnershipanchor institutionsdark fiber

Net Inclusion 2017 Coming May 16-17

April 18, 2017

Net Inclusion 2017 from the National Digital Inclusion Alliance (NDIA) and hosted by the St. Paul Public Library is less than a month away. The event will be on May 16 - 17 in Minnesota and early bird registration prices are available to April 20th.

From the event website:

Participants will discuss current and potential local, state and federal policies and policy innovations that could increase digital equity, current and potential sources of financial and programmatic support of digital inclusion programs, and share digital inclusion best practices and new strategies from across the USA.

Maya Wiley, Senior Vice President for Social Justice and the Henry Cohen Professor of Urban Policy and Management at the New School will present the Keynote address. Read more about her work here.

The event will start on Tuesday, May 16th, with tours of local inclusion programs and lunch at the historic James J. Hill Center. Participants will then move to the St. Paul Central Library and City Hall for the Break-out Sessions. The Charles Benton Digital Equity Champion Award will be presented on Wednesday along with some other special discussions on local government investment and the digital divide.

Christopher will be speaking on Tuesday at the 2:45 p.m. “Statehouse strategies: State-level digital inclusion advocacy and programs” panel. Other familiar speakers include:

  • Chris Lewis, Public Knowlege
  • Joanne Hovis, CTC
  • Laura Breeden, NDIA
  • Nicol Turner-Lee, Brookings Institution
  • Bernadine Joselyn, Blandin Foundation
  • Matt Wood, FreePress

…and many others.

In addition to speakers from national organizations, the agenda includes quite a few participants from St. Paul and Minnesota groups working toward digital literacy and finding ways to bridge the digital divide.

Break-out sessions discuss a range of issues, including legislation and policy, network neutrality, new technologies to assiste with digital inclusion, wireless advancements, the nuts and bolts of digital inclustion programs, and much more. View a list of all the break-out sessions.

Register online here.

Tags: national digital inclusion alliancest. paulminnesotaeventchristopher mitchelldigital divide

Community Broadband Media Roundup - April 17

April 17, 2017

California

Bridging the digital divide is imperative for economic prosperity by Barbara O'Connor, The Sacramento Bee

 

Idaho

Why does broadband even matter? by Josh McDonald, Shoshone News Press

 

Minnesota

World-class medical community needs world-class broadband by Mike Schlasner, Rochester Post-Bulletin

Let's double down on what works: Border to Border Broadband Fund creates connectivity by Matt Schmit, MinnPost

To date, the argument for better broadband in Minnesota has focused on (1) the imperative for ubiquitous access for all homes and businesses, (2) the benefits of widespread use in applications ranging from e-commerce and distance learning to telehealth and precision agriculture, and (3) economic growth, opportunity, and competitiveness in every corner of the state.

Broadband remains the greatest of equalizers for economic opportunity, competitiveness, and quality of life in Greater Minnesota.

 

New York

State must help safeguard personal privacy by The Daily Gazette Editorial Board

 

Ohio

State laws allowed AT&T to exclude Cleveland's poorest neighborhoods from high-speed Internet service by Eric Sandy, Cleveland Scene

 

Pennsylvania

Podcast explores LanCity Connect, Lancaster's fiber-optic broadband network by Tim Stuhldreher, Lancaster Online [Subscription Required]

 

Tennessee

Tennessee could give taxpayers America's fastest Internet for free, but it will give Comcast and AT&T $45 million instead by Jason Koebler, Motherboard Vice

Rural broadband bill to go to Gov. Haslam's desk by WBBJ 7 Eyewitness News Staff

Tennessee gives AT&T, Comcast millions in new taxpayer subsidies, yet banned a city-owned ISP from expanding broadband without taxpayer aid by Karl Bode, TechDirt

Residents in rural Chattanooga almost had 10 Gbps Internet until the State stepped in by Cal Jeffrey, TechSpot

 

Vermont

Burlington Telecom did not fail by Abbie Tykocki, New Hampshire Union Leader

 

Virginia

Negotiations underway for broadband service in rural Virginia by Charles Booth, Bluefield Daily Telegraph

Congress sides with broadband providers on customers' browsing history by Dan Casey, The Roanoke Times

 

West Virginia

WV broadband bill nears finish line by Eric Eyre, West Virginia Gazette Mail

The Senate voted 31-1 Friday to pass a bill (HB 3093) that allows up to 20 families or businesses to form nonprofit co-ops that provide broadband service in areas shunned by internet providers. The legislation also authorizes up to three cities or counties to band together and build broadband networks.

The bill’s supporters predict increased competition will lead to faster internet speeds and lower prices for consumers.

Broadband expansion bill heads to Governor's desk by Liz McCormick, West Virginia Public Broadcasting

Young people group "excited" about broadband bill by Alex Thomas, West Virginia Metro News

Broadband expansion is key to economic development by The Exponent Telegram Editorial Board

 

General

FCC chair wants to replace net neutrality with "voluntary" commitments by Jon Brodkin, ArsTechnica

Broadband report: Prohibitive state rules run counter to popular opinion by Jason Shueh, StateScoop

Poll findings reflect a disconnect between public opinion and the lobbying efforts of large internet service providers like Comcast, AT&T and Time Warner Cable. Many have tried to limit competition by creating regulatory requirements that hinder smaller companies from entering the marketplace, according to the broadband advocacy group Next Century Cities.

Such obstacles notwithstanding, the faith in city leadership may be well-placed considering analyst expectations that the federal government will do little to ensure broadband competition under President Trump's leadership.

How to keep the government from breaking the Internet by Elizabeth Woyke, MIT Technology Review

70% support letting cities build their own broadband networks, so why are we still passing state laws banning it? by Karl Bode, TechDirt

Only in the USA: ISPs get tax dollars to build weak broadband by Caroline Craig, InfoWorld

Cities take proactive approaches to anti-muni broadband legislators by Craig Settles, Government Technology

Image of the Highlander bull courtesy of FrankWinkler via pixaby.

Tags: media roundup

A String of Municipal Network Ideas: Traverse City Mulls Options

April 17, 2017

The Cherry Capital of the World, Traverse City, Michigan, continues to weigh its options to improve high-speed Internet service. The city of 12,000 homes and businesses has the results of a feasibility study and is carefully eliminating options as they look for the one that best suits their needs.

Most Likely Possibilities

Local newspapers, the Traverse Ticker and the Record Eagle, have followed the planning process. In late 2015, the city utility Traverse City Light and Power (TCL&P) began developing ideas on how to bring better connectivity to residents and businesses. The possibilities ran the gamut from an open access network to a public private partnership (PPP), and different groups within the community advocated for each option.

In February 2017, the community received the results of a feasibility study, which detailed two main options: operating the network as a city utility or leasing the network to a single private provider. Both options assume about two years for construction and an initial customer base of around 2,900 homes and businesses. The proposed prices are $25 per month for phone service, about $50 per month for 100 Megabits per second (Mbps) Internet access, and about $80 per month for a gigabit (1,000 Mbps) Internet access.

What About Open Access?

Local tech enthusiast group TCNewTech, however, pressed the city to also consider an open access approach, where multiple private providers share use of the infrastructure. TCNewTech member Russell Schindler explained to the Traverse Ticker that he supports public ownership of the network, but his focus is on increasing competition: 

“I’d prefer to see Light & Power maintain the infrastructure and not be an ISP themselves. We’re going to advocate for as many providers as possible.”

TCL&P directed their group of consultants to further consider this possibility and report back on their findings. At a meeting on April 11th, the consultants recommended against an open access network. They described a scenario where the first provider to begin operating on the network would likely take the majority of the customers, preventing later providers from finding business. 

TCL&P will now go back to its main options or do nothing: operate the network as a city utility or work with a single private provider. Traverse City may also collaborate with the local electric cooperative to improve local connectivity.

A City Run Network

If Traverse City chooses to own and operate a citywide Fiber-to-the-Home (FTTH) network, the project will cost just over $16 million, funded through a 20-year bond. Community leaders are considering a revenue bond, but have yet to make the final decision. The network will pay for itself, i.e. “break even”, by the 11th year of operation. Tim Arends, TCL&P Executive Director, told the Record-Eagle that they are also searching for state grant funding to alleviate some deployment costs. 

Under this plan, Traverse City would offer phone and Internet service, but not video. The community received advice to skip video offerings from Chattanooga, Tennessee

At a population of 170,000, Chattanooga is more than 10 times the size of Traverse City, but home to one of the most well-known municipal networks in the country. It was also the first network to offer citywide gigabit connectivity in 2010. We describe how the network touches everything from traffic lights to people’s houses in our report Broadband at the Speed of Light.

Smaller communities, however, also run their own networks. On the other side of Michigan, the village of Sebewaing built a citywide FTTH network in 2014 to serve the small population of 1,800. Communities more comparable in population to Traverse City include Auburn, Indiana, and Tullahoma, Tennessee. Both have been featured on the Community Broadband Bits Podcast, episode 77 and episode 54.

At least one city commissioner is in favor of the city providing the Internet service directly. Tim Werner, city commissioner and a TCL&P board member, told the Record-Eagle

"If we as the city take that on as the service provider, from what I've seen so far, that's the best opportunity to provide the lowest-cost services to customers."

Finding A Private Partner

The city commission wants to further explore the second option - having a private provider run the network.

If the city expands the network and finds a private provider to operate it, the city’s cost for the project will drop to about $10 million. The city would also “break even” in the second year of the network’s operation. The hiccup in this approach is finding a private provider to lease the network and take on the operational risk of running it.

A nearby private provider, called LightSpeed, has had some discussions with TCL&P over the possibility of installing a separate fiber network, completely owned and operated by LightSpeed. The company and TCL&P have talked about developing conduit and pole attachment agreements, but Traverse City is focused on owning the infrastructure.

The PPP approach has been tried in a few other cities. For instance, Lancaster, Pennsylvania, is working with local provider MAW Communications. MAW communications will own the fiber, but the city will help everyone gets connected. Listen to Community Broadband Bits Podcast Episode 248 for more on their approach.

The city of Indianola, Indiana, also works with a local private provider, Mahaska Communications, to build the connection from the city-owned fiber backbone to homes. The partnership started after Indianola had built a fiber ring that connected businesses and community anchor institutions, such as schools and libraries. Unlike Lancaster, the city owns the fiber and the private provider only operates on the network.

PPPs come in many different sizes and may not be right for every community. If a community chooses to explore such an approach, it's important they protect their interests. Typically, finding a trusted partner willing to enter into an agreement in which both parties share the risks and revenues is a good place to start. Check out the report Successful Strategies Behind Broadband Public-Private Partnerships by Christopher Mitchell and Patrick Lucey for more on finding the best fit for the community. 

For Traverse City, the option described in the feasibility study is for the city to own and maintain the fiber network itself while the private provider simply provides the Internet, phone, and possible video services.

What About The Local Electric Cooperative?

Another possible partner is the local electric cooperative that operates in the rural area surrounding Traverse City. Cherryland Electric, part of the Wolverine Power Cooperative, is also installing fiber throughout its service area. TCL&P and Cherryland Electric have already collaborated on other projects in the past.

Cherryland Electric wants to connect its electrical substations via fiber over the next few years and then determine how to expand that connectivity to residents. The cooperative explained on their blog:

“Our plan is to start slowly with a multi-pronged fiber strategy. The first step is to begin exploring a partnership with Traverse City Light and Power in the Traverse City area. Can we reduce our risk, learn valuable lessons and then expand into the more rural areas? We will begin this process very soon.”

What’s A City To Do?

With so many options, Traverse City has to continue to narrow down the field. We spoke with Scott Menhart, TCL&P Technical Director, to confirm details and learn about the community’s response. 

Menhart noted that TCL&P has owned and operated the current fiber for more than ten years. During that time, they have leased excess fiber to a number of schools and hospitals, and recently they worked with the Downtown Authority to create a free Wi-Fi zone for residents and visitors. Extending the fiber connectivity to the residents only makes sense.

Fun Fact: Traverse City won the #2017StrongestTown competition for being not only a great place to live, but also having a community active in local issues.

Photo of Sunrise on the Lake - Traverse City by Bryan Casteel [CC BY 3.0], via Wikimedia Commons

Tags: traverse city mimichiganconsiderationfeasibilityFTTHpartnershiputilityopen accesscooperative

RS Fiber On NPR's "The Call-In"

April 15, 2017

RS Fiber Cooperative, serving communities in central Minnesota, has received attention and awards for a collaborative approach to improve local connectivity. The project is bringing better Internet access to farms, businesses, and residents in rural Minnesota that had little chance of ever getting better service from the national providers.

In a recent edition of National Public Radio’s The Call-In: Rural Life, Winthrop economic development director Mark Erickson, who was one of the champions of the project, talks with series host Lourdes Garcia-Navarro about what better connectivity means for rural areas.

Remember to check out our extensive coverage of the RS Fiber Cooperative, including our 2016 report, RS Fiber: Fertile Fields for New Rural Internet Cooperative.

Erickson’s interview begins at around 4:20. Transcripts for the show are available here.

Tags: rs fiber coopaudioradioruralinterviewminnesota

TN Broadband Bill Hits Local And National Media

April 14, 2017

When state legislators in Tennessee recently passed the Broadband Accessibility Act of 2017, tech writers quoted our Christopher Mitchell, who pointed out that the proposal has some serious pitfalls.

Christopher's statement appeared in several articles:

"Tennessee taxpayers may subsidize AT&T to build DSL service to Chattanooga's [rural] neighbors rather than letting the Gig City [Chattanooga] expand its fiber at no cost to taxpayers. Tennessee will literally be paying AT&T to provide a service 1,000 times slower than what Chattanooga could provide without subsidies."

Motherboard

Motherboard noted that the Tennessee legislature had the opportunity to pass a bill, sponsored by Senator Janice Bowling, to grant municipal electric utilities the ability to expand and serve nearby communities. Nope. Legislators in Tennessee would rather pander to the incumbent providers that come through year after year with generous campaign contributions:

To be clear: EPB wanted to build out its gigabit fiber network to many of these same communities using money it has on hand or private loans at no cost to taxpayers. It would then charge individual residents for Internet service. Instead, Tennessee taxpayers will give $45 million in tax breaks and grants to giant companies just to get basic infrastructure built. They will then get the opportunity to pay these companies more money for worse Internet than they would have gotten under EPB's proposal.

The Motherboard reporter quoted Bowling from a prior article (because, like the movie "Groundhog Day," she keeps finding herself in the same situation year after year):

"What we have right now is not the free market, it's regulations protecting giant corporations, which is the exact definition of crony capitalism," she said.

TechDirt Gets Personal

Karl Bode from TechDirt, in his usual pull-no-punches style, described the Tennessee legislature as “pay-to-play.” Bode reminds readers that Tennessee’s own Department of Economic and Community Development determined in 2016 that the state of connectivity in rural areas is just plain dire. Why?

If you want to understand what's wrong with the American broadband industry, you need look no further than Tennessee. The state is consistently ranked as one of the least connected, least competitive broadband markets in the country, thanks in large part to Comcast and AT&T's stranglehold over politicians like Marsha Blackburn. Lawmakers like Blackburn have let Comcast and AT&T lobbyists quite literally write protectionist state laws for the better part of a decade with an unwavering, singular focus: protecting incumbent revenues from competition and market evolution.

TechSpot

TechSpot looked beyond Tennessee at the big picture:

While this may seem to be a localized problem for Chattanooga, it can be applied across the country. Think about how many Internet providers that you have in your area. Do you think your lack of options is by accident?

Internet providers have long held customers between a rock and a hard place. Most of the time they overcharge for unreliable service with bloated bundles and poor customer service. They can get away with this not only because they have limited competition, but because lawmakers have their backs with restrictive regulatory demands.

InfoWorld

InfoWorld included coverage of the recent Pew Research survey that revealed overwhelming support for local telecommunications authority. They show the irony behind the fact that so many support Internet access from municipal networks, but Tennessee elected officials would rather stop munis at the gate and fork over millions of taxpayer funds for inferior service.

 

 

Local Coverage, WBBJ

Jackson, Tennessee, is home to the Jackson Energy Authority (JEA), which offers gigabit connectivity via its Fiber-to-the-Home (FTTH) municipal network. The local news WBBJ ran a story about the bill and featured ILSR’s criticism of the approach. Our preemption fact sheet makes a small cameo.  

 

Tags: christopher mitchellinstitute for local self-reliancetennesseelegislationkarl bodemediasubsidieslobbyingmunichattanoogaEPBat&t

Transcript: Community Broadband Bits Episode 248

April 14, 2017

This is the transcript for Community Broadband Bits Episode 248. Brian Kelly of MAW Communications and Patrick Hopkins of Lancaster, Pennsylvania, join the show to discuss how the city and MAW are collaborating in a public-private partnership. Listen to this episode here.

Brian Kelly: Each of the communities that invests in Community Broadband Solutions is going to be slightly different. It's going to be about negotiating those very specific local conditions that will make the project successful.

Lisa Gonzalez: This is episode 248 of the Community Broadband Bits podcast from the Institute for Local Self-Reliance. I'm Lisa Gonzalez. In March, we shared the news about Lancaster, Pennsylvania's, public private partnership with MAW Communications on MuniNetworks.org. This week, Christopher interviews Patrick Hopkins, Business Administrator for the city, and Brian Kelly, Operations Director at MAW Communications. In the interview, you'll hear about the long and detailed planning for the Fiber to the Home project. You'll also hear about how both the city and this local provider found some ways to overcome specific challenges relating to the project. They each explain what drew them to this approach and some of the added benefits of Fiber to the Home in Lancaster. Check out the project website at LanCity Connect and learn about MAW Communications at MAWcom.com. Now here's Patrick Hopkins and Brian Kelly talking with Christopher about the LanCity city Connect project.

Christopher Mitchell: Welcome to another edition of the Community Broadband Bits podcast. I'm Chris Mitchell, and today I'm speaking with Patrick Hopkins, the Business Administrator for the City of Lancaster. Welcome to the show.

Patrick Hopkins: Thank you for having us.

Christopher Mitchell: And we also have Brian Kelly, the Operations Director at MAW Communications, a small private company that serves the region. Welcome to the show.

Brian Kelly: Thanks so much for having us.

Christopher Mitchell: So, Patrick, I thought I'd ask you first to just give us a short version of what's happening in Lancaster with this arrangement.

Patrick Hopkins: Sure. Well, we're excited to finally, I'll say -- and I'm sure we'll get into some of the history on this -- but working with MAW Communications on a community fiber broadband system call LanCity Connect. We're actually beginning the roll out of residential connections, Fiber to the Home connections beginning, I believe, at the beginning of May. Those are being scheduled right now. We've been undergoing a beta testing program since about early November, I believe it is, with about 60 customers. We've gotten MAW, LanCity connect has gotten great feedback from those customers, and we're excited to get this thing rolling.

Christopher Mitchell: Wonderful. And Brian, do you have anything to add in terms of a short overview of what we're going to be talking about here?

Brian Kelly: No, I think Patrick summed it up. It's a really exciting time with the launch of LanCity Connect and the possibilities and the buzz that's happening locally around this has been really encouraging. These folks are really interested in being part of a local broadband solution.

Christopher Mitchell: I want to paint a little picture for our listeners that haven't been out there as I told you, Patrick, I played my first soccer tournament in Lancaster growing up in the Lehigh Valley. So, for people that haven't been there, what's Lancaster like?

Patrick Hopkins: The city of Lancaster -- we've got a population of about 60,000, very compact. We're officially about 7.4 square miles, so 60,000 people in that small area, but actually most, probably 95% of the residents are within about a four square mile area. Nice, compact, very urban city just in terms of, again, about 90% of our homes are row homes or just barely disconnected homes. We'll probably talk about it later but it's a real advantage when we're talking about rolling out fiber backbone across the city, but we're about 75 miles west of Philadelphia. Lancaster County itself has a population of about 530,000. So, the city is about 10% of the total population of the county. We're surrounded by, I guess, a metro area of about, probably, 150, 175 thousand. But the city itself is 60,000 people

Christopher Mitchell: And aside from MAW, you have, I presume, cable and DSL service?

Patrick Hopkins: Yes, we do.

Christopher Mitchell: Okay, I always like to establish that because sometimes people assume communities that are engaging in either their own investment or partnerships, have nothing. But you already have something. You're looking for something better, I would guess.

Patrick Hopkins: Yes, that is Correct.

Christopher Mitchell: Let's turn to Brian and learn a little bit about -- What's MAW's background?

Brian Kelly: So, MAW Communications is in it's 19th year of business. We're a registered Pennsylvania public utility here in the state of Pennsylvania, and for most of the beginning of our existence, we focused on larger institutional clients, governmental healthcare, education, larger enterprises with multiple locations that needed to be connected. So, this emerging partnership with the city is an expansion of that core broadband service, and looking into the expansion to residential services.

Christopher Mitchell: So is serving a lot of homes and even smaller businesses something that's kind of new to you then?

Brian Kelly: Yes, for MAW communications that's part of what the whole partnership with the city of Lancaster has been is actually scaling up that component of the partnership.

Christopher Mitchell: Well, let's talk a little bit about how that partnership began. Patrick, can you give us a little bit of background?

Patrick Hopkins: We've been talking with MAW communications for probably about ten years. I think probably our first conversation with Frank Wiczkowski as the president of MAW Communications dates back to sometime in 2006 or early 2007. So, we've had sort of on and off again conversations about various fiber possibilities, anything from providing public Wi-Fi in public spaces in public parks, and then sort of over a period of years as the city got some things in order both financially and operationally, more recently those conversations turned to doing a fiber broadband throughout the city, and really what we're doing is leveraging some investment that we knew to make anyway in an automatic meter reading system. We also provide water services to the city of Lancaster and the surrounding suburban area. So, we had some other investment that we were looking to do in terms of interconnection of traffic signals and this automatic meter reading system. That conversation continued to grow into what's now the creation of LanCity Connect, sort of a bit of an offshoot of some of this other fiber infrastructure that we talked about.

Christopher Mitchell: And Brian, I would love to hear if there's any other details about the working together with the city, how it came to be, that you would like to contribute.

Brian Kelly: Yeah, the partnership has been going well, and as Patrick mentioned it's really been evolving over time. One of the things that is really nice about this is that there's multiple needs that are being met through this, and that is one of the things MAW really likes to pride itself on is stop looking at "Oh, so we're looking at the automated meter infrastructure, we're looking at the traffic signals, we're looking at potentially Wi-Fi hotspots." All of this integration and then looking at, "Oh, well once we're already investing there, there's really only marginal additional cost in connecting residents, how can we get the most bang for our buck, if you will, in this infrastructure investment." So, we've been really pleased with being able to work with the city in helping to develop this.

Christopher Mitchell: Brian, I'm curious if you just can say a few words about what it's like to be working with the city, perhaps pros and cons. I'm sure that no one's going to pretend anything is all easy. But the reason I ask is, a lot of telecommunications carriers, the larger ones especially, some of the smaller ones, are reluctant or prefer not to work with cities, and I'm just curious if you can tell us why you thought it might be a good idea to and how that's working out.

Brian Kelly: Yeah, there's definitely pros and cons to that type of relationship, and I think one of MAW's reasons for entering into an arrangement like this is more of our ethic, which is we're not interested in being what we consider a jack, just another carrier. We are interested in what is the innovation in this industry and what is the added value to the communities in which we operate. So we're based in Pennsylvania, we're going to be specifically in Southeastern Pennsylvania, and our focus is on trying to make sure that we have as much added value as possible. And, so, working with the city to solve it's multiple dilemmas is an engineer's dream. We like to consider ourselves problem solvers. The problem that we're solving is often figuring out how to get data moving from one point to another, but a much bigger way, especially in the information age. We're excited about this process of how that is really moving society forward. In terms of working with cities, I think one of the really great ways that I've seen that the city of Lancaster -- They're actually together as a unit moving something forward. So, I've worked in a couple of other cities outside of my relationship with MAW, and oftentimes with the municipalities, you can see a lot of discord internally and kind of competing policy objectives. So, one thing that's been nice about partnership with the city of Lancaster is they've been very clear about some of their basic ethics and policy principles in how we're rolling out LanCity and what they wanted to achieve, and that's been really refreshing on our end. I think some of the difficulties is, because it's a larger bureaucracy and those tend to be slower to change, then sometimes we want to move faster than the bureaucracy is ready to move, or as we dig a little bit deeper that means that the exact output is going to change over time. So, that's one of the kind of pluses and minuses is this evolving project.

Christopher Mitchell: That strikes a cord with what I've seen both from providers in cities, and Patrick I'm curious if you can perhaps comment on two aspects of that. The first is having a comprehensive vision in the sense of where you want to go, and the second would be, once you've had it, communicating it and sticking to it. Can you tell us anything about how the city's accomplished this?

Patrick Hopkins: Neither of them have come about easily, that's for sure. I think part of the thing that we benefit from is that Mayor Gray is our current Mayor has been in office since 2006 and really, we did start these conversations with MAW not too long after he took office. I came in at the same time, our public works director had actually been with the city of Lancaster earlier, the Mayor's Chief of Staff came in when Mayor Gray come into office, and over that time as I described the relationship we built with MAW over time, we also saw some of the things that Brian saw in terms of some of the new opportunities that we had, new challenges that we had, to try to tie together -- we've got multiple city of Lancaster locations in the city, we've got traffic signals all over the place, we have about 110 miles of city streets. We have a lot of signalized intersections. We have a county government who's main operation is about three blocks away from us, and we actually have a Shared Services agreement with them for file serving and our ERP system is actually located there. So we have some interconnection with the county government that's also part of this. So, over that 10 to 12 year period, it's been an evolving project, and sort of breaking down some of the silos that existed when the mayor came into office in 2006, that's frankly part of why this has taken so long. And then, the community outreach part has been much more recent, the external part of this project has been much more recent. But we've been able to keep our city council apprised all the way through the project, try to provide as much transparency in the project itself to city council and to the extent possible, also, to the public. We've built up the momentum for what has ultimately become LanCity Connect, but even the term LanCity Connect, I think, is what, Brian, about nine months old, something like that? So, nine --

Brian Kelly: Yep, that's right about nine --

Patrick Hopkins: -- months out of a ten year project.

Christopher Mitchell: Since we're just touching on some of the benefits that are coming from this, I'm wondering if you can share some of the cost savings that you've already seen and are expecting from this, and also, I just wonder how much of this would come from not just the presence of fiber that you have access to, but also from the engineering benefits that you're getting from working with MAW?

Patrick Hopkins: Obviously we have our own Internet services right now that we would have a savings that I think we're talking in total among a couple of different buildings about $35 or $40 thousand dollars a year. That's an easy one to put a number to. The more complicated stuff to put a number to is things like the interconnection of our traffic signal system. We have some interconnect with our traffic signal system now, but not nearly the benefit that we'll have out of the fiber interconnection. So, there's not necessarily a direct cost savings that I can say, "We're going to reduce cost by X," but we know that we'll be able to operate more efficiently provide better service to folks who were driving through the city, and there's a lot of them. On the AMR system, the Automatic Meter Reading system, -- Right now read our water meters for residential properties once every three months. With this AMR system, and the speed and reliability that we'll have out of the fiber interconnection, we'll be able to read meters literally by 10 or 15 times a day if we need to which means we can provide better service to customers because we can detect leaks at their property that they might not know about. So, some of this is a dollar savings, but also a lot of it is really just an improvement of services that we're going to be able to provide. So, to the extent that that, not necessarily, saves the city government a lot of money, but it can save residents an awful lot of money and heartache. The other piece of this is that we have, unlike a lot of municipalities, we have a camera system that's operated by a non profit organization that operates in the city. They have about 165 security cameras throughout the city. Part of this project has been helping to upgrade the fiber infrastructure that they have so that ultimately we can flip those cameras over to operating off of the fiber back that's been installed by MAW, and that's before we even get into the LanCity's Connect services. So, we expect with the Internet service savings, some of the staff savings that we'll have from the AMR system and others that we're going to see annual savings of probably $150 to $200 thousand dollars a year, and again, that doesn't count some of these other operational savings and efficiencies that we're going to gain.

Christopher Mitchell: Brian, do you have anything to add to that?

Brian Kelly: I think the other part of your question, though, was around the engineering component, and I think from MAW's perspective, I think that's been the most fascinating part of this is we're systems integrators in a way, and so all of these different things that Patrick just talked about could all be analyzed separately and there could be some solutions for reducing costs or improving operations, but then once we started integrating them all into one comprehensive system and looking at distributing information through a passive optical network, then it opened up new possibilities around that. So, I think that was one of the exciting things about working on this project with the city was getting to lump all of these together, and could we actually create a scaled solution.

Christopher Mitchell: So I think with some of the little bit of time we have left, I would like to just get a sense of the Fiber to the Home plan. How is it working? Let's just start with Patrick and just give us a thumbnail sketch of the moving parts, please.

Patrick Hopkins: In about, I believe, the beginning of November or so began the LanCity Connect beta program which was a connection of about 55 or 60 residential properties throughout the city. Part of it was just a proof of concept to make sure that the network speeds, the traffic, and everything was operating the way that MAW designed it -- And they ran into some hiccups along the way and some corrections that needed to be made with each of the residents who have been connected through the beta program, they've done surveys throughout. So, I think somewhere in the neighborhood of probably ten to a dozen surveys along the way for folks to test their wired speeds, their wireless speeds, and a number of other things throughout, including the customer service level of the folks who came out to make the Fiber to the Home connection to the exterior of the property, folks who came inside the property to get the fiber inside, connect the modem, and get the router and everything set up. So, through that process everybody has learned some things, and part of that was not just figuring out the networking piece and making sure that the speeds that everybody expected to be there were there, But also how best to do the installations. We've got, as I described earlier, a very compact city. We've got a lot of row homes. It makes the bang for the buck in terms of a mile of fiber goes a long way in the city of Lancaster to connect to a lot of properties, but it's also not the easiest thing in the world to work around row home properties and figuring out which is the best way to get into the property with the fiber. So, there are a lot of lessons learned throughout the last four months, I guess, and now we're at the point where MAW is scheduling LanCity Connect, is scheduling the first phase of the residential connections in two areas of the city. We've got to phase this project along. The timing of the phases is really based on the capability that will be there with LanCity Connect installation crews to roll this out throughout the city. We would love to have lit up everybody at the same time, but as you're running fiber connections to several thousand properties, that just wasn't the case. So, we have some folks who have been chomping at the bit for, I'd say, a couple of years, really since we first announced this project. They're all ready to go, and they're in phase one. Other folks are going to have to wait a little while, but I think as this starts to roll out and we get some word of mouth on the street for people who have been connected with LanCity Connect that the momentum of this will keep on growing.

Christopher Mitchell: Well, I have no doubt, because when I look at the pricing sheet, you're looking at $35 a month for 50 megabits, $50 a month for 150 megabits -- It's pretty remarkable pricing. Brian, I guess as we're talking about money, one of the things I'm curious about is, the cost of building a network like this, you're getting a loan from the city that you'll be paying back over a period of time with revenue from the network, but I presume you also have to bring in some of your own money as part of that.

Brian Kelly: Oh, most definitely. We already have several hundred thousand dollars invested in the scaling up here, and you bring up an interesting point which is that the economics of residential Fiber to the Home installations is -- it's not super promising, there's not a whole lot of people diving in because of the profit margins that can be made in that particular industry. One of the ways that this was made cost effective was because of the investment that the city was already making in a substantial amount of the fiber and then we were able to work off of that core backbone. So, that was a critical element in the success of this rollout. I think one of the other things, as Patrick mentioned, we're launching at a pretty aggressive rate, and so we're hoping to sign up about 3000 customers over the next 18 months, which is -- we consider ambitious but definitely achievable. So, we had a lot of folks who wanted to sign up, like Patrick said. We asked folks, "Well, what day would you like?". They said, "Well, the first day of installation at 8 a.m. I really want to be the first in the city to be connected." There was over 50 requests for that same day. We're like, "Well, that's not possible, but we are going, going to be lighting them up.

Patrick Hopkins: That's a problem of physics that even MAW can't overcome.

Brian Kelly: Exactly.

Christopher Mitchell: So, I just wanted to know -- We have an article on the website that we entitled Public Private Partnership Pursued in Pennsylvania. So if anyone wants to put a bunch of P's into Google or go to the --

Brian Kelly: I liked the alliteration. That was nice.

Christopher Mitchell: But we have more of the details the financing spelled out there. But I wanted to end with a question just in terms of how both of you are seeing it. From the perspective of my organization, we're always concerned in public private partnerships where we might see a situation in which the public gets invested, and then the partner ends up changing hands, being purchased by a larger company or somehow not maintaining that original great service that was promised, and I'm just curious if maybe, Brian, you can start and give me a sense of why another community that might be looking at this model should trust MAW and then we'll turn to Patrick, I think, to just get a perspective of how you're thinking about this risk.

Brian Kelly: Sure, so for other communities outside of Pennsylvania, they can make a decision to trust MAW or not, but we won't really be partnering with them, so we'll be staying in Pennsylvania. So, anyone who's in Pennsylvania and wants to contact MAW, that's a different story. Part of it is our company ethics. Right? So, the city was very clear on some of its initial policy priorities, making sure that as we continue to grow, we were going to be doing local contracting with firms in Lancaster, and then also as we've scaled up creating full-time, living wage jobs for residents in the city of Lancaster. So that's all part of their ethics and something that we consider as a local company something that's important to us as well. So, any economy is based on the interaction of all those local actors, and so, that was a really important piece, and then Patrick and the city of Lancaster in doing their due diligence was making sure that whoa, asking those exact questions that you asked. How do we know that we can trust MAW? Even though these guys seem like nice guys, lets make sure in these agreements that nothing can happen. And so there's a lot of language in the loan agreements and then also in the public private partnership that gives the city that leverage of making sure that MAW can actually turn around and walk away from the city and say, "Oh, that was a nice buy," we're looking at it as kind of this long term partnership that's being developed. But I think that, especially for anyone listening to this podcast, especially folks on the municipal side of things, those are really important questions to ask is, where is this company going? Are they just starting up? Is this a one or two year company? In which case you really want to do some serious vetting about capacity and their ability to stick around. In our case, we've been around for 18 years, we were able to consistently show and deliver to the city our various milestones, which is where they developed that kind of confidence over time, and as Patrick said, this is a process in the making. So, it wasn't that one day they said, "Oh, let's do this. Oh, MAW, that's a nice shiny organization, let's partner." Over the course of the last few years we were consistently developing that relationship and seeing how this would develop.

Patrick Hopkins: No, I think Brian covered that really well. We operate under the adage of trust but verify. So, as Brian said, we've had, over that period of years, built up a relationship, understood the capabilities that MAW had on the technical side and the engineering side of all this. Frankly, it sort of comes down to getting language in agreements that, for instance, the first agreement that we had with MAW, simply has a clause that says that if any of the infrastructure that we build in this partnership, if MAW were to be sold, the services that we built with that infrastructure -- This agreement carries forward to the buyer of MAW. So, we had to build in protections there because anything can happen at any point and time. So, we had to make sure that our attorneys reviewed -- We have attorneys, not just our city solicitor, but folks who were involved on the telecommunications law review all of the agreements to make sure that we had protections in there for the city because for the city itself and our tax payers, we're making a significant investment in this infrastructure. So, we want to make sure that we're not going to be sitting here five years down the road or eight years down the road and having made all that infrastructure investment and then be stuck with a system that is operated by somebody that we don't have a good relationship with. And then we get to the loan documentation side -- We're providing the operating capital loan to MAW to sort of ramp up the LanCity Connect operation made sense to us because the collateral that we have on that loan is the fiber infrastructure itself. So, we sort of have things locked down so that at any point in this whole operation -- Let's say for whatever reason something happens that the operation is not successful, there's a loan that we've made to MAW but the city of Lancaster has the fiber infrastructure as collateral. So, we've got a good trusting relationship that we've built over a period of years, but we think we also have the good legal documentation to back that relationship up.

Christopher Mitchell: Great. Well, is there anything that either one of you would like to add as we just conclude the show?

Patrick Hopkins: Come back and check us out six months or twelve months down the road and see how we're doing. We hope that we've got a thousand or more residential connections made and that more of our residents see the benefit of this infrastructure investment.

Christopher Mitchell: And Brian?

Brian Kelly: One suggestion, especially for other communities that might me thinking about this, is that each of the communities that are invests in Community Broadband Solutions is going to be slightly different. So, I would just encourage folks to stay open to possibilities and not think that you can just grab a model from elsewhere and put it wholesale in your own community. It’s going to be about negotiating those very specific local conditions that will make the project successful.

Christopher Mitchell: Right, I would wholly endorse those comments. Well, thank you very much, both of you, for taking all the time today to speak with us.

Brian Kelly: Sure, thank you very much, I appreciate the opportunity.

Patrick Hopkins: Yeah, sure. Thanks for having us.

Christopher Mitchell: And I look forward to talking to you in maybe a years time, maybe on MAW Fiber itself. So, thank you very much.

Patrick Hopkins: Thank you.

Brian Kelly: Thanks you, sir. Bye-bye.

Lisa Gonzalez: That was Christopher talking with Patrick Hopkins, Business Administrator for the city of Lancaster, and Brian Kelly, Operations Director at MAW Communications.

Christopher Mitchell: Hey, everyone. I just wanted to thank you for listening and helping out to create a stronger Internet ecosystem, making sure everyone has high quality access. Please tell your friends, tell others who might be interested, about this show. If you have a chance to rate us on iTunes, please do. Several people already have. We really appreciate all the comments and we really appreciate you all of the comments, and we really appreciate you taking the time to listen to us.

Lisa Gonzalez: We have transcripts for this and other Community Broadband Bits podcasts available at MuniNetworks.org/BroadbandBits. Send us your ideas for the show. Shoot us note at podcast@MuniNetworks.org Follow Chris on Twitter. His handle is @CommunityNets. You can also follow muninetwork.org stories on twitter where the handle is @MuniNetworks Subscribe to this podcast and all the podcasts in the ILSR family on iTunes, Stitcher, or wherever else you get your podcasts. We want to thank Break the Bands for the song Escape Life licensed through Creative Commons, and we want to thank you for listening to episode 248 of the Community Broadband Bits podcast.

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