Tennessee State Senator Janice Bowling, a Republican from Tullahoma, has once again introduced legislation that would help bring high-quality connectivity to rural residents and businesses. The bill is not complicated and would allow municipal electric utilities that offer broadband connectivity to expand beyond their electric service area. In a video from 2015 Senator Bowling takes a few minutes to explain her proposal - to eliminate the restriction and allow places like Tullahoma, Chattanooga, and Clarksville to serve neighboring communities.
This year, the bill that eliminates the restriction is SB 1058 and its House companion is HB 0970 from Representative Dan Howell. For now, her bill is in the Senate Commerce and Labor Committee waiting to be heard. Sen. Bolling has also introduced similar bill that allows municipal electric utilities to offer telecommunications service with no geographical limitations.
Senator Bolling gets it. She understands that the people of her district and the rest of rural Tennessee need high-quality connectivity to keep pace with areas that already have such access. We’d like to see more legislators like her who put the needs of their constituents before the interests of the big cable and telephone companies.
In the video Senator Bolling describes why the bill, which she has introduced several times, has not passed. She explains what the bill does legally and practically, and she gives a frank assessment of what the situation is now in many rural areas of her state. Even though the video is from 2015, her comments are still relevant.
The video is short and to the point - only 4:20 - check it out and share.Tags: tennesseebarrierelectricmunilegislationvideostate lawslobbyingtullahomachattanoogaclarksvillelightTUBeEPB
Earlier this legislative session, we followed legislation in Virginia, which would have negatively impacted municipalities’ ability to use their publicly owned infrastructure to improve connectivity. We’re now watching a bill in Missouri that’s been resurrected from legislation that died last year. Another state bill just appeared on our radar in Georgia that interferes with local community authority by prescribing stringent rules on permitting and applications.
The Wrong Direction
When our Christopher saw it, he said:
This is based on the false notion that cities are the barrier to better networks rather than recognizing the power of pole owners and existing attachers as a far more significant barrier.
The bill, HB 336 or the Broadband Strategy for All of Georgia Act, allows communities to be certified as “broadband ready,” which may allow providers that serve those communities eligible for state tax incentives. In order for a community to be certified as a “broadband ready community,” it must comply with a specific model ordinance, created by the state that dictates the process for reviewing applications for broadband projects.
The bill starts out all wrong, by defining broadband as 10 Megabits per second (Mbps) download by 1 Mbps upload. Clearly that indicates that its point of origin is the incumbent telephone companies who want to make it easier to provide their slow DSL, rather than encourage upgrades to the FCC definition of “broadband.” As a reminder, the federal government considers broadband to be 25 Mbps / 3 Mbps.
The process proposed in HB 336 assumes that local communities that are trying to protect their public spaces are the bad guys and any DSL or cable company who wants to insert their lines or equipment in public space is but a poor victim. The bill applies to any “public rights of way, infrastructure and poles, river and bridge crossings, or any other physical assets owned or controlled by the political subdivision.”
The Heavy Hand Of The State
HB 336 caps application fees at $100, even though the cost of processing an application varies from place to place. This bill prevents municipalities and local governments from putting a stop to application approvals and permit issuances. If a community plans to issue a permit, they are not allowed to require the applicant to offer Internet access for municipal facilities as part of the approval or to ask for any payment beyond “cost based fees.” In short, the state is using HB 336 to strip local communities of any authority to control their own public spaces or processes in order to be certified as a "broadband ready community."
Waiting On The Floor
The bill passed through the House Energy, Utilities & Telecommunications Committee on February 21 and it’s now on the General Calendar waiting to be considered by the entire body. If you live in Georgia, now’s the time to contact your Representative and tell them that if the bill comes before them, they should vote it down. Rather than taking away local communities’ ability to control their own spaces, the state legislature should give them wide authority to do what they need to improve local connectivity.Tags: ga hb 336georgialegislationpermittingright-of-waypreemption
This is the transcript for episode 242 of the Community Broadband Bits podcast. Our Christopher Mitchell invites Professor Susan Crawford to reflect on her recent travels through North Carolina and Tennessee. Both states have restricted communities from building new municipal networks. Listen to this episode here.
Susan Crawford: It's much more about a very bipartisan, quite progressive group of people thinking about how to make life better in their communities, and that's terrific. That's truly American.
Lisa Gonzalez: This is episode 242 of the Community Broadband Bits podcast from the Institute for Local Self-Reliance. I'm Lisa Gonzalez. We're pleased to have Susan Crawford back on the show this week. She's a Professor of Law at Harvard Law School, but she's also served as Special Assistant to President Obama for science, technology and innovation policy. Susan's CV is too long for us to go through point by point. She's authored several publications, including The Responsive City: Engaging Communities Through Data-Smart Governance, and The Telecom Industry and Monopoly power in the New Gilded Age. She's been on the show before to talk with Christopher about access to high-quality connectivity, and it's always a pleasure to have her back. As it turns out, Susan has been on a walkabout of sorts, visiting local communities as she works on her current book, and in this discussion she shares her impressions with Christopher. She's got some ideas on how she feels are the most effective ways to bring better connectivity to the most people, especially in rural areas, and she and Christopher hash through her findings.
Christopher Mitchell: Hey, folks. This is Chris Mitchell, the host of Community Broadband Bits, and I just wanted to ask you if you could do us a real big favor to help us spread this show around. And that's to jump on iTunes or Stitch or wherever you found this show and to give us a rating. Give us a little review. Particularly if you like it. If you don't like it so much then maybe don't do that, but if you're enjoying the show please give us a rating and help us to build the audience a bit. Thanks!
Lisa Gonzalez: Now here are Christopher and Susan Crawford, author and professor of law at Harvard Law School.
Christopher Mitchell: Welcome to another edition of the Community Broadband Bits podcast! I'm Chris Mitchell with the Institute for Local Self-Reliance, and today I'm speaking with Susan Crawford once again, a Professor of Law at Harvard Law School. Welcome back to the show!
Susan Crawford: Hey, Christopher, thank you for having me on.
Christopher Mitchell: I've always enjoyed our conversations, and I've enjoyed your books, and I found an excuse to bring you back on absent another book. But I think you have a lot of interesting things to say about where all of your travels over many years have brought you, so maybe we can just lead in with a hint of what that would be.
Susan Crawford: Well, actually, Christopher, these travels are in service of a book, so I'm hoping to merger that book relatively soon. But what's happened is that, recently, after some wonderful trips to Wilson, North Carolina, and Greensboro, North Carolina, and Chattanooga, Tennessee, all places where you've been or that you've looked at. I think I'm beginning to understand how to talk to people about the importance of fiber optic, community-organized networks. And particularly the importance of wholesale street grid fiber networks. Here's how this works. I think. All the elements that a community needs to have in place in order to carry off the task of organizing to ensure alternative community overseen wholesale fiber, all those elements are in turn essential for communities to take on the next set of challenges, which are things like stubborn levels of poverty, difficulties with health outcomes, trying to integrate immigrants into a community. And communities that are doing this well are going to be models for the country because we have all of these problems as a country as well. And I think that in the end we're going to need the federal government to see this as a key industrial policy that, in turn, is essential for everything else that the country needs to be able to do. So it's not as much fiber as an end, in and of itself, although it's going to have plenty of great economic spillovers, but you can't talk about economic development without also talking about social justice. And the communities that are working on fiber networks really have those twin goals in mind, and it's leading them into many other well-organized and important conversations.
Christopher Mitchell: Well, I think that's a great overview. And I absolutely share where you want to go and it feels odd - ten years I've been spent on trying to help communities have great connectivity, and of course you're right. The goal is not just to have great connectivity, it's to do things with it. But I'd like to just push in on one particular word of what you mentioned. And I think this is something that you've long been an advocate for. The wholesale model. And it's worth pointing out that the more astute listeners that have been following this for a while might recognize that two of the three places you've just visited, Wilson and Chattanooga, they've done an incredible job of connecting their community. Of trying to make sure that no one's left behind, of focusing on business as well. But they're not wholesale networks, so I'm curious what makes wholesale so important to you.
Susan Crawford: It's extraordinarily important for the current political climate to be able to say that government is not directly competing with the private sector. But is instead facilitating all kinds of competition and economic growth or making available the equivalent of a street grid. Now, both Wilson and Chattanooga had preexisting electrical utilities and were already in the business of direct customer service. So they'd already passed over that hurdle. But for communities that are just starting to think about it, I think it's a much easier story to tell to stay out of direct competition with the private market. But instead make positive a thriving private market. It also helps with all kinds of other issues like, for example, people's increasing fears about surveillance and privacy and Internet of Things. If the government is able to collect and see everything about Internet usage, that sometimes triggers fears in people that are sort of unnecessary for this conversation. So, all in all, the thing that makes the most sense to me, and has made the most sense for telecommunications for 150 years, is to have a wholesale facility that can't be captured by any private entity but is instead overseen by the public and serves public interests broadly.
Christopher Mitchell: I'm so with you on that line of thinking and for those reasons. I would just add to it that you can also do incremental in a more easy fashion. And you also have much more ability, I think, if you're embracing that model, to hire people that would be good with it, and trying to track down the smaller universe of people that can build and run a triple-play type network. So I'm so much in agreement with you on that.
Susan Crawford: Well, thanks. I think that's right. And I think that, both as a matter of emotion and intellectual thought about these networks, it makes intuitive sense to people of all political stripes that the street is not controlled by any one private actor but instead makes possible all kind of commerce. So I am happy to see the developments in places like Rockport, Maine, and Idaho, I think San Francisco, that are thinking about leasing out their dark fiber assets or already have. And it seems to me like a really sensible move. And that's what I encountered in Greensboro. It's a very new story in Greensboro, North Carolina.
Christopher Mitchell: Well, do you want to tell us a little bit about it? I've been following it from afar, but I'd love to hear what you've learned.
Susan Crawford: Well, what was so wonderful about being there a couple weeks ago is that they're just starting. There's a leader inside city hall, Jane Nichols, who deeply understands this issue. And there's concern in Greensboro that they're neither Raleigh nor Charlotte. They're right in the middle. But they have a long history of consensus and discussion stemming from Quakers showing up in Greensboro a long time ago. And they are thinking about their economic and social justice survival into the next hundred years. It turns out that Greensboro has a lot of dark fiber already that's controlled by the city and that they are now exploring how they could lease out that dark fiber in targeted pilot areas to make possible terrific connectivity in areas that are traditionally underserved in Greensboro. Greensboro is pretty much controlled by Time Warner Cable. Something like 90 percent of subscribers are to Time Warner Cable, particularly in the leafy western suburbs. And the city is exploring what its next step is.
Christopher Mitchell: Well, and I think it's worth reminding people that North Carolina severely limits what Greensboro can do, but that law does not prohibit dark fiber approaches, so as long as they stay dark. You know, once again, it's another reason for that wholesale model. There's only one state I can think of immediately and there might be one or two others, but even states that really prohibit business models generally don't limit dark fiber approaches.
Susan Crawford: Right, and the thought had been, I think on the part of the incumbents that got those state laws passed, that it would be impossible economically to have thriving wholesale networks. So why not allow that in as a loophole that wouldn't really get affected. But the world has changed. And with so many more video options available over the top of Internet networks, and with people really understanding that high capacity access is a utility and not a luxury, there is a business model these days for dark fiber offering, I believe.
Christopher Mitchell: Well, I'm curious, in your travels, have you had a sense that there's a lot of companies that are willing to take this up? Because we know
of several: Ting, Sonic, there's XMission in Salt Lake City, that are able to take advantage of these. But there's not enough to date, and my bet has been if we have more cities that build these networks, that there will be more of those ISPs that develop. But it is a bet. It's not something I'm certain of.
Susan Crawford: Right, and I think we're seeing that in Greensboro, also. There's a local company that has already done this on a dark fiber network in High Point, North Carolina. Name of the company is North State and they responded to the city of Greensboro's request for information. They're a local ISP that's very interested in riding on top of that dark fiber. And we certainly saw in places like Stockholm and Sol, that competitors will show up if you make this available to them. For the existing incumbents in America, they're so huge, the companies that control telecom policy here. AT&T, Comcast, Verizon, and Time Warner. Showing our respect for them that they, as a matter of religion, can object to using wholesale networks. But there's some smaller actors that may break ranks. Companies like Cox, companies like Cable ONE. Who don't see the point, frankly, in running a soup to nuts network and would be happy to ride on top of a wholesale offering.
Christopher Mitchell: As someone who has also traveled quite a bit, and almost everything I've learned has come from traveling and gathering people's stories, I sometimes feel like I'm a story thief. I'm curious, in your recent travels in North Carolina and Chattanooga, is there anything that you would be excited to share with us?
Susan Crawford: Yes, I'm very excited about something that happened in Wilson, just in November 2016. The electrical utility there, Greenlight, which provides some of the fastest fiber connectivity in the country, they're now making that available to both apartment houses and public housing units for $10 a month. It's a 50 megabit by 50 megabit symetric connection. And they're finding that take up in public housing units, so adoption of that $10 a month bill being added to your rent, is somewhere in the neighborhood of 70 to 80 percent. And I think we've had for a long time a couple of fictions in our minds. One, that it wouldn't be cost-effective to offer service at such a low price, and that turns out not to be true. Because bandwidth is really cheap. And two, that low income people wouldn't be interested become we'd have to give them all kinds of literacy training, and bring them up the ladder. That's not true, either. So I think Wilson is really showing the way with that program. I find that very exciting.
Christopher Mitchell: As you were saying that, it actually reminded me of something from a recent podcast we did talking with a co-op in...I believe it was northern Missouri, mentioning that they actually have...I think their base offer is 25 megabits symmetrical for $40 a month. But they said that they actually have a lot of people that are taking a mid-tier package, they're going up to 100 megabits because they want more access. I think a lot of the old rules, things that we thought were set in stone, either never were or are changing dramatically now.
Susan Crawford: Right, I think one of those is that you have to have a triple play. The next is that nobody needs this. And the final one is that people are going to resist the ideas of government involvement in fiber. I think all three of those turned out to be myths at this point.
Christopher Mitchell: Right. So let me ask you, did anything pop out of Chattanooga while you were there, like...I actually think Chattanooga, as I was thinking about it, is probably the only place on the entire planet where anyone in the city can get 10 gigabit service. I don't think there's another city in the entire world that can say that.
Susan Crawford: It may be true tomorrow, somewhere else in the world.
Christopher Mitchell: Right.
Susan Crawford: It's not impossible. Chattanooga really gave me this insight that, you know, EPB and the fiber network there, really happened because of a long tradition of rethinking Chattanooga. That starts with the waterfront. And opening up the aquarium. And has the mayor challenging Harold DuPrice to say, what're you going to do for the city? That's all of a piece with Chattanooga continuing to reinvent itself. Never resting on its laurels. And, so, that for me is the lesson from Chattanooga. That everybody works together, and continues to do things that are new and helpful for a community. That has to be true for the country as well. I mean, Chattanooga starts taking off as a modern city when the river and the air get cleaned up. The federal government had to do that. The City could never have done that on its own. And that's a nice symbol for the rest of
the country: That when it comes to actually updating the entire country's connectivity, only federal government involvement is going to make that possible. And we can talk until we're blue in the face about economic growth coming from cities, but we need to do this as a national priority as well.
Christopher Mitchell: Let me challenge you on that to just say "why"? And in the sense that, it seems to me that rural co-ops, they once needed federal money to be established, absolutely. At this point, we have cooperative banks that can loan them money and John Chambers and others believe that, actually, the federal government may be doing more harm than good by throwing so much money at some of those companies you mentioned as running policy.
Susan Crawford: Well, I think that when it comes to setting policy for the country, saying in essence that every house needs this connection in order to be part of the 21st century, only the federal government can do that. And, otherwise, there are a million games that could be played in every corner of the country by these existing companies. They have such strong interests in maintaining the status quo. And that's not good for our future. It locks our destiny into where we are today, and you could have a million struggling rural co-ops. They're never going to get there as fast or as completely as a matter of oversight as the federal government.
Christopher Mitchell: You're right, and I'll say that one of the things that I think is a limitation of mine, and that I don't know that everyone here at the Institute for Local Self-Reliance has this, but you know, in my sense, I want to make sure that every community that wants to do something can do it themselves. But I think your vision is to make sure that everyone is brought forward. No one is left behind just because they might be in a community that is not as entrepreneurial. But, as you were saying that, I was thinking there is something in which I would absolutely identify the federal government as so necessary. And that is breaking up the monopolies, or at least restraining their monopoly power. You have a lot of insight into the federal government, and I understand that it's changed dramatically over the last month, but nonetheless I'm curious. What do we need to do, people that live outside of DC, to make sure that the federal government is going to try and restrain these monopolies?
Susan Crawford: Well, outside DC for the next four years, we have to route around the FCC because the current chairman is going to do whatever he can to support the incumbents. So it's our job to demonstrate the viability of these alternative public options, in essence, and then have that adopted as a matter of federal policy by the next administration, not this one.
Christopher Mitchell: One of the things that I've been arguing is that I think that solving this problem in rural areas is not nearly as hard as solving it in urban areas. I think that making sure people that live in cities, low-income people in particular, have high-quality access, is the hardest challenge we have. And I'm just curious what you've been thinking along those lines.
Susan Crawford: Well, for me, this has become more of a tapestry, and less just about fiber than about fiber as a symbol of everything else the city needs to do. You know, Chattanooga has terrific connectivity. It's too high priced for people living in poverty in Chattanooga to afford, and the structural issues undergirding stubborn poverty in Chattanooga and the terrible problems in their public schools, that all needs to be addressed by the same mesh of community powers that took on the fiber question. So, for me, things are broadening. It's not just about connectivity. It's using connectivity to make visible existing structural problems and then using the community affordances that make fiber possible as the elements that drive the city forward. And I think Chattanooga is quite capable of that, and it's just beginning to work on it, but it's continuing to evolve. Just being a big city is not enough. There's a lot more that needs to be done.
Christopher Mitchell: Well, Susan, this has been a fun conversation. I'm really looking forward to your next book. You know, your first book, Captive Audience, is considered a bible by many people. I think a lot of people got involved in this because of it. I thought your book Responsive City was terrific, I thought it's far beyond the thinking of most smart city discussions, and in some ways I actually think it's maybe more critical of smart city discussions because I think you have a much better framework. So I'm very excited for it. And I will just give you a chance if you have any final comments that you want to share with our audience. Before you go and write the next book and then we bring you back on.
Susan Crawford: Thanks. Just a note of optimism on all these travels in America over these last few weeks for me. No one's talked about Mr. Trump. It doesn't matter what he's up to. It's much more about a very bipartisan, quite progressive group of people thinking about how to make life better in their communities. And that's terrific. That's truly American.
Christopher Mitchell: Absolutely. I think that's a great note of optimism. And thank you for it.
Susan Crawford: You're welcome.
Lisa Gonzalez: That was Susan Crawford, Professor of Law at Harvard Law School, author and telecom maven. We have transcripts for this and other Community Broadband Bits podcasts available at MuniNetworks.org/broadbandbits. E-mail us at podcasts@MuniNetworks.org with your ideas for the show. You can follow Chris on Twitter. His handle is @CommunityNets. You can also follow MuniNetworks.org stories on Twitter. The handle is @MuniNetworks. Subscribe to this podcast and all of the podcasts in the ILSR podcast 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 242 of the Community Broadband Bits podcast.Tags: transcriptsusan crawfordnorth carolinatennesseewilsonchattanoogawholemuni
The town of Palm Beach, Florida, has decided to clear its skies. Starting this summer, the city is engaging in an undergrounding project to move electric, telephone, and cable Internet infrastructure. City leaders have decided to take advantage of the opportunity and seek out ideas for Internet infrastructure, either publicly owned, or a partnership arrangement. Palm Beach issued a Request for Information (RFI) in February for Broadband and Communications Services; responses are due March 15, 2017.
According to the online information about the RFI:
The undergrounding project will continue in phases until every resident, enterprise and anchor institution is connected by and through underground services. This once in a lifetime event presents a unique opportunity for Service Providers to participate in potentially reducing their cost of providing infrastructure and enable Services to expand in to a new market.
Private providers have already approached the city for permission to install fiber-optic cable in Palm Beach rights-of-way (ROW) and the city hopes the additional revenue will ease the cost of the undergrounding project.
Palm Beach’s year-round population is around 11,000 but the coastal community swells to 30,000 during the tourist season. The community is actually located on a 16-mile long barrier island separated from its neighbor West Palm Beach by the Intracoastal Waterway. The community is affluent, with a median household income of approximately $125,000.
We’ve written about nearby communities in Palm Beach County, including Lake Worth, Florida, where the community chose to pursue a free public Wi-Fi project as a matter of social justice.
Check out the details on the RFI at the city’s website.Tags: floridapalm beach countypalm beach flundergroundingrfilake worth FLright-of-way
The 2017 Broadband Communities Summit, Fiber: Get In The Game Of Gigs, is approaching fast. From May 1 - 4, the Downtown Sheraton in Dallas, Texas, will be packed with policy wonks, advocates, experts, and vendors all mulling over the importance of high-quality connectivity. You can still register online.
Once again, the Coalition for Local Internet Choice (CLIC) will hold a special preconference session on Monday afternoon. Christopher will participate in the CLIC session as a panelist on the section titled, “The 2017 State Legislative Session: Challenges and Opportunities for Local Internet Choice.” It’s scheduled to start at 2 p.m. and the panel will discuss various state legislative measures this session and state barriers in general.
Christopher will also be on Tuesday’s Blue Ribbon panel as part of the Economic Development Program at 3 p.m. Lev Gonick, CEO from OneCommunity will moderate the discussion and the other speakers will be Nicol Turner-Lee, a Fellow in Governance Studies at the Center for Technology Innovation from the Brookings Institutions and Hilda Legg, Vice Chairman of Broadband Communities. Here’s a description of the topic from the agenda:
We now have a new administration, a new congress, and a new FCC. They are all focusing on new investment strategies, accelerating high-capacity wireless deployment, and addressing the digital divide. What does all this mean for local communities? Can public-private partnerships provide fertile common ground?
Earlybird full pass registration expires on April 19, so register now for the best price.Tags: conferenceeventbroadband communities magazineeconomic developmentchristopher mitchellcoalition for local internet choice
Ouachita Electric Cooperative, nestled deep in south-central Arkansas, is an unlikely innovator in a pair of industries struggling to adapt to shifting market dynamics: electricity and broadband.
Despite rising demand for energy efficiency and renewable electricity generation, large investor-owned utilities -- and many rural electric co-ops -- have resisted programs to address those needs. Likewise, corporate Internet service providers frequently offer shoddy service at high rates, a particular problem in rural areas with limited competition.
But Ouachita Electric found a way to do both things better, with complementary technologies. Fiber-optic network investments provided lower cost Internet access, but also provide an information backbone for the electric utility that can reduce outage times and verification for energy savings programs. The network and the efficiency programs reduce costs for a customer base dominated by low-income households that can now reinvest their earnings elsewhere in the community.
The utility’s tariff-based, on-bill financing program -- known as HELP PAYS -- allows customers to invest in energy efficiency upgrades at their homes, like insulation and heat pumps, with no upfront cost. Ouachita Electric covers eligible expenses, then recoups its buy-in through payments from participating customers on their monthly bills. Customers immediately pay less thanks to utility-financed energy-saving improvements.
Unlike other energy efficiency programs, the opt-in “inclusive financing” program, HELP PAYS, enables all Ouachita customers to capture significant benefits:
- Low-income households can pay, because they don’t need to come up with thousands of dollars upfront for qualifying improvements.
- Renters can participate, because monthly charges are attached to individual meters rather than individual customers, meaning they won’t be saddled with costs if they move.
- The tariff structure does not hinge eligibility on a minimum credit score, unlike loan-based programs that rely on private financiers.
Customer interest in the tariff-based, on-bill program surged immediately after Ouachita Electric implemented it last year. In the first three months, the number of customers seeking efficiency assessments -- a precursor to improvements -- doubled, from 73 to more than 162.
In August, the utility reported 100 percent of multifamily and rental units eligible for the program had opted in. At the same point, 92 percent of single-family customers that had received offers to invest in upgrades agreed to do so.
The impact of inclusive financing is especially pronounced in this co-op’s service territory, where the average household income hovers around $33,000 per year, far below the national median of $52,000.
But the benefits of inclusive financing, as proven by Ouachita Electric, extend much further.
The enterprising utility reports cost savings, confirmed and quantified using smart meters. Thanks to inclusive financing, Ouachita Electric has reduced the amount it spends on power to supply electricity to its members. Going forward, it will curb the need to add expensive new generation capacity.
A New Fiber Network
Electric cooperatives have tried a number of approaches to improve internet access for their largely rural customers, from working with satellite communication companies to experimenting with broadband over power lines. Now, Ouachita Electric has started a project to bring some of the fastest Internet service in the U.S. to their co-op members.
Ouachita Electric is collaborating with the local, family-owned, telephone company, South Arkansas Telephone, which already provides Internet service to half of Ouachita Electric’s service territory. The partnership, the Arkansas Rural Internet Service (ARIS), is set to bring phone, video, and gigabit Internet service -- more than ten times the speeds typically offered by cable companies -- to all 9,500 homes and businesses throughout Ouachita Electric’s service territory.
Ouachita Electric and South Arkansas Telephone are co-owners of ARIS, as described by ARIS Director Mark Lundy in Telecompetitor. As such, they will share both the cost of construction and the overall revenues.
Mark Cayce, the general manger of Ouachita Electric Cooperative, explained that the partnership builds on the strengths of both the electric cooperative and the local telephone company:
“They have technical expertise and back office skills we didn't have. We have access to our members and we built a long-standing reputation of a company that provides really good service.”
They announced the project in mid-June 2016, expecting to hook up the first customers that September. ARIS will offer speeds of up to one gigabit (1,000 Mbps) directly to homes for less than $100 per month. The entire venture will involve installing about 1,800 miles of fiber over the next few years.
These rural communities cannot wait for the better connectivity -- which won’t just be better than what they had, it will rival the best networks in the country. Within the first week of the announcement, over 400 members signed up for service.
Fiber networks not only provide high-speed Internet service, but also create opportunities to innovate. Cities have used fiber to improve traffic management, electrical systems, and public safety systems. Ouachita Electric’s investment could enable many of these innovations, but they are starting with smart meters.
With real-time sensors, these smart meters monitor power quality and can deliver notifications of power outages. They form part of a smart grid system that improves monitoring and management of the overall electric power system, resulting in power savings and lower costs.
In an April 2012 report, ILSR explained the benefits of the smart grid owned by Chattanooga municipal utility EPB in reducing the time customers are without power:
“EPB credits the smart grid automation with preventing 2.4 million customer minutes of interrupted service during the 2011 tornadoes alone. As of Feb 29, EPB reported that its fiber network had saved 5 million customer minutes interrupted since July 1, 2011—an average of 30 minutes per customer.“
Chattanooga’s smart grid again proved its worth during the July 2012 storms that caused regional power outages. EPB and Oak Ridge National Laboratory’s case study found that the smart grid reduced customer outage time by 55 percent and customer costs by 33 percent. In that one day alone, the smart grid saved the city utility more than $1 million in the expected overtime costs for restoring service.
A 2017 publication by the Berkman Klein Center for Internet & Society at Harvard University estimated that the EPB smart grid also provides indirect benefits of $43.5 million annually. That number only includes cost savings from quickly detecting failing equipment and isolating potential problems. EPB also directly saves at least $9.6 million with the new sensors - from catching power theft to better regulating power purchasing.
Additionally, the Chattanooga EPB smart grid actually prevented a house fire, in 2014. Thanks to the real-time information from the smart meter, the municipal electric utility sent a nearby employee to check out an anomaly. It turned out to be a fire in the bushes near the back door of a home. The employee put out the fire and fixed the electric line all before the family came home from church. This would not have been possible without the community fiber network supporting high-speed communication between the meter and the utility.
Ouachita Electric’s decision to invest in the fiber network means the co-op’s members will be well-connected and well-served. Members will save money and conserve energy with the smart meters, and they will have access to some of the most reliable, highest-speed Internet service in the entire country.
Ouachita Electric has cemented its status as a pioneer in boosting access to energy programs and broadband, but it shouldn’t be an outlier. The co-op’s attentiveness to its member-owners’ needs spotlights opportunities to introduce well-designed initiatives that plug gaps in the local economy. It’s a formula that should attract all co-ops, designed with democratic ideals in mind.
These initiatives are a set of powerful tools to address low member-owner engagement that plagues rural utilities nationwide. With trailblazers like Ouachita modeling real-world initiatives that deliver measurable results, other co-ops and their member-owners face a substantially lower barrier to pitching and implementing similar efforts, and to cash in on the robust -- and proven -- potential of energy savings and Internet access.
Photo Credit: Justin Cozart via Flickr (CC BY-SA 2.0)Tags: rural electric coopcooperativeelectricArkansasEPBchattanoogatennessee
This is episode 241 of the Community Broadband Bits podcast. John Bergmayer from Public Knowledge joins the show to talk about the "bundle" in the cable industry. Are cable bundles a bargain as advertised? What do customers want? Listen to this episode here.
John Bergmayer: You know the structure of the programing industry and the structure of the cable industry means effectively they're not being served. They’re getting ripped off I believe.
Lisa Gonzalez: This is episode 241 of the Community Broadband Bits podcast from the Institute for Local Self Reliance, I'm Lisa Gonzalez. Cable subscribers often complain about bundling. Being forced to choose from video packages that include channels they don't want in order to get access to the content they do want. Why are we stuck in this model? And what are the ramifications for service providers? Especially now that so much content is available via the Internet. What are some of the concerns smaller cable providers encounter when negotiating for content? This week, Christopher talks with John Bergmayer, Senior Counsel from Public Knowledge who explains why Comcast and Time Warner Cable and other cable companies are so in love with the bundle. They discuss why it's difficult to move past this model and whether or not bundles are a bargain, as they are described in advertising. Or something quite different. Now here's Christopher and John Bergmayer, Senior Counsel at Public Knowledge, discussing unbundling and the world of cable.
Christopher Mitchell: Welcome to another edition of the Community Broadband Bits podcast. I'm Chris Mitchell. Today I'm speaking with John Bergmayer, Senior Counsel for Public Knowledge, a non-profit organization in Washington, DC. Welcome to the show!
John Bergmayer: Yeah, thanks for having me Chris.
Christopher Mitchell: John, can you tell us a little bit about what Public Knowledge does for people that haven't been around to hear past interviews with Chris Lewis and Harold Feld and other great people that you have on staff?
John Bergmayer: Sure, you know, we're a DC based public interest organization, or consumer group. We fight for consumer rights in a number of areas such as, telecommunications, cable TV, copyright policy, Internet policy, things like that. Things that actually pretty much have in common is the concept of accessing information. We want to make sure people can access communication tools and the information that they need from competitive markets and at low prices.
Christopher Mitchell: I just wanted to suggest one other thing, which is that, I think sometimes people thing public interest groups are on wide and business are on the other. Now you guys are often working with business, often creative businesses, right?
John Bergmayer: Yeah, I think that's right. I think, we're a DC based organization which is pretty important. We advocate before the FCC, before members of congress, and we find it's pretty affective to ally with as many people as we can when there's issues that we all agree on. So even though we do fight a lot of the major telecommunications companies all the time, you know, if there's an issue that we agree on, we're not above working with them because we're really just about getting results. And what you mentioned was, frankly a lot of the things that consumers benefit from, also benefits smaller businesses, whether they're start ups, whether they're community broadband providers, anything like that. Those are maybe commercial enterprises or they're doing a thing, they're not just policy and advocacy groups, but never the less, to the extent that we can work with organizations like that, we're happy to.
Christopher Mitchell: What we're going to talk about today is cable unbundling and kind of the economics and law behind how the channels get set. I think the generally question is kind of, "Why can't I just get the channel that I want, and why do I have to pay for so many other channels that I might not want if I subscribe to cable?"
John Bergmayer: Yeah, I think the problem is that ultimately there's a lot of very concentrated market places all sort of working together to create an economic model which is very profitable for sports leagues and some major programmers, and maybe even some major cable companies, that ends up requiring that people buy a lot of programming that they don't necessarily want to watch. I think sports, I mentioned that because I think that's like the key example. Sports programming is actually not as popular as people sometimes think. Maybe 20 to 30% of people might actually watch sports. Things like ESPN, everyone pays for it or when networks carry major sports leagues, everyone ends up paying for that as well. And people who are not sports fans but are who are cable subscribers can never the less end up spending between 8 and $15 dollars a month of their bill just goes just for sports rights. And I think in a more normal market you wouldn't see all these non sports fans, subsidizing sports fans, but the way that market is structured, I think that's the clearest example of the way that people are denied choice, and they end up paying more than they ought to pay.
Christopher Mitchell: Well you mentioned something that I think probably one of the keys to first explaining, and that is that, we're not really talking about one market place or one monopoly, there's actually overlapping monopolies. I think maybe the way to lead into this is to say, if Comcast wanted to just sell me individual channels, could they do that?
John Bergmayer: No, probably not. I mean Comcast is obviously the largest cable companies so they have a lot more leverage with programmers than most other cable companies or satellite providers do. But never the less, even they sign contracts with the major programmers and what happens is, they sign a deal with Disney, they sign a deal with Viacom where, they're not just carrying one channel, or the popular channels that they carry, their getting bundles, right? So they buy a bundle and sometimes the terms of the deal are that the programs that they carry have to be on consumers basic cable packages. There's a fight between programmers about who gets that prime real estate, that's low in the dial where people are much more likely to watch it and if you can get yourself included in basic cable and everyone has to pay for it, you know, that's great for you as a programmer. But they're is only five or six truly major programmers that end up controlling so many of the channels that people watch and taken all together they end up basically comprising the bundle. And very often the cable companies don't have the option contractually to offer to customers more a la cart choices. Or even if they did, the terms would be uneconomic like theoretically, the ability might be there but customers would end up paying more for more choice which doesn't really make a lot of sense.
Christopher Mitchell: Right. You can imagine a number of scenarios in which you say, "Oh you can get that channel individually but it's going to cost almost as much as a package would have anyway."
John Bergmayer: Right, exactly. You know we talk about a la cart, but that doesn't necessarily meant it's like you go to a sushi restaurant and you pick out each individual roll on a card. It's really just about, okay people are paying too much and they're not getting the choice they want. You know, people subscribe to Netflix at $7 a month and you subscribe to all of Netflix at once, so in a sense that's a bundle. You go to a fast food restaurant and you get a value meal, that's a bundle. Those things can be fine because people have a choice. And there's clear trade offs. I think the problem with cable -- Every time we talk about a la cart people will talk about, "Oh well you know bundling can be economically efficient and conserve all these various values, and they can sort of make less popular content available to people.", all that's true, I'm not arguing the economics of whether bundling makes sense per say. But I think when look at the actual bundles that are available to people, they're just more expensive and much more bloated than anyone would really choose. So it's not just a question about, "What is the better businesses model?" The question is, "Are consumers being served?", and I think that the structure of the programing industry and the structure of the cable industry means that effectively they're not being served. They're getting ripped off I believe.
Christopher Mitchell: You can definitely correct me if I'm wrong, but the sense that I get is that, the bundles being created by the content owners is a big part of the problem. Maybe if the bundles were created by the cable companies more so, they might have different incentives. And certainly if the bundles were created by the users, the subscribers at home. That would certainly be much better from their perspective. It seems like it's kind of -- Viacom wants to throw in a bunch of channels that it knows most people don't want and it's going to force you to take those channels if you want MTV or something like that, and that's sort of the problem.
John Bergmayer: Yeah, I think that's about it. The game is that you're a programmer and what you want to do if you have one or two popular shows, or popular channels rather -- You know, the cable company pretty much need to have them. So you say, "Okay, you can have them but we're going to give you a discount if you take these other channels which no ones ever heard of before, or we'll even charge you less because we're trying to get them out there. We're just looking to make money on advertising for those." So you end up the channels people want and then a bunch of like filler channels end up being there as just part of the bargain and figuring out what you're paying for what channel can be pretty tricky. But then, once the channels on the dial, then you have the ability if you're a programmer, to try to make that the must have channel. I think AMC is the most obvious example. AMC was just like the old classic movies, like you know, classic cable channel that just plays a particular niche kind of content, they weren't making original programming. They're just playing old black and white movies and that's great. But then they start with shows like Mad Men and they start with shows like Breaking Bad and all of a sudden, next round of negotiations with cable companies, they're able to demand a lot more money. And if you just like repeat that through the spectrum you have a lot of channels that once they get on the cable dial, they try to make themselves must have programming and the result is, we do have, I think, better TV shows than ever before, so it's not all bad. But at the same time people truly are paying more and more. The question is, "Is the market actually working properly?"
Christopher Mitchell: It seems to me that the evidence suggests that TV has gotten better even outside of those bundles. Because, it think you mentioned earlier, some folks have an interest in just defending bundles, right? I mean the cable industry pays some people who do nothing but argue with your group it seems like. And so they're going to say whatever they possibly can. But the evidence I would point to, is that HBO is a classic non-bundle channel. It's off on it's own, if I'm understanding the terminology correctly, and they kind of led the way in some ways with some of this great content.
John Bergmayer: Yeah, HBO not only -- It's always been a premium channel, so it's an add on you can choose to pay for or not. But they have such leverage that they're able to even start selling directly to the consumers over the Internet. And similarly you see a great award winning programing being made by Netflix, Amazon, and Hulu and so forth, so I think you're right. We are in a great time for TV. Particularity for these long, elaborate high budget dramas, but also as well for quirky new comedies and things like that. And the fact that they are occurring outside of the cable bundle really shows that it's not really the cable bundle which is the cause of all this great programming. I think it is rather the affect of online competition which is driving higher quality programming. So I think it's another lesson, when you have like a more normal market where people can pick and choose and there's different sources for programing that that's a good way to get quality products out.
Christopher Mitchell: We did go a little bit deeper in terms of looking at the different interests of the content providers, versus the cable companies and now I want to make sure we talk about the cable companies, because Comcast, although it is to some extent --Has not as much power as the content providers, it also has substantial ownership and cross ownership with content. But smaller cable companies and in every municipality that does cable, is a small cable company, smaller cable companies, I think, are the ones that really are hurt the most by this. Can you talk a little bit about that?
John Bergmayer: So you're right. Not all cable companies are the same and in fact we're seeing a reintegration of large cable companies with content, so not only did some years ago we saw the Comcast NBC deal, now AT&T, which has it's U-verse system, which is effectively a cable system, is looking to buy Time Warner, a giant programmer. So you're seeing a lot of that vertical integration. The same economics simply don't apply to companies when they're at that scale and when they have their fingers in so many different pies. With the smaller cable companies in particular, a lot in rural areas, you have groups like the American Cable Association that represents the small cable companies, they're thousand really, nation wide, often only with a few thousand subscribers. And they simply have zero leverage against the large programmers. So not only do they have to bundle programming under the same deals, they really have almost no room to negotiate. The way that the market works is that the larger providers pay less on a per subscriber bases. So obviously Comcast is paying more for programming than some one thousand subscriber cable company in rural Georgia or something. But on a per subscriber bases, Comcast gets a better deal because it has more leverage, it has more lawyers, it can negotiate more, it can offer more. As a result these smaller cable companies though, they don't have that so they're barely getting by so on the one hand, they're still cable companies. People feel like they don't have a lot of choice. People see that their bills are rising year after year, and these smaller cable companies sometimes have a pretty bad reputation with their customers just like Comcast or Charter might. But they're not making the same amount of money or any money at all off of video. It's something that they now feel like they started out being video providers, but now video is something they have to offer cause they're customers demand it, but they really find that they make more money just offering broadband, which you don't have to deal with content companies. I mean just think how it is, like you can start like a small community broadband network and there's a lot of work, you have to do in local permitting, and you have to have engineering expertise and there's a lot that you need to know but one thing you don't have to do is have like your business people meeting with like negotiators from Viacom. I think dealing with the Hollywood side of things and the content side of things for the smaller companies can be pretty burdensome.
Christopher Mitchell: This is where I get a little bit frustrated and a little bit red in the face, because it strikes me, you know the federal policy is extensively one of competition. And yet when the rules are structured in this way, that small cable companies who often have a better reputation than the big cable companies, although there's certainly, as you mentioned, there's a number of small cable companies that also have bad reputations But if you're a small cable company probably everything is your reputation if you can expand and the idea is that, over time you would hope that some of these small cable companies could rise up and challenge the big ones in terms of competition. But it doesn't seem like that would be possible given that everything is structured so that the smaller cable companies have to pay more for the same inputs as the bigger guys.
John Bergmayer: Yeah, and it's particularly frustrating because we're moving to -- When the whole system of cable TV started it was just like a technical necessity. You know you had a network and the network carried particular content and then you to negotiate for that content. And there's really no way around it but now with the magic of broadband, you can just provide a high capacity broadband network, and people can get the their video from all kinds of source. It doesn't have to be so closely tied. The way that the market is structured, that's really hard. It would be very difficult to be a small cable company and say, "We're going to drop the video component then, just subscribe to Netflix." Because the content that people want is just not available online yet. We're seeing some motion. You have things like direct TV now and Dish's fling TV which are a little bit more cable like in terms of what you can get online, but we're still not quite there. So they still do have to deal with it. And at the same time, you have these tremendous disparities of barging power. We've had such concentration on the media industry, and on the cable industry too. But what happens is when you have these gigantic programing companies dealing with these small cable companies, there's a real fundamental unfairness because there's this disparity in bargaining power. And similarly if you're just like an independent programmer, you just have one channel, you just have this passion to make programing about some niche sport or maybe serve some foreign language community or something like that, and then you show up at Comcast and they might not give you the time of day because they're spending all their time dealing with the big companies. So you have this concentration which I think is inherently anti consumer and you have these side effects of these giant disparities and bargaining power which I think is real problem that I really wish the FCC would address.
Christopher Mitchell: One gets the sense from what you were just saying, that we may be moving in this constant direction of having more and more content available online. In some ways I worry that it's actually -- We take a step forward, we take two steps back, we take three steps forward we take two steps back -- It seems like the cable companies have a lot of tricks up their sleeve to prevent us from just moving to this world in which that small content creator that you were just mentioning would be able to just distribute across the Internet. I'm curious where you see things going in the near future in terms of this game of whether we have to subscribe to cable packages in order to watch the channels we want.
John Bergmayer: So if you want to be an online video provider, not only do you have to reach customers, you have to reach customers over broadband connections. So you have issues with net neutrality there you know, that's like a big area that Public Knowledge works on and that affects -- it has to do with zero rating and whether there are bandwidth caps and whether their interconnection is congested and things like that. And if you don't take care of those technical details and it's not even possible technically to be an online video provider that can offer people a watchable video service, you don't have a chance. So that's one set of challenges and when you're competing against cable companies that want to protect their own business you can see how you have the incentives maybe not working in your favor. At the same time you have to get access to programing. If you want to compete with cable like no you can't just offer your own programing. I mean you can, you can be like Netflix with it's original shows but then you're not really going to be a full substitute. People aren't necessarily going to cut the cord. Some people will, but people who really depend on or who really like the programs they can get on cable, if they can't get it online, they might not be willing to cut the cord and go online. So you've had a lot of companies try and fail to reproduce the cable bundle online. And only now do you start to see some companies that are able to sort of break through the regulatory barriers, the legal barriers and the economic barriers to offer something which is sort of cable TV like, but who are those companies? You have Dish and Direct TV basically. And those are giant pay TV providers. They're able to do it because they -- You know the satellite guys were in a bind because they don't offer broadband, so ultimately they saw that they had to adapt at some point. They have to start offering new services and they were much more willing to risk basically cannibalizing their traditional satellite customers in favor of online customers because that's where they saw their future. The cable companies themselves, maybe have the business and technical ability to this but they didn't have the incentive to do it. That's better than nothing, but it's still pretty far from the vision of a truly open and competitive Internet where almost anyone can come up with a new company and you can have a new Internet video company that goes from nothing to being huge in just a matter of years. Instead what you see is some of incumbents slowly shifting their operations online. So that's not all bad. It could be good for some of the small cable companies if maybe in 10, 15 years, because these things take time, Maybe they can shift to just sort of having a deal with something like AT&Ts Direct TV now. But what were not getting is the truly open and competitive video market place that the Internet has the potential to offer. But that potential isn't just going to happen all by itself.
Christopher Mitchell: So I think a key question for you being in DC is, what can congress do about it?
John Bergmayer: There are a few things. The FCC had a preceding that the previous FCC opened up, which is really just about making sure that smaller programmers are not prevented from selling their programing online. We have a similar issue that we faced a number of years ago with satellite TV. Satellite was a new technology. Policy makers saw that it had the opportunity to maybe introduce competition to cable. They knew that it couldn't just happen by itself. So we passed a number of laws, including what is currently Section 628 of the Communications Act called Program Access Rules. Which made it so that cable companies couldn't prevent programming from being carried by satellite. So the result was satellite TV providers were able to offer pretty comparable packages to what cable was offering and they started to be pretty successful. And it was really succeeding in bringing some new competition to the market. Then we know what happened next, is that broadband came along and that just really cemented cables advantage over satellite. But at the same time we do have like a lesson from history of what it takes to really -- If you want new entrance to offer video services, that's kind of what it takes. You have make sure that they can get the programing that they need without being locked out thought restrictive contracts that keep people from selling to them. And you have to make sure that they can somehow reach consumers and satellite it was making sure they have spectrum and with Internet services it will be making sure they have basically access to bandwidth to -- last mile bandwidth to reach consumers. Those are the sets of policies I would look for Congress and the FCC to do. It's just right now I'm not that optimistic that they're going to take such a proactive approach to promoting competition.
Christopher Mitchell: Well maybe if Time Warner from channel -- CNN in particular continues to annoy the president, he'll strike back against the content owners and cable companies, one never knows.
John Bergmayer: I think right now were in a time where it's very hard to predict what's going to happen in two weeks much less what's going to happen in three to six years. But at the same time, even in that environment we're going to do what we can to make sure that the video market place evolves in a way that is positive for consumers and competition
Christopher Mitchell: Great. Well I think you may have your work cut out for you but we're definitely supportive. And I want to thank you for taking time to talk with us about this issue.
John Bergmayer: Yeah, it was fun, thank you.
Lisa Gonzalez: The was Christopher and John Bergmayer, Senior Counsel of Public Knowledge, discussing cable companies and bundles. 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. You can also follow MuniNetworks.org stories on Twitter, 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. Never miss out on our original research. Subscribe to our monthly newsletter at ILSR.org Thanks to Admiral Bob for the song, Turbo Tornado, license to creative comments, and thanks for listening to episode 241 of the Community Broadband Bits podcast. Have a great day.Tags: transcriptcablecomcastpublic knowledgeratestime warner cablecompetition
Not everyone’s American dream involves owning a single-family home but most of us DO want high-quality Internet access in our household. In major metropolitan areas, apartment renters are more likely to have cable and some are lucky enough to have Fiber-to-the-Home (FTTH). It’s only been recently, however, that owners of multiple dwelling unit buildings (MDUs) have really started to appreciate how fiber-optic connectivity, especially the gigabit kind, can add value to their investment. Now, a pair of MDU developers in Vermont will be the first to offer gigabit connectivity in the state to their renters and they’re choosing Burlington Telecom (BT) to provide the service.
The Gold Standard
“Fiber optic networks are fast becoming the gold standard both at work and at home, so it was important for us to have Burlington Telecom for this project.” says Jacqueline Dagesse [one of the developers], “Including Gig internet as an amenity offers our tenants instant access to the fastest, most reliable connectivity available without the hassles of signing up for service, waiting for an installer or committing to long-term contracts.”
The 27-apartment building is located in downtown Winooski, a town that borders the city of Burlington. The exercise facility in the building will also be a Wi-Fi hotspot. In addition to offering gigabit connectivity, the developers wanted to include various energy efficient amenities that would promote sustainability. The building will open this summer.
It Adds Up
MDUs with FTTH bring higher rents and a higher purchase prices for condos or units that are owned by residents. According to research by RVA, LLC, and reproduced in a neat graphic by the FTTH Council, almost 30 percent of people in the U.S. live in MDUs and FTTH connectivity can increase renters net income by 11 percent. This may be the first gigabit access apartment building in Vermont, but it won't be the last.Tags: Burlington TelecomBurlingtonVermontmduFTTHftth councilreal estate
I have been a Google Fiber supporter, believing that Google's investments and policy goals would move the United States forward, away from the monopolies of entrenched incumbents. When others claimed that Google was abandoning fiber, I argued that Google had not yet decided... it was arguing internally about the right path.
But now I think it is pretty clear that Google is done with significant fiber investment, particularly for single family residential homes. I have strong doubts that Google will continue with the Huntsville-type approaches of leasing dark fiber, but I hope that will continue.
Google's decision to pursue other, likely more lucrative investments like AI and autonomous driving may be more profitable, but it is certainly disappointing for those of us working to ensure everyone has high quality Internet access.
It is important to note that companies like US Internet, Ting, and Sonic, among others have establishing strong businesses competing against the biggest telephone and cable companies. Google's exit is not evidence that ISPs cannot do well. It is evidence that Google has other opportunities and that its large scale focus on building its own fiber had too slow of a return for its Silicon Valley expectations.
This brings me to something I wrote 5 years ago, not actually expecting that Google would give up after only 5 years.
If I were moving south of Minnesota in the near future, it would be to Chattanooga or Lafayette, not Kansas City. Who knows what Google will be doing in 5 years? We know exactly what EPB and LUS will be doing.
Wow. I think Kansas City is definitely better off for having worked with Google to enable that network. But there is no doubt in my mind that local investments are a better bet than hoping some distant company will save your community. I think this article understates Google's impact in KC significantly, but we are once again reminded that there is much more to benefiting from a network than simply laying fiber.
There is a lot of work that must be done to take full advantage of a modern network to benefit an entire community. This is why at the Institute for Local Self-Reliance, we put a greater focus on local investments with local buy-in and support. Where people recognize they have to do more work and can't count on a unicorn to save the day.
This is not a criticism of the folks in Kansas City that worked really hard to maximize the impact of Google's investment. I can think of many people that ensured Google's impact went far beyond cheaper Internet access for tech folks. But for communities that are trying to figure out what they can do, I would look to Santa Monica, Ammon, Sandy, Lafayette, Westminster, RS Fiber, Lincoln, and Huntsville for lessons, not those who temporarily win the lottery with a sudden non-local investment.Tags: googlemunikansas citychattanoogalafayettepublic v privateinstitute for local self-reliance
Susan Crawford has come back to the podcast to tell us about her recent travels in North Carolina and Tennessee, talking to people on the ground that have already built fiber-optic networks or are in the midst of figuring out how to get them deployed.
Susan is a professor at Harvard Law, the author of The Responsive City: Engaging Communities Through Data-Smart Governance and Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age, and a champion for universal high quality Internet access.
We have an informal discussion that ranges from what is happening on the ground in North Carolina and Tennessee to the role of federal policy to why Susan feels that municipal wholesale approaches are important to ensuring we have better Internet access.
It was a real treat to have Susan back on the show and to just have a discussion about many of the issues that don't always come up in more formal presentations or media interviews. We hope you enjoy it! Susan was previously on episode 125 and episode 29.
We want your feedback and suggestions for the show-please e-mail us or leave a comment below.
Thanks to Break the Bans for the music. The song is Escape and is licensed under a Creative Commons Attribution (3.0) license.Tags: susan crawfordcompetitionpolicyfccfederaldark fiberwholesale-onlynorth carolinatennesseeaudiopodcastbroadband bitspreemptionwilsonchattanoogaEPB
For local schools, finding ways to cut costs can be challenging but allows more money to be spent directly on students. While trimming small costs here and there adds up, eliminating leased lines from telephone companies and making the change to VoIP phone systems can be a big savings with improved service. Pitt County Schools in North Carolina are one of the latest to upgrade and save big.
Goodbye Copper, Hello Fiber
The district owns a fiber optic network and has ditched copper wire telephone service in favor of a new VoIP system at nine of its facilities. The cost to replace the phone system at those facilities was $32,000 but the district reclaimed $13,000 so far by eliminating the need to lease copper phone lines.
District officials plan to replace all the phones in the district with a fiber based system at a cost of $210,000, pending the availability of funding. They estimate annual savings will be approximately $107,000, so the project will pay for itself in less than two years.
More Than A Trend
Carroll County Public Schools (CCPS) in Maryland and Austin's public schools in Texas found that switching from traditional phone lines to VoIP supported by fiber saved their districts significantly. CCPS began saving approximately $400,000 per year when they partnered with the county and several other entities to develop the Carroll County Public Network (CCPN). Austin Independent School District (AISD) collaborated with several other entities in Austin, Texas, and AISD’s investment in their network paid for itself in less than 3 years. In 2011, AISD estimated they saved almost $5.8 million in telephone and Internet connectivity avoided costs.
It's Not All About The Money
In Pitt County, school officials are finding better service is an added benefit:
In addition to saving money, the new phone system offers a variety of features, such as online call history and voicemail, an easier system for connecting calls to classrooms, better call quality and a higher possible number of simultaneous calls, as many as 350 for all schools combined, according to [Executive Director of Operations Matt] Johnson.
Pitt County Schools serve approximately 24,000 students from an ethnically diverse student body in eastern North Carolina. Greenville is the Pitt County seat and where much of the county’s 170,000 people live. The county is located in the east central part of the state, situated directly east of Wilson County.Tags: north carolinaschool districtsavingsleasepublic savingseducationtelephone
Reincarnated from last year’s anti-muni bill in Missouri, SB 186 was heard in the Senate Local Government and Elections Committee on St. Valentine’s Day. The sweetheart’s gift to the national cable and DSL companies, however, didn’t come until today. The committee held its executive hearing, voted the bill “do pass,” then sent it on its merry way. According to a very helpful staff member at the Missouri State Legislature, the bill will now be put on the informal Senate calendar and can be picked up at any time by Senate leadership for a vote by the full Senate.
As we reported in January, SB 186 fattens the state’s existing laws that insert state government between a local community and its ability to make its own choices about its broadband future. Just like last year’s HB 2078 (this bill’s dead twin), SB 186 makes it extremely difficult for municipalities and local governments to use their own infrastructure to work with private sector partners. The bill comes from lobbyists representing large incumbents who want to ensure their monopoly positions, even if it means sacrificing rural peoples’ ability to participate in the modern economy.
If you live in Missouri, take a moment to call or email your Senator and tell them that, if this bill comes before you on the Senate floor, you want them to push the red button to kill it. Even if you live in an area where you already have high-quality Internet access, consider the principal that state government calls the shots on an issue that should be determined by local people. This bill impinges on local decision-making authority.
If you don’t live in Missouri you can still contact State Senators to let them know that the bill is harmful to rural areas, antithetical to the competitive spirit, and should be done away with as soon as possible.Tags: mo sb 186missourilegislationlobbyingbarrierstate laws
About a year ago, Internet service provider Countrywide Broadband (CWB) and equity firm Seaport Capital announced that they would collectively acquire the assets of Illinois based ISP, iTV-3. The partners would form the subsidiary Internet service provider i3 to take over operations that belonged to iTV-3. Not an unusual course of events when one hears about large companies gobbling up smaller ventures on a regular basis. This situation was different because iTV-3 had been working with the communities of Champaign and Urbana to bring high-quality connectivity to residents and businesses via its publicly owned fiber. Just yesterday, CWB announced that the deal has been completed.
Partners 1 and 2
When the UC2B nonprofit organization chose iTV-3, the partnership was lauded as one that held local concerns a top priority. iTV-3 is an Illinois based company and their interest in participating as a community member, rather than just a distant ISP, made them a desirable choice.
An important component of the partnership was iTV-3’s commitment to invest by expanding the existing network and they did build out in some areas. Expansion did not happen quickly, however, and elected officials hope that i3 can accelerate private investment so more neighborhoods can access the Fiber-to-the-Home (FTTH) network. From the Countrywide press release:
Urbana Mayor Laurel Prussing further commented, "With new management and a more aggressive build-out schedule, more residents will have access to high-speed internet. This is essential for local entrepreneurs in our modern economy and for all other users as well."
The UC2B nonprofit began the project with a $26 million award from American Recovery and Reinvestment Act (ARRA) funding. It was an urban FTTH project that allowed residents to sign up for Internet access for as low as $19.99 per month. In 2014, chose iTV-3 to take over operations and expand the network, resulting in a combination of publicly and privately owned fiber assets.
Partners Aren't Perfect
When iTV-3 decided to liquidate it’s fiber in Champaign and Urbana, the local community was understandably concerned about what kind of company would be handling their network. They didn’t want to get stuck with a large distant provider with little interest in the well being of the Urbana-Champaign community. When working with a partner from the private sector, this is one of the possibilities communities need to consider. P3s have been in the spotlight in recent years as an ideal solution for many communities, but they have their own set of risks. Decision makers should be realistic and review challenges other communities have faced in partnership arrangements.
Check out our 2016 report on partnerships, Successful Strategies for Broadband Public-Private Partnerships
The New And Bigger Era Begins
i3 appears to already be taking a different approach than the national companies by integrating newer video technologies into their offerings:
"Our television packages are very consumer friendly," said Raclin. "We're offering new, smaller channel packages, which provide streamlined video entertainment options at a lower cost, along with increased video-on-demand and 'TV Everywhere' services that allow our customers to watch their favorite shows anywhere they want," Raclin added. "We are focused on providing services that meet and exceed the demands of our customers."
CWB's Raclin has stated that the aim of the company is to add more broadband companies in order to grow CWB. Hopefully, i3 can keep customers' needs a priority as the company expands.Tags: uc2bchampaign-urbanaillinoispartnershipitv3FTTHexpansionincremental
Why SF needs municipal broadband by Tim Redmond, 48 Hills Blog
Northern Minnesota and the 'digital divide' by Beth Bily, Business North
Bill could hinder city efforts to expand broadband by Brittany Ruess, Columbia Tribune
Missouri the latest state to let telecom monopolies write awful, protectionist state law by Karl Bode, TechDirt
Rural Franklin Co. broadband on wait-and-see timeline by Denise Raymo, Plattsburgh Press Republican
State needs better broadband, not subsidies by Christopher Mitchell, Knoxville News Sentinel
Blackburn has opportunity to shape future of Internet by Carolyn Tackett, The Leaf-Chronicle
Bill won't curtail county broadband authority by Amber Galaviz, Orange County Review
2017 session so far lacking broadband expansion bills by Ashton Marra, West Virginia Public Broadcasting
Lawmakers are 14 days into this legislative session and so far, not a single bill dealing with broadband expansion has been introduced. The issue received attention early last session, but lawmakers say they’re still working on a plan to reach both unserved and underserved areas of West Virginia.
Thirty percent of West Virginians do not have access to basic broadband service under federal definitions. When you look at just the rural parts of the state, that percentage increases to 48, according the Federal Communications Commission.
Broadband has a problem on the pole by Mari Silbey, Light Reading
Broadband Internet can help rural communities connect - if they use it by Brian Whitacre, Government Technology
Academic studies have found that broadband access led to more new businesses in rural areas, and that high levels of broadband adoption were associated with increased median household incomes and lower unemployment levels for rural residents.
Broadband companies can't build out their networks, and it's hurting consumers by Rob Pegoraro, Yahoo! Finance
NLC: State government limiting more municipal activities by Bailey McCann, CivSource
Photo of the Highlander calf courtesy of robertobarresi via Pixaby.Tags: media roundup
The community of Rock Falls, Illinois, is well on its way to developing a gigabit municipal network to offer better connectivity to residents, businesses, and public facilities. Last week, the City Council adopted an ordinance that allows the city to issue general obligation bonds to fund citywide fiber-optic Internet infrastructure.
The city’s plan will expand first in business corridors and then use the fiberhood approach in residential areas, building only after a certain percentage of households preregister. The plan divides the city into 14 fiberhoods with each area’s build out cost estimated to be approximately $250,000. Residential fiberhoods will require 45 percent participation prior to construction. Consultants estimate citywide buildout costs will be $13 million; the City Council authorized bonding for that amount. The first bond issue will be $4.1 million likely to happen in early May if approval proceeds as planned.
The City Council authorized the first phase of the project to begin - network design and project administration - which will cost approximately $207,000. The process to issue GO bonds will start in March and city leaders hope to have the backbone completed by the end of June.
Most publicly owned Internet infrastructure is funded by revenue bonds, avoided costs, or interdepartmental loans rather than GO bonds. When funded by general obligation bonds, a project is backed by the credit and taxing power of the issuing jurisdiction and the resource is always publicly owned. Clearly, the community of Rock Falls recognizes how critical the investment is to the community's future.
From The Mayor
In his recent State of the City address, Mayor Bill Wescott focused on three factors that drove the initiative: growth, the city’s strong finances, and local control.
While it’s common knowledge that economic development needs better connectivity than what is now available in Rock Falls, Wescott noted that residents stuck with 10 - 20 Megabits per second (Mbps) download Internet access need and deserve higher capacity connectivity to participate in the modern economy. He defined “growth” broadly, encompassing jobs, education, innovation, public safety, and government.
Wescott emphasized that the city has a strong bond rating and has held fast to its reserve fund policies. Even though the state has financial issues, he said, Rock Falls is solid and now is the time to make this investment in the future.
He also described how this investment will allow members to keep local dollars in the community, rather then sending them off to a distant provider with no interest in what happens in Rock Falls.
Community On The River
Located in the northwest corner of the state, the town sits on the Rock River with Sterling on the other side. Chicago is two hours directly east. In the 1980s, the city invested in a hydroelectric plant and the community pays low rates for electricity from its municipal electric utility.
Like many other municipal electric utilities across the country, the City of Rock Falls Electric Department (RFED) used fiber-optic cable to connect substations. Back in 2004 community leaders began working with various consultants investigating ways to make more and better use of existing assets. They've served a few business customers in the past, but this plan will bring fiber to all of the community.
RFED serves the 9,300 people who live in the city and has received a number of awards for reliability and safety. The institutional knowledge and resources in RFED will make their municipal network project easier to implement.
Pondering The Plan
The community has been working on the plan for approximately two years, as locals have grown increasingly dissatisfied with incumbent cable provider Comcast. The lone City Council member voting against the plan expressed concern about losing Comcast franchise fees if Rock Falls’ service turns out to be “a huge success.” Since satellite is drawing away Comcast customers in Rock Falls and the city receives no fees from satellite providers, the city’s coffers are no worse off. With an established trust between residents and the existing utility, it seems like a win-win for both the municipality and its citizens.
The city of Rock Falls has also had their own difficulties dealing with Comcast:
"The franchise fees have been going down steadily, and a lot of that is because of dissatisfaction with Comcast," City Administrator Robbin Blackert said. "People are switching to satellite, which we get nothing for, or cutting the cord entirely."
Blackert said residents are constantly bringing Comcast equipment to City Hall, frustrated with the company's customer service. The relationship has also been strained with the city.
"We haven't been able to solidify a contract with them in a decade, and we've lost revenue – it's not been a good relationship," Blackert said. "The company has become too big and hard to deal with."
Check out the adopted ordinance and the consultant's report in the City Council packet at the Rock Falls, Illinois, website (starting on pg. 29).
Image of the Coloma Park in Rock Falls courtesy of the Coloma Township Park District.Tags: rock fallsillinoisFTTHincrementalfiberhoodelectricutilitybondsfundinglocaleconomic development
This is the transcript for episode 240 of the Community Broadband Bits Podcast. Christopher Mitchell speaks with Darren Farnan of United Electric Cooperative in Missouri. The electric co-op has undertaken a fiber project to bring high-speed Internet service to their members. Listen to this episode here.
Darren Farnan: We're seeing almost 70 percent of our customers either take 100 Mbps service or above. That's telling the story of what that real demand is out there.
Lisa Gonzalez: This is Episode 240 of the Community Broadband Bits Podcast from the Institute for Local Self Reliance. I'm Lisa Gonzalez. It seems like every day we learn of yet another electric cooperative bringing high quality connectivity to rural communities. In areas with low population density, national providers don't offer high speed service and electric cooperatives are already offering electric services, so providing fast, affordable Internet access is often the next logical step. In this interview, Christopher talks with Darren Farnan, Chief Development Officer of United Electric Cooperative in Missouri. The Cooperative is working on a fiber project and in addition to talking about that, the guys discuss the logistics and financing of bringing fiber to very rural areas. Darren also gets into why it's so important and why cooperatives are picking up the slack where national providers won't serve. You'll hear Darren use the term ILEC. If you're not familiar with the term, it's an acronym for Incumbent Local Exchange Carrier. It's a telephone company that's already established and providing telephone service in a local area.
Christopher Mitchell: Hey folks. This is Chris Mitchell, the host of Community Broadband Bits. I just wanted to ask you if you could do us a real big favor to help us spread this show around. That's to jump on iTunes or Stitcher, wherever you found this show, and to give us a rating. Give us a little review, particularly if you like it. If you don't like it so much, then maybe don't do that, but if you're enjoying the show, please give us a rating and help us to build the audience a bit. Thanks.
Lisa Gonzalez: Now, here's Christopher and Darren Farnan, Chief Development Officer of United Electric Cooperative of Missouri.
Christopher Mitchell: Welcome, to another edition of the Community Broadband Bits Podcast. I'm Chris Mitchell. Today, I'm speaking with Darren Farnan, the Chief Development Officer of United Electric Cooperative in Missouri. We're going to be talking about the United Fiber Project, a broadband expansion project, that United Electric Cooperative is in the middle of. They're actually finishing up, really. Welcome to the show, Darren.
Darren Farnan: Thanks for having me, Chris.
Christopher Mitchell: One of the things that I find interesting working in this space is that people will assume if I told them that we're talking about an area in one of the most rural regions of Missouri, they would naturally assume there is not very good Internet access there. Maybe you can tell us a little bit about the United Fiber Project and dispel that myth.
Darren Farnan: At one time, your thoughts are correct. Back in 2010, when we were originally looking at this project, whether or not, as a co-op, we could apply for Reinvestment Act funds. As we did a survey of our membership, nearly 89 percent, almost 90 percent of our members, we found were either unserved or underserved with 5 Mbps broadband. We knew, obviously, being from the area, we're ingrained in the communities and ingrained in the region, and knew that there was a severe lack of broadband. Even then, when we saw the survey results, it really opened our eyes to just how big this problem was. That was the driving force behind it. Again, as you mentioned, we're such a rural area, we're in extreme northwest Missouri, we have the fortunate, or unfortunate, case of being the lowest density co-op in the State of Missouri, averaging just around 2.4 meters per mile. Everything we do, that is a challenge for us.
Christopher Mitchell: That is a remarkably low density. For comparison's sake, I think a lot of people assume that the private sector really struggles and is not interested in doing fewer than 11 homes or, as in electric parlance, meters per linear mile. That's pretty low density. You reach across six counties, I think, right?
Darren Farnan: That's absolutely right. With our fiber footprint, we do reach across six counties. We were a little bit unique in that some of our area was also served by Rural Telephone Co-op. Those were areas that we could not apply for in the original grant process.
Christopher Mitchell: We're going to get into some of those, a sense of how many of your members have access to the fiber and look forward to learning more about that. I wanted to start off with a little bit of the philosophy and little bit of the anecdotes, I think, around this and get a sense of -- You said, you had almost 90 percent of people didn't have access to what we would consider broadband at that time. Why was it important for your electric co-op to solve that problem?
Darren Farnan: Well, obviously the one thing is with co-ops, I think, really across the country, by being ingrained in those communities, we're always the part of the economic development process, I would say for the most part. I was involved with that process here in our local community. It was just the fact that we see population being a real problem. Obviously, we're losing population in these rural counties. Kids are moving off. That talent drain where they're educated here, may go to university here, but then they're off to the Kansas Cities or other areas for the jobs. We're always looking at, "How can we revitalize these areas?", because we see from the farm standpoint, where the farms are getting larger. There's fewer family farms. The small rural communities sometimes dry up. Really trying to figure out the first thing in economic development you have to do is stop the bleeding, so to speak, even before you start talking about drawing in new businesses or new people, how do you retain what you have? We felt like broadband was obviously a very critical piece to doing that and keeping people here in this region.
Christopher Mitchell: Are you seeing fruits from that? I mean, you've had in some of your areas, I'm presuming it's been multiple years of you having this high quality service. Are you getting the results that you were hoping for?
Darren Farnan: Well, you know, we started the service back in the middle of 2013. What we have done as part of this process, not only build out our rural footprint, which is what we did to begin with, we've also served a lot of the adjoining communities. A lot of small communities that have access to very low grade DSL, at best, some of them had cable services in the past, but those cable companies have pulled out. We went in and started serving those businesses especially, whether it be schools, clinics, mom-and-pop businesses, whatever that may be. We felt that has been some of the most rewarding experiences out of this whole piece is as a region we're so interrelated, whether or not we serve them electrically or not. Most of these communities, we do not serve electrically. I always like to bring up one good example of, it's a dairy. Now, this one is on our line. They had really reinvented themselves. It was a small family dairy that has grown into a large operation by doing flavored milks. They deliver throughout the Kansas City area and have really created a really successful business. When our services came out to them in the first part of our building phase, they were to the point where they could hardly even do a credit card transaction in their buildings. They have lots of visitors every year. They have a visitor center that they bring children's groups into and things like that to try all their flavored milks and tell their story. Those are the types of stories that are really gratifying. Those are the types of things that story-after-story of companies or individuals that are now able to work from home or their business because everything's gone to cloud-based. They're now able to do their business in our area. Countless stories of how's that's helped, I believe, in our region.
Christopher Mitchell: I really like that story. In part, because you're talking about a business that impacts both the urban and rural areas. I think it gets out one of the points that I always try to make when we're talking about rural broadband policy, which is that if you live in a major city, you will be better off if we make sure that everyone is well-connected. It's not the case that somehow people in Kansas City would be better off if that dairy farm had poor connectivity. Right? In fact, they're better off because of it, because people who are innovative, the entrepreneurs, we want to make sure that they can succeed wherever they are.
Darren Farnan: The largest community in our region is St. Joseph, Missouri, which is about 75,000 people, but we've gone in there, even at the request of the major healthcare provider there. They wanted us to connect some buildings. That provided such a great opportunity. We do have some nursing home facilities, some clinics, either on our line or in small communities where some of the broadband is challenged. We look at it that, "Hey, we're able to connect this major provider to all the other providers in the region whether or not it may even be one of their affiliated clinics or one of their affiliated locations. What does that do now for the potential of telehealth?" Whatever that may be, as those services become available, not only are we filling an immediate need, I think we're also putting a possibility in place that really allows for the growth of what broadband services can provide out to these rural markets.
Christopher Mitchell: Let's talk a little bit about the number of people involved. How many households and businesses are in your area? How many of them are able to take service from you?
Darren Farnan: Well, our original footprint, when we built our rural market, was about 4,500 homes. Since then, we have, just over this last year in 2016, we completed our first community build, which is a municipal that is on the fringe of our area.
Christopher Mitchell: When you mention municipal, you mean there's a municipal electric provider that then welcomed you in?
Darren Farnan: Correct.
Christopher Mitchell: It's always good to hear that because I know sometimes different electric providers may not be super-friendly across their boundaries. That was a community that already had both DSL and cable or one or the other?
Darren Farnan: Correct. Also, looked at a community that was a non-competitive market as well. We're just ending the completion of the competitive market for the municipal electric community that we had. Then, we're also in the middle of completing the small community that we looked at from a full Fiber-to-the-Home residential build. What we have seen is, in the competitive market, are take rates have been very strong and growing quickly. The one interesting thing I'll say about the non-competitive market, the small community that we went in, there's a little over 400 homes in this community. We went in on the first night, went over to start getting sign-ups, and this was this summer at a community event, thinking that we would start off maybe with 20 or 30 sign-ups that night. I know we hit our pre-registration mark that very evening. We had over 80 people sign up in one evening for service because they're so desperate for some type of service that will allow them to do Netflix and all the other things that people want to do with a good broadband connection. I think we're seeing, depending on whether it's a competitive market or a very poorly served uncompetitive market, that desire, that need for better bandwidth is really driving that take rate.
Christopher Mitchell: How does it work where you are dealing with a cooperative telephone provider already in your territory? How do you work that out?
Darren Farnan: Typically, what we have done is because, again, they faced the very same rural issues that we serve with the low density, that because we were both really utility borrowers, we did not -- Obviously, we could not even request funds in those areas for the original Reinvestment Act. While we have crossover in some fringe areas, we typically don't have a lot of crossover there. They have typically done a better job of reinvesting in their markets than what the large ILECs have done. We try to focus our efforts, what we can do, on those markets to me that are the most poorly served and most challenged and really have the least hope of ever really getting good broadband service to their market.
Christopher Mitchell: Obviously then, there are people within your electric territory that do not have fiber service from you, but they may have service from one of those co-ops that you just mentioned. Is there anyone within your territory that just doesn't have service today?
Darren Farnan: There still are a few. That's why we have, within the original footprint, because again, we were a very small co-op. We only have about 10,000 meters total and because of our density, we looked at that primary area of the ILEC provider that provided in our region. Now, there still are a few pockets, what I would call "ILEC customers" or "large ILEC customers" that are also members. We are trying to work through ways to get to those members as well. We're always looking for opportunities. Obviously, with the Connect America Fund, some of the things that are happening with that, we're staying on top of that situation and trying to get any funding help that we can get. Also, as we become more successful with what we've done in some of these communities, especially from a business standpoint, which has been surprising, honestly, as to how much demand there's been there from the business sector. It's really helping us as far as speed up our timeframes from what we originally thought on our income statements and that sort of thing. We're really hoping to take that money and eventually reach those pockets. We tend to serve those now with wireless or with satellite services, but honestly, that's what we're trying to do is get as much fiber out there as we can.
Christopher Mitchell: As a co-op then, would you feel that your mission is ultimately to make sure that everyone has equitable service in the end?
Darren Farnan: That is definitely our goal is to make sure that everyone we can reach realistically, obviously, without threatening the financial stability of the co-op, that we're out there aggressively searching for ways to do that. The other thing we have found that I'll just add to that, is the one thing this has allowed us to do, now with more fiber capacity, and we have fiber to most of our substations and those areas now as well, it has allowed us to improve our wireless services. In those areas, those pockets, we are trying to continually reach those with wireless in the short term until we can get either additional funding or other ways to reach those members.
Christopher Mitchell: Let's talk about that wireless. How long has that been going on?
Darren Farnan: Honestly, we have been doing wireless services since, gosh, in the early 2000s. It was when we worked with a neighboring co-op. As a matter of fact, Randy Clint, I believe, who's been on your show before, was at a neighboring co-op. We have worked together for a long time. We piggybacked off of his wireless network to start extending wireless services to our members well before we even thought about fiber services or anything like that. We have been working at that for a long time and continue to look for resources and access. It is a more challenging model in and of the fact that the equipment changes fairly regularly. There have been real strides made in that market to where we're able to provide much better bandwidth, much better services to that end user. Again, you still have some terrain issues where we have rolling hills, trees, that sort of thing. It's hard to provide 100 percent coverage with wireless but where we can, where we can fill that in, we feel like we're bringing those members a much better service than what they would have, again, with any low grade DSL or satellite service.
Christopher Mitchell: What kind of capacity can you offer now? You're mentioning that it's better now that you can do some of the back hole with the fiber. What kind of speeds can you offer to a person out there in those areas?
Darren Farnan: We're seeing we can easily offer 10 Mbps services and often up to 25 Mbps services, again, depending on the distance from the tower or wherever that access point resides to that customer. That's basically given us the potential to get a much better, a real broadband service to them, whereas in the past, that was usually a lower bandwidth service that while it would suffice for the needs. As we've seen, the demand has grown so much that we are able to add it, at a good price, and at a good service level, provide wireless service again, in the interim, at least to get these people on a service that they can use.
Christopher Mitchell: Right. That's for, I mean, a lot of people in these kinds of areas, that's incredible because that's the difference between their children having a good ability to learn in school, doing their homework, and accessing educational materials. Also, if they want to sell their home, making sure that they can get a good value for it rather than having to price it way lower because no one wants to move into a home where they can't stream Netflix is what I hear from the local folks.
Darren Farnan: Absolutely. You know, it really becomes an issue of -- What a lot of it is capacity. That's what we tend to focus on speed and things like that so much, but what we find is, that some of our folks on satellite, the speeds are fine. That's not the problem, but latency and then capacity, and if you go to stream Netflix or if the kids are downloading a lot of material, looking through YouTube or whatever it may be, you just hit those bandwidth constraints. At least with our wireless service, that's something that, especially when they're fiber-fed, when we have that fiber backbone to feed those wireless services, that really opens up the potential for us to not worry about usage caps and those sorts of things that they might experience on a satellite service. That's why we see those as being so restrictive. I sometimes compare that to, they say in that pretty red sports car, that you can only drive it about 40 mph. It's one of those things that we really look at the wireless as an extension of the fiber service to reach out in areas that maybe unattainable to us right now from a financial standpoint, but that we hope we can push out into further-and-further with fiber as time progresses.
Christopher Mitchell: I want to note that you mentioned a wireless person might be expecting a 10 to 25 Mbpsabit service as the new fixed wireless that you're contemplating, but you're pushing a Gig to people that have Fiber-to-the-Home and at a very reasonable cost, $100 a month, is what I'm seeing on your website.
Darren Farnan: That's right. The one thing we're seeing in usage trends and things like that as well, or what I should say is, customer preference. When we first started this business, and I think you'll see there that our minimum package on fiber is 25 Mbps. What we saw originally was that over 50 percent of our customers were taking that base service because it was, obviously, such an advancement from what they'd had before. As time progresses and as we keep moving forward, we've seen a real change in that. Now that we're seeing almost 70 percent of our customers either take 100 Mbps service or above.
Christopher Mitchell: Wow!
Darren Farnan: I think that's telling the story of what that real demand is out there. One other thing I'll add to that as a managed wireless service, I think obviously we feel like this doesn't end at making the fiber connection to the side of the house. This really ends up at the antennae inside the house. We look to provide a managed service we call, "Unify." Since the first of the year as well, we've been tracking this. When I say, "the first of the year," I'm talking about 2016, nearly 70 percent of our customers have taken this managed wireless service. Even though they may have a router in their house, they want that service in the house to be as high level as possible. That means to reach the kids' bedroom, the basement area, wherever that may be. They want ubiquitous service throughout the house and they don't experience speed drops or service drops. We're really trying to make that a priority is to make sure we manage that experience inside the house, not just getting fiber to the outside of the house.
Christopher Mitchell: I think one of the reasons you probably have such a higher uptake is that your pricing is totally reasonable. It's $50 a month for the 100 Mbps service. One of the questions I always have is, "Do you foresee having to raise the cost of these tiers over time or is technological change driving the cost down and allowing you to basically expect to keep that price steady over time?"
Darren Farnan: We're really -- Our goal is to keep that price steady. I think, obviously, when you're in a small rural market like what we are, we've found that, and I know others have, some other co-ops that have looked at this business, sometimes getting that back haul is difficult into your head and getting it at a price that can make these types of services available at an effective rate, like we believe we provide. We've seen that continually come down. We talk about the value of the network. I think the more you expand, the more that network's out there, the more opportunities arise. We've found as we've gotten into some of these other communities, we've been able to make interconnections with other folks, with other providers that are allowing us to actually drive down our wholesale costs even though the demand from the customer side is going up. We believe that we can hold the line on our data prices into the future.
Christopher Mitchell: That's what I like to hear although I know that myself, as a Comcast subscriber, I'll be paying more every year or two because they know that I'm not going anywhere else.
Darren Farnan: Right.
Christopher Mitchell: I'd like to talk a little bit about the cost of building such a great network out across such a rural area. Do you have a sense of the cost per average house?
Darren Farnan: Because we've done such a mix now of rural and residential, obviously our rural market was, like I said, towards the upper end. When we originally looked at the applications through RUS was towards that $5,000 threshold per home, which is obviously on the high end. That has drastically come down as we've gone into some communities obviously, where we've picked up both business and residential to help drive that average cost down. You know, cost is always an issue. These are expensive networks to build. There's no doubt about it, but we've made that investment. Our outlook from a Comcast or our outlook from a CenturyLink is totally different. We're investing in the region. We're used to long term investments. For us, honestly, fiber service compared to our electric service, is a very solid investment. We believe, even though we don't need three and five year paybacks like most of the competitive carriers do, we still have to have a payback at the end of the day. I think we're able to do things, we're able to invest differently, we're able to invest long term. We're able to, just because we're the only provider in the area, does not mean we're going to raise a price because we can. We're looking to make our region as competitive as possible and that's the real difference, I think, between what a co-op provides and what a competitive carrier provides.
Christopher Mitchell: To some extent, I wonder if when you look at this, doesn't the investment in fiber in improving the economic viability of the region, improving the quality of life, doesn't that really make your electrical future more safe? I mean, I would think you have long term power purchase agreements. The more you can do to make sure that people are going to want to live in your area, that's just better for your other line of business.
Darren Farnan: Absolutely. It's about the region. We've invested, even in areas again, where we don't provide electric service, but we know that if you don't have those small communities, where do those people go? They're not staying in the area potentially. We feel it's just as critical to bring these small communities up to speed as it is, our rural members, and I think again that's the approach. It's a regional approach. It's a regional focus rather than just looking at what benefits us as a company the most. Absolutely, that is why we're investing in the region is to try to revitalize, try to keep those folks where they are, give them the tools to do either the type of business, telecommute, whatever that may be, that they're wanting to do, give them the tools they need to live their life. You mentioned quality of life, and that's really a part of our Mission Statement, is to improve the quality of life to the members we serve. That's exactly what we feel like these types of projects do.
Christopher Mitchell: In talking about the Connect America fund, I'm curious, and some of the conversations I've had with John Chambers and Randy Clint and folks that are working electric utilities is that you all can be much more efficient. You seem to be able to extend fiber at a lower cost than what, particularly, the big companies are doing. You look at CenturyLink to pick on one. Just looking at them recently in Wisconsin and Minnesota, and it seems like, if we gave you the money that they're getting in some of these areas, where they're just doing DSL. I get the sense that you could probably do fiber over a long period. Am I overstating that?
Darren Farnan: Not at all. As a matter of fact, I think that is probably one of the most frustrating pieces. As the more we've gotten to know about how rural broadband is being funded, it is frustrating because typically what is happening is, that these things are being funded to some of the larger ILECs and it seems like they're just meeting that next threshold of broadband, whatever that means. Obviously, we know now that the FCC defines that as 25 Mbps down and 3 up. Just a few years ago when we were looking at the beginning of our project, that was defined as 4 down and 1 up. If we keep putting a patchwork quilt out there, so to speak, to try to keep up with broadband service by using outdated copper whenever we could run fiber at a one time expense, often cheaper than what the incumbent can, there's a problem there that it's not being done. That's what we're trying to rectify. There's about 900 co-ops in the country, rural electric co-ops nationwide. They cover about 70 percent of the land mass of the United States. There's already existing infrastructure there. While there is make ready cost, there's things that you have to do to your existing plant, you're talking often, at the very least, half the cost of running underground service, often closer to a third of the price of underground service from what we've seen on our own numbers. Again, that can vary slightly, you know, depending on the quality of your infrastructure and the things that each individual co-op would have to do, but, for the most part, yes, that cost is extremely lower than what a large ILEC carrier, another carrier that is putting in all underground service would have to provide. People say, "Well, it's an overhead service." Well, absolutely, and that same overhead service has provided electric service to rural America for the last 75 years, businesses, whatever it may be, our people are used to keeping the lights on. I think the very same motto or the same ethos would apply to broadband service as well.
Christopher Mitchell: I think for my last question, there's so much more I'd like to ask you, but since you do both electricity and fiber, people talk as though fiber's the most expensive thing in the world. Can you give us a sense of how it compares to building and operating electrical networks?
Darren Farnan: Honestly, it's become a fraction of the cost of what we would see on a new mile of electrical construction. The other thing we can find is that we're running fiber on existing infrastructure already so we're not necessarily putting up new poles. We'll run a new carrier wire, but for the most part, we're not adding large structure. We're adding basically a carrier, a messenger, and a piece of fiber. Typically the fiber itself, by the foot, is relatively inexpensive. The network itself, the labor, those are the things where you add your cost up. For the most part, again, we're talking a fraction of the cost of what it would cost to build a new mile of existing plan. For these co-ops that are looking at providing this over their existing infrastructure, it's a much different economic outlook than what it would be to go out and build all new plant for a provider that's just looking to go into a new area.
Christopher Mitchell: One of the things that I just want to get a quick take from you on, is there's a sense from some people that we shouldn't even try to bring fiber out to everyone. When I talk to folks like you, where you're doing this at less than two-and-a-half people per mile, I've got to think, "We can actually get high quality networks out to everyone in this country if we put our minds to it and at a reasonable cost too." Am I crazy?
Darren Farnan: No, absolutely. I think we're proving it. Cosmos proved it. There's been others building these networks throughout the country. This is not a phenomenon to Missouri. This is not a phenomenon to another state. This is really just about a local business of taking initiative into their own hands and building a service that their membership or their communities need. We don't feel like we necessarily recreated the wheel here. There's models out there. It can be done. Again, if for a co-op that's as rural as us, if CAP funding or other services that are being spent already, when those dollars are being spent to provide again, a low grade 10 Mbps service, we feel like that money could be much better used investing in one-time shot into fiber. Now, the possibilities are virtually endless on what you can do. As you said, we're providing gigabyte service in extremely rural America for $100 a month. We're providing 100 Mbps service for $50 a month. If we can do that here, I think it can be done all across the country and be replicated. I'm a firm believer that you're absolutely right. This can be done through our type of initiatives and can be replicated throughout the country.
Christopher Mitchell: To be perfectly clear, you have no operating subsidies. You operate this network entirely on your own without any outside money, without any subsidies from the electrical side. There are some capital one-time subsidies to build the infrastructure, but then you can run this constantly just on the revenues it generates.
Darren Farnan: Absolutely. That's exactly how we have to look at it. We, like you said, we've had capital infusion from the electric side to help generate this, to help start this business, but this business is now standing on its own. We've actually become profitable in less time than what we had even expected on our original balance sheets. Again, that's not necessarily the driving force to what we're doing. We're out there trying to get a service out with a long term approach, but we've found it's even surprised us with the demand we've had from both the residential and commercial side, how much opportunity has come to us, just by having this network in place. We are constantly getting more requests to build further-and-further-and-further. The demand is there. Us, with others, have shown that the model can be successful. Again, I believe it can absolutely be done. I think it needs to be done or if not, rural America's going to left behind. We're already seeing it and the numbers are there. The FCC still says that nearly 40 percent of rural America does not have access to the 25 Mbps broadband whereas about 4 percent of urban America does. That number has been pretty constant for the last two to three years. What little we're doing here to try to help that in our region and in our area, I think if we could get a ground swell to keep pushing that forward with the other cooperatives throughout the country, I think we can really start making a dent in the needs for rural America.
Christopher Mitchell: Thank you so much for coming on the show to tell us some more about the United Fiber approach.
Darren Farnan: You get, Chris. I appreciate your time.
Lisa Gonzalez: That was Christopher and Darren Farnan, Chief Development Officer of United Electric Cooperative of Missouri. We have transcripts for this and other Community Broadband Bits Podcast available at MuniNetworks.org/broadbandbits. Send us your ideas for the show. Email us at podcast@MuniNetworks.org. Follow Chris on Twitter. His handle is @CommunityNets. You can also follow MuniNetworks.org's 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. Thanks to Admiral Bob for the song, Turbo Tornado, licensed through Creative Commons. Thanks for listening to Episode 240 of the Community Broadband Bits Podcast.Tags: transcriptrural electric coopmissouri
Jonathan Chambers from Conexon works with rural electric cooperatives as they bring high-quality Internet access to rural America. When he spoke with Christopher for episode 229 of the Community Broadband Bits podcast last November, he had some choice words to say about how the FCC chose to continue to subsidize big telcos for little return.
They Propose "A Huge Mess"
In a recent post on the Conexon blog, Chambers analyzes “The New Trumpfone Program,” and reveals how proposed Connect America Fund (CAF) subsidies, when applied to real world data, creates outrageous financial waste. While providers can receive up to $17,500 per location in CAF funding, when applied to a per subscriber formula, the figure is $100,000:
There are no U.S. communities where satellite or fixed wireless provides broadband to 100% of the homes and small businesses. Not 80% either, which is the FCC assumption. Not 50% or 25% or 15% or 10% or even 5%. The FCC has data on this. Let’s say, for this arithmetic exercise, that a satellite or fixed wireless subscriber achieves a 15% market share of telephone and broadband service in a rural community.
A 15% market share while receiving $17,500 for every location in an area translates into over $100,000 per subscriber. Should there be insufficient competitive pressure in the auction, the $17,500 per location is a realistic outcome, as is the likelihood of $100,000 per subscriber by some technologies.
Reimburse Per Subscriber
Chambers offers a sensible solution to save CAF funds and direct public dollars in the right direction: reimburse providers for actual subscribers, rather than by location.
The most perverse subsidy incentive is one by which a provider makes more money by not serving customers. That’s the current FCC plan and the basis of many current FCC subsidies. By definition, the high cost subsidy is based on how much a provider is calculated to lose per customer. When the FCC provides funding by location, rather than by subscriber, some technologies will make more money by winning the auction, collecting public funding, and serving no one. Hence the fallacy of the argument that it is less expensive to cover rural America with certain cheaper and less capable technologies. If rural America doesn’t subscribe to the less capable services, then the FCC is adopting a classic penny-wise-pound-foolish program.
Having worked with rural cooperatives, Chambers and Conexon have learned the same thing we have - that rural American want access to the same high-quality connectivity available in urban centers. It’s an incorrect and insulting stereotype that people who live in the country don’t want fast, affordable, reliable connectivity when in today’s economy geographical distance necessitate the ability to go far online.
Let The People Decide
If subscribers were able to control where their share of CAF funding flowed, waste and an incentive to leave out certain rural areas would dramatically decline. Chambers recognizes the power of local subscriber choice and, in this case, it would put a realistic and multi-dimensional value on that $100,000 Trumpfone:
The elegance of this solution is that it relies on people who live and work in rural America to choose their broadband future. It permits multiple technologies and providers to compete for customers, rather than rely on a company’s lobbying strength. It permits the evolution of technology, rather than consign rural America to today’s level of technology. It saves the public money, because it would use the current FCC budget applied to subscribership, rather than total covered locations. Most important, it would unleash private investment now, rather than delay yet again this portion of the Connect America Fund while the FCC begins a multi-year auction process.
Read the full story on the Conexon blog.Tags: federal fundingsubsidyincumbentconnect america fundruralrural electric cooptrumpfcc
Electric cooperatives are increasingly creating local solutions to rural connectivity woes. Many have built networks that rival those in the best connected cities in the U.S. Rather than waiting for disinterested national providers, cooperatives and their members have found workable solutions.
In south-central Missouri, the Sho-Me Power Electric Cooperative is once again exercising the power of community network projects. The Houston Herald reports that Sho-Me Technologies, the communications subsidiary of the co-op, is deploying a fiber-backed, fixed wireless project to connect businesses in Houston, Missouri.
Houston, We’ve Got A Problem
Houston (population: 2,000) is the capital of Texas County, Missouri -- yes, Missouri. Home to about 25,000 people, the rural county has poor connectivity; about 90 percent of the county’s population doesn't have access to high-speed Internet service of 25 Mbps download and 3 Mbps upload. The Houston Herald reports that speeds of up to 10 Mbps download are the norm in Texas County. Upload speeds are even slower.
The situation has been rough for small businesses in Houston, where they could not perform routine updates without impeding service. For instance, the local dentist office, Family Dentistry, could not accept Microsoft updates for its network without disrupting daily operations at the practice.
Downtown Houston Finds The Local Co-op Solution
The community group, Downtown Houston Inc, was on the look-out for a solution to this problem. Sho-Me Power already had fiber connecting the County Administrative Center from a previous project in the town and all small businesses needed was a way to tap into that community resource. Downtown Houston Inc began talks with Sho-Me Power's subsidiary Sho-Me Technologies in September 2016.
Paramount was finding a quick and reliable solution; for this situation, fixed wireless appeared to be the best option. In mid-December, cooperative technicians began installing the wireless receivers on the businesses’ buildings. Ten businesses chose to take part and report download speeds up to 100 Mbps on the new network. Sho-Me Technologies guarantees each business at least 30 Mbps.
Family Dentistry has shifted to an entirely paperless system.
Sho-Me Power has long been a pioneer, showing how electric cooperatives can improve Internet access. Several years ago, Sho-Me Power built a middle mile network and connected community anchor institutions such as schools, libraries, and government facilities throughout south-central Missouri. Sho-Me Power is a collaboration among nine rural electric cooperatives, and several are excited about the results in Houston.
Representatives of several of these member electric cooperatives visited Houston to learn more about fixed wireless solution. Intercounty Electric Cooperative, the electric provider for Texas County and a member of Sho-Me Power, is especially interested. Intercounty CEO Aaron Bradshaw told the Houston Herald that they are considering similar fixed wireless solutions to reach homes of co-op members.Tags: rural electric coopcooperativefixed wirelessmissouricollaborationrural
While people in rural Washington State continue to limp long on DSL, satellite, and even dial-up, two bills in the state legislature that would have allowed public utility districts (PUDs) to offer retail services stalled in committee.
Rural Areas Need Retail Service From The PUDs
State law requires PUDs to adhere to the wholesale-only model so rural residents and businesses can't obtain the connectivity they need because national providers don't offer high-quality Internet access in those regions. If no providers are interested in working with the PUDs to lease fiber infrastructure to serve rural areas, potential subscribers in the hardest to reach areas are just out of luck. These two bills would have filled the gaps by allowing PUDs to directly serve customers.
One Step Forward
HB 1938 was reviewed and there was some testimony in the House Technology & Economic Development Committee, but no vote. The Senate companion, SB 5139, was never picked up in the Senate Energy, Environment & Telecommunications Committee. In order for the bills to advance, they needed to pass out of their referred committees by February 17th.
Even though these bills failed to move forward, the fact that they were introduced and one obtained attention from committee members is encouraging. If you live in rural Washington, you understand how difficult it is to obtain fast, affordable, reliable connectivity. You don’t need to wait until a bill has been introduced to contact your elected officials to let them know you support state policies like HB 1938 and SB 5139; they want to hear from you all year.Tags: washingtonpublic utility districtsretailwholesale-onlylegislation
Schools in Greenville, Tennessee, are about to save on Internet connectivity to the tune of $50,000 per year, thanks to a partnership with the municipal electric utility.
Local Utility, Local Solution
Greenville City Schools (GCS), which obtains Internet access via the state’s Education Networks of America (ENA), used to obtain cable connections from big providers that worked with ENA. Comcast and CenturyLink are two of the local providers that lease lines to the schools with ENA as the entity that arranged the connections. Not anymore.
GCS, ENA, and the Greeneville Light & Power System (GLPS) have entered into a new partnership to use GLPS fiber-optic infrastructure to bring Internet access to school facilities. As a result, the school will cut telecommunications costs by approximately $50,000 per year and double their capacity.
Assistant Director of Schools and Chief Technology Officer Beverly Miller told the Greeneville Sun:
“GCS is extremely pleased and excited about moving network fiber optic cabling dependence to the local community power provider. GLPS is an exceptional electrical provider with a stellar reputation for reliability and high performance. In addition to the expectation of improved service, the school district anticipates significant financial savings as a result of this new partnership.”
According to GLPS General Manager Bill Carroll, the utility already had significant infrastructure in place, which it uses for its own facilities. Connecting GCS schools and administration facilities wasn’t a difficult undertaking. In fact, GLPS hopes to reproduce the plan for the Greene County Schools to reduce their costs in a similar fashion:
“We have 2,200 miles of high voltage (power) lines and just 60 miles of fiber, mostly in the city,” Carroll said. “We’ve been routing fiber very carefully to pass by government buildings, schools and other folks we can serve in the future. At some point, we can do the same for Greene County’s schools and government buildings, but it’s a matter of logistics.”
Starting With The Schools
When local schools reduce costs by partnering with municipal utilities like GLPS, they are able to redirect connectivity dollars to other areas that need funding. It’s also easier to budget when a school district can anticipate future costs. Large corporate providers such as Comcast and CenturyLink often raise connectivity prices unexpectedly, but GLPS is likely to keep prices steady. Unlike the national companies, a municipal utility’s first priority is to provide a local service.
Schools are often some of the first entities that benefit when a community chooses to connect public facilities or anchor institutions. Sometimes schools use E-rate federal program funds to pay for infrastructure investment and partner with local government. Over the long term, schools can save millions, get much better services, and take control of their budgeting.
Martin County, Florida; Erie and Ottawa in Kansas; and Monticello, Illinois, are just a few examples of creative partnerships that involve school districts and local government. The results? Millions of public dollars redirected from the cost of leased lines to educational programs.
Greenville, located in the northeast section of the state, is home to about 15,000 residents. The city, named in honor or of Revolutionary War hero Nathanael Greene (“The Fighting Quaker”) is steeped in history. President Andrew Johnson began his political career here by serving as alderman and mayor and the community’s historic district still maintains a number of historically and architecturally significant buildings. Greeneville is the county seat.
GLPS serves about 37,500 customers in Greene County but also reaches portions of Cocke and Washington Counties. The city started the utility in 1945 after it had purchased a power and light company from the Tennessee Valley Authority.tennesseeschoolschool districteducation networkeducationleaseelectric