Frequently Asked Questions

Following are frequently asked questions about the Syracuse Community Broadband Initiative and related subjects. This FAQ will grow and become more refined over time. So you are encouraged to check back on occasion.

1. What does broadband mean?
2. What is being proposed?
3. What does it get me?
4. How does it benefit the community?
5. How will it improve universal access (bridge the digital divide)?
6. How will local businesses benefit?
7. Will local government benefit?
8. Why community-owned?
9. Why is community control of broadband services so important?
10. If the service is community-owned, will the city lose the 5% cable franchise fee revenue?
11. How else might community-owned service affect tax revenue?
12. Why a fiber-optic network?
13. How will the network be financed?
14. What does "open access" mean?
15. Wouldn't federal stimulus grants to a community-owned utility create unfair competition?
16. Won't a community-owned network be unfair competition for private networks?
17. Won't subsidizing a community-owned service eliminate market competition and create an inefficient bureaucracy?
18. Could the community-owned service be a wholesale-only provider, and let private companies provide retail services competitively?
19. Do we need a community-owned FTTH network if Verizon is creating one?
20. Isn't it redundant and a waste of resources to build two FTTH networks in parallel?
21. What is Net Neutrality?

---

What does broadband mean?

Broadband typically refers to high-speed digital communications. But it is also used in reference to "telecom" or "telecommunications" services, because TV, Internet, and phone services are now using the same technology, Internet technology.

For the extra curious: "Broadband" presumably derives from "broad bandwidth" in reference to a wider band of radio transmission frequencies, to transmit a more detailed analog signal. In the case of digital transmission, it moves data faster ("broad" or "big pipe" envisions a bigger stream of data, but it's really just a faster stream). Finally, "tele communications" means communications at a distance. It is interchangeable with today's use of "broadband". Maybe "telecom" will return in fashion. For now, however, "broadband" seems all the rage.

What is being proposed?

The creation of a publicly-owned broadband utility offering 100Mb/s–1Gb/s fiber-to-the-home (FTTH) network with city-wide wireless access on top (wireless technology to be determined). The utility would offer TV, Internet, phone, and possibly other services. The network would be open access.

What does it get me?

Significantly (30+%) lower prices for TV, Internet, and phone service, and more flexible service options; super high-speed Internet for gaming, video-conferencing, home businesses, tele-education, and telemedicine. See also the project page

How does it benefit the community?

It will provide well-equipped public access studio(s); generous funding for public access, education, and government (PEG) channel programming; access to multiple additional local programming channels; and community control of prices, services, policies, and infrastructure investment. We also plan a Community Media Center to manage the resources above plus provide access to public computer clusters, computer training, and much more.

How will it improve universal access (bridge the digital divide)?

Universal access is at the core of our public mission. This means not only connecting every household and business, but also providing service options and rates that all can afford. In addition, the planned Community Media Center will provide free computer training to those who need it.

How will local businesses benefit?

Business customers will enjoy lower prices just as residential customers. Some businesses that require very high-speed service at low cost will benefit tremendously. More generally, a state-of-the-art, low cost broadband network will help attract new businesses and people to the area and help put Syracuse in the national spotlight as a progressive and high-tech city.

Will local government benefit?

Yes. City, county, and school district will see greatly reduced telecom related expenses, and greatly increased service capabilities and flexibility from having consolidated and unified in-house services.

Why community-owned?

A community-owned network has no profit requirements; it can charge less and offer more services and greater public access. The decisions on prices, services, policies, and infrastructure investment are made to maximize the public good, not the profits of a private company.

Why is community control of broadband services so important?

Private operators charge high prices for big profits, are unresponsive to community preferences, force customers into expensive service bundles as opposed to offering a-la-carte selection, and degrade quality of service or charge extra fees or deny access to certain (often competing) data services. Without appropriate regulation (or creating a community owned and controlled service), we will be at greater and greater mercy of private broadband operators. Our local broadband (TV, Internet, phone) infrastructure is crucial to the social, economic, and democratic health of our community. We are foolish if we do not take action to secure public control of our broadband network.

If the service is community-owned, will the city lose the 5% cable franchise fee revenue?

No. The current 5% franchise fee charged to Time Warner Cable is passed on to customers by Time Warner Cable. We pay it. A community-owned service can continue to charge that fee without raising rates.

How else might community-owned service affect tax revenue?

All taxes would be paid. In addition, any surplus revenue would flow to additional community services or to extra discounts to subscribers. A community-owned service would surely provide more benefits to the city than would a private operator.

Why a fiber-optic network?

It actually costs less today to build and service a new fiber-optic network than a new copper-based network. A fiber-optic network has around 100 times the capacity of copper and continues to improve rapidly with the electronics. Fiber networks are "future proof". Fiber is the fastest, most reliable technology available. Of course, the community-owned service will also include wireless service.

How will the network be financed?

The community-owned utility will be funded with subscriber revenue. It is an income generating operation. Network build-out and startup can be financed with Revenue Bonds. This is what both private and public utilities typically use. It's low cost and available. In addition, some parts of the network and community programs may qualify for federal broadband stimulus grants (also available to both public and private entities).

What does "open access" mean?

It generally refers to a network that is operated as a "common carrier", which means it allows any business, including businesses offering competing services, to use the network, and charges usage fees in a non-discriminatory manner.

Wouldn't federal stimulus grants to the public utility create unfair competition?

No. The grants are available to public and private entities.

Won't a community-owned network be unfair competition for private networks?

No. The publicly-owned network will be paid for the same way as a privately-owned network: with subscriber revenue. For initial financing, private companies can sell company shares or issue bonds. A community-owned utility can only issue bonds, usually "revenue bonds", which are available to both publicly-owned and privately owned utilities. Note that shares don't have to be repaid (shares are perpetual, not redeemable), while bonds must be repaid. So a private company has the financing advantage. Moreover, a community-owned utility would be subject to additional burdens, such as local regulation of prices, services, coverage, and investment.

One further important point. Even if a community-owned utility were financed completely with taxes, and operated completely with taxes, it would be our prerogative as a community in a democratic society to choose such an option, just as we have chosen to fully fund public roads and public schools with taxes. Consider also that societal choice created the laws establishing privately owned corporations, who's shareholders have limited liability, and which receive far more generous tax accounting than individuals, and which receive 100s of billions of dollars in various types of government subsidies every year. It's the big corporations—Time Warner Cable and Verizon—who have the advantage. The only market advantage of a community-owned service is its public-interest preference to provide maximum service at minimum price.

Won't subsidizing a community-owned service eliminate market competition and create an inefficient bureaucracy?

The community-owned network will not be "subsidized"; it will be paid for with subscriber revenue. Moreover, surplus revenue (profits) will flow to the community. Such network would generate more revenue for the city than any private network would. Also, the network will be open access, which means other companies can use it to offer competing or other services. The city franchise agreements for "cable system" service are non-exclusive. If the competition should be "eliminated" it will be a measure of the superior product and service and efficiency of the municipal utility.

Could a community-owned service be a wholesale-only provider, and let private companies provide retail services competitively?

It could. But that is a dangerous business model for a startup competing against established incumbents. It makes the service completely dependent on the ability and actions of its resellers. Moreover, it deprives itself of the more lucrative part of the business: retail services. It also relinquishes control of retail services and prices, the whole purpose of becoming community-owned. Finally, the wholesale and multi-vendor retail model is less efficient because it incurs much higher expenses from redundant management, business systems, and wasteful sales and advertising. A survey of communities with this system will show that their prices and services are no lower than average.

Do we need a community-owned FTTH network if Verizon is creating one?

Yes, because Verizon is not subject to community regulatory control of prices or service options. It can restrict, degrade, or charge more for the transmission of data traffic whenever it chooses. We need a community-owned broadband service because the federal government has decimated our regulatory authority over privately owned broadband networks.

Isn't it redundant and a waste of resources to build two FTTH networks in parallel?

Yes, it certainly is. We suggest Verizon reconsider their plans. We suggest they sell what they built so far to a new community-owned utility. Or they could submit their service to substantial local regulatory control. In exchange we could assure them a modest but reliable profit.