The Minnesota Public Utilities Commission is hosting an informational meeting on Thursday, January 12, at 1:00. For those who cannot make it in person, it will be webcast here. The PDF announcement is here.

The Minnesota Public Utilities Commission will convene an informational meeting in the format of panel discussion to examine the implications of the FCC Order with respect to (i) universal service funding, (ii) intercarrier compensation and (iii) the substantive and procedural tasks that the Commission can be expected to face in the coming months. The meeting will commence with opening remarks by Commission Chair Ellen Anderson and Commissioner Michael Rothman of the Minnesota Department Commerce. The panel discussion will be moderated by Commissioner Betsy Wergin. The panelists are:

• Jeff Lindsey; CenturyLink
• Brent Christensen; Minnesota Telecom Alliance
• Dan Lipschultz; Moss Barnett PA, competitive carrier perspective
• Tom Cohen; Kelley, Drye Warren LLP for the American Cable Association
• Dave Conn; T-Mobile
• Dennis Ahlers; Minnesota Department of Commerce.

The Commission will welcome questions from attendees as time permits.

I would have specifically liked to hear how the rural telephone coops would be affected by the inter-carrier compensation changes as those charges have helped many rural communities gain access to broadband. Apparently, the MTA rep will represent their viewpoint.

A new documentary from California explores the failure of the private sector and competition more generally to sufficiently invest in fast, affordable, and reliable access to the Internet.  It comes in three parts and runs about 25 minutes in total.  

This provides a good summary of the present broadband landscape and how AT&T, Comcast, and other major providers are not the answer to our increasing need for better connections to the Internet.

 

One of our kindred spirits across the pond reached out to me after I wrote about Vermont's self-funded community network. The B4RN initiative, Broadband for the Rural North, has launched using a coop model that will offer 1Gbps connections to everyone in the covered territories. The business plan is available here.

Broadband for the Rural North Ltd has been registered as a Community Benefit Society within the Industrial and Provident Societies Act 1965 (IPS), and is controlled by the Financial Services Authority. Shares will be issued to provide funding for the project and members of the community will be encouraged to subscribe to the share issue. The share issue will comply with the Enterprise Initiative Scheme established by HMRC to encourage individual share holdings in new and developing companies. Under certain circumstances investors could reclaim 30% of the value of shares produced. As a community company, the project will be funded and to a greater extent built by the community for the community. Our ambition is to keep expenditure, where possible, within the community. In addition to purchasing shares, the community will have the opportunity to “purchase” shares in exchange for labour and materials during the project build. The initial share offer will be £2,000,000 of shares with a face value of £1, to be launched in late 2011 and open for 1 year. The project is expected to commence on site in early 2012 and completed by the year end. The initial network will be progressively added to over subsequent years until approximately 15000 properties in adjoining rural parishes are completely connected to the FTTH network.

To keep costs low in their rural areas, B4RN will be taking a non-traditional approach:

B4RN will adopt a different approach; we will lay the duct not on the highway but across the farmland on the other side of the wall. Digging a narrow trench and installing a duct within it is dramatically less expensive across private farmland than along the highway.

The nDanville network of rural southern Virginia has long been a favorite of ours (previous coverage is available here). The network has helped Danville go from being notable for having the highest unemployment rate in Virginia to being ranked as the third top digital city in the nation, according to a recent article. Danville's City Manager was honored by the Southern Piedmont Technology Council for developing the nDanville network:

Danville City Manager Joe King received the Chairman's Award for his leadership in advancing the development of a modern telecommunications infrastructure in the region, a key factor in Danville's economic development renaissance.

King had been the director of the city-owned utility when it drew up plans for a fiber-optic network to be built incrementally until it could connect every home, business, and community anchor institution in Danville Utility's territory. At the time, Danville was suffering tremendously from the loss of tobacco and textile industries.

Today, the nDanville net-work connects hundreds of businesses, has sharply re-duced costs for local gov-ernment, health care provid-ers, and local schools, and has introduced more competition into the telecommunications marketplace.

Danville Utilities has 44,000 electric meters, half of which are located in Danville (44 sq miles). The others are scattered across over 450 sq miles surrounding the city. The Southern Piedmont Technology Council serves the technology industry in Danville as well as nearby counties and another city. Even in 2004, many in Danville did not have broadband access to the Internet, as outlined in an early document explaining the network. Verizon barely offered DSL and Adelphia offered limited cable modem service. Andrew Cohill, a consultant assisting the project, has offered more background in a recent article of Broadband Communities.

Vermont's East Central Fiber-Optic Network (ECFiber) has finished its second round of financing. We noted that the network had exceeded its financing goals at the beginning of this year by raising over $1 million and subsequently began connecting rural homes with its next-generation network. (See all of our ECFiber coverage here.) The network is now connecting 120 households, a bit below its goal of 164 for the end of the calendar year... but it also had to deal with an unexpected hurricane (Irene) that seriously disrupted the entire state and kept fiber-splicers running ragged. ECFiber has just completed its second round of financing. While the first round was dominated by a few major investors, the second round had a broader base -- a sign that many in the community have embraced the approach. From the ECFiber press release:

ECFiber is using an innovative funding method to extend its network, supported by local citizens who lend funds that enable build-out to local neighborhoods within and across member towns. Citizens who invest as little as $2500 allow ECFiber to reach all households along designated routes. ECFiber determines where it will build by choosing routes that reach the greatest number of unserved businesses and households, which are then connected to ECFiber’s state-of-the-art fiber-optic service.

These people are literally investing in themselves. ECFiber is an InterLocal Contract with a Governing Board composed of a representiative from each member town (of which there are 23). Investors are purchasing tax exempt 15 year promissory notes that effectively earn 6% interest (due to the one year holiday from interest and principal). They have raised $340,000 in this round of financing, which will allow the network to pass 60-65% of Barnard's 950 residents.

Exciting times in rural southwest Minnesota, as Southwest Minnesota Broadband Services has turned on its first customer. SMBS is a broadband stimulus-enabled partnership with eight rural communities and WindomNet, the muni FTTH network in Windom.

The Rev. Andrew Schensted and his wife, Lisa, were the first to be connected. The fiber-to-home connection provides “obnoxiously fast Internet,” Andrew Schensted said in a SMBS press release. The SMBS Internet is “at least 10 times faster” than what they had when living in the metropolitan area, Andrew Schensted added. The couple has been able to streaming video in full HD from TV streaming websites.

So it begins... the Metro around Minneapolis and St Paul have to rely mostly on Comcast for connections to the Internet. CenturyLink's DSL is generally slower and in many places, utterly unreliable. Monticello has had a blazing fast connection (faster than we can get in the metro) at lower prices for more than a year. Communities served by HBC also have faster connections in SE Minnesota. In the coming year, the stimulus-funded networks on the North Shore will also have better connections than we can get. It will be curious to see how development patterns adjust in the coming years.

“The demand for higher-speed Internet in our rural area is daunting,” Olsen said. “People not only want faster speeds, they need it for their business operations. If the wireless trial is successful, it could provide a better option to those not on the fiber system. “ Southwest Minnesota Broadband Services (SMBS) is a consortium of eight communities including Bingham Lake, Brewster, Heron Lake, Jackson, Lakefield, Okabena, Round Lake and Wilder. The 125-mile, $12.8 million dollar fiber ring is expected to be completed in September 2012. The fiber-optic communication network has the capacity to bring fast, competitively priced services for internet, phone and cable TV to residential subscribers as well as businesses and other community institutions. The government grant-supported project is intended to provide southwest Minnesota with the telecommunications connectivity required to remain competitive in the global marketplace.

The new network has bucked a strong trend among community fiber networks of offering symmetric connections to the Internet.

Most of us are familiar either with Metcalfe's law or the general principle of it: networks are more valuable the more people are on it. The common example used to illustrate is a telephone. One person on a telephone network is useless. Two people is an improvement. With millions, you are far more likely to be able to call the person you want to. Recognizing this principle flips common arguments about connecting rural areas on their head. Ensuring that people in rural areas are connected benefits everyone -- it is not charity. Connecting people in rural areas increases the value of the connections in urban areas, creating more value for everyone. But the flip side may be too rarely considered. As these networks have grown in size (and therefore value), the cost of those who are excluded from them also increases significantly. This means that while the costs of not connecting rural areas are high today, those costs will be even greater in coming years. The argument is rather intuitive, but for those who want to learn more, Rahul Tongia and Ernest J Wilson III published an academic paper this year in the International Journal of Communications. The abstract for "The Flip Side of Metcalfe's Law: Multiple and Growing Costs of Network Exclusion" is here:

The study of networks has grown recently, but most existing models fail to capture the costs or loss of value of exclusion from the network. Intuitively, as a network grows in size and value, those outside the network face growing disparities. We present a new framework for modeling network exclusion, showing that costs of exclusion can be absolute, and might, at the extreme, eventually grow exponentially, regardless of underlying network structure. We find that costs of exclusion can also be spread to the “included” through several mechanisms such as parallel networks, and we also highlight how future research needs to capture the interaction of alternate or parallel networks to the network at hand.

Reedsburg Utilites, the owner and operator of a muni FTTH network north of Madison, Wisconsin, is finally moving forward on a project to connect rural areas of Sauk County. Last year, Reedsburg received a broadband stimulus award to expand its network but hit a series of stumbling blocks that called the project into question. The first problem is a common one when taking federal money -- Davis-Bacon wage rules. The bids from contractors were higher than expected because the appropriate wages according to the law are sometimes based on flawed data. In this case, contractors based the wages on highway construction rates, which increased the costs of the project by 50%. In other cases, we've heard of Davis-Bacon setting rates in rural areas based on urban wages, making projects harder to finance. Reedsburg apparently found a work-around (after first seeking a waiver from the provision):

Instead of accepting the bids, the utility decided to bid out rental contracts worth about $4 million to various companies, because the utility would not have to pay federal rates for temporary labor.

Then the prices for fiber-optic cable and duct rapidly increased due to the increase in demand from stimulus projects and the Japan earthquake. Finally, they were stuck waiting for final approval from RUS. Now they are moving forward with the $9.5 million project ($5.2 million grant, the rest in revenue bonds), which is good given the apparent demand they are seeing for the service:

Douglas [Reedsburg Utilities Marketing and Media Specialist] said the utility has seen a very high rate of interest in the new service. "I would say nine out of the 10 people I've talked to are on board, out of everyone we've met with so far," Douglas said.

Dunnellon, a small town in Marion County south of Gainesville, decided to invest in a community fiber network to spur growth and diversify its income stream. Though citizens did not want to cut government services, they have not been pleased at property tax increases. 364 days ago, we published a story discussing their financing. The town itself is quite small, with 1,733 residents but the network will be serving areas in the County as well. Though AT&T and Comcast offer services in the area, they have big gaps in coverage and apparently the cable television packages are antiquated (only 50 channels???). An article last year noted Dunnellon's Internet connections will range from 10Mbps to 125Mbps. They hope to sign up 1,647 subscribers within 6 months of launch -- the network is named Greenlight (not sure if they were aware that the city of Wilson, NC, already operates a triple-play FTTH network called Greenlight). They hoped to launch 6 months ago. Bill Thompson's "Dunnellon dreams of a connectied future," offers a comprehensive look at the promise and the challenges Dunnellon faces. Dunnellon's city manager comes from Valparaiso, which had a city-owned cable network that upgraded to FTTH. Unfortunately, Dunnellon is in the hard position of building a network from scratch. Building a new network requires a massive up-front capital investment - in this case the city will have spent $4.4 million to connect the first connection. Good thing they aren't all that expensive! The article identifies two main sources of the delays: difficulty in getting on the poles owned by Progress Energy and long delays in receiving the fiber-optic cable they ordered (stimulus projects have hogged the supply). Rather than taking 12 weeks, they had to wait 30. Delays cause problems:

The installation delay has put the city in a pinch with its lender, Regions Bank.

Minnesota's Governor Dayton has already done more for expanding broadband access in Minnesota than predecessor Pawlenty who took the "stay quiet and hope for the best" approach to expanding access in our state. After being prodded by the legislature (including now-Lieutenant Governor Prettner-Solon) Governor Pawlenty appointed an industry-heavy "Ultra High Speed" Broadband Task Force that exceeded the expectations of many, including myself, with its report [pdf]. I give a lot of credit to a few members, especially "Mikey" and Chairman Rick King of Thomsen Reuters, for that report given the constraints of the environment in which it existed. Minnesota's Legislature and Governor Pawlenty then created some goals for 2015 and generally ceased any work on ensuring Minnesota could meet the goals. However, some departments (like the Department of Commerce) are using that language to prod broadband providers to consider what steps they can take to get us closer. Despite my frustration, I want to recognize those who are doing all they can to expand access to this essential infrastructure. Fast forward to this week, when Governor Dayton announced a new Task Force that is supposed to really do things (as opposed to the more common Task Force approach of creating the appearance of doing things). I am heartened by many of the appointees. There are some terrific people, especially some terrific women who are too often under-represented in technology) that will work very hard to bring real broadband to the Minnesotans that either need their first option or a better option. And they have their work cut out for them. The state has few options to compel investment from a private sector that sees little reason to invest in an industry with so little competition (St Paul has one high-speed provider: Comcast, and one slower, cheaper alternative - CenturyLink). For instance, rural Kanabec County took the Ultra High Speed Task Force's recommendation and asked its incumbent to partner in providing better broadband.