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Cox Ditches Cable for Fiber in Upscale Housing Development

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John St. Julien covered this story last month, but I couldn't resist amplifying it. Cox Cable, which has undoubtedly told hundreds of communities that they don't need anything better than what it delivers over its cable network, has opted for a full FTTH in a wealthy new development in California's Orange County. CED has the details, but the key point for us is yet another recognition that cable networks are yesterday's technology, unable to deliver the services that communities need today and will certainly need tomorrow. Communities are smart to invest in their own fiber networks not only because the technology is superior, but because local, community ownership results in a more accountable network that will continue to meet community needs long into the future. Municipal electric networks have offered less expensive, more reliable services for over 100 years in some cases - a track record that reminds us how powerful this model can be.
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Seattle, Gigabit Squared, the Challenge of Private Sector Cable Competition

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This the second in a series of posts exploring lessons learned from the Seattle Gigabit Squared project, which now appears unlikely to be built. The first post is available here and focuses on the benefits massive cable companies already have as well as the limits of conduit and fiber in spurring new competition. This post focuses on business challenges an entity like Gigabit Squared would face in building the network it envisioned. I am not representing that this is what Gigabit Squared faced but these issues arise with any new provider in that circumstance. I aim to explain why the private sector has not and generally will not provide competition to companies Comcast and Time Warner Cable. Gigabit Squared planned to deliver voice, television, and Internet access to subscribers. Voice can be a bit of hassle due to the many regulatory requirements and Internet access is comparatively simple. But television, that is a headache. I've been told by some munis that 90% of the problems and difficulties they experience is with television services. Before you can deliver ESPN, the Family Channel, or Comedy Central, you have to come to agreement with big channel owners like Disney, Viacom, and others. Even massive companies like Comcast have to pay the channel owners more each year despite its over 10 million subscribers, so you can imagine how difficult it can be for a small firm to negotiate these contracts. Some channel owners may only negotiate with a provider after it has a few thousand subscribers - but getting a few thousand subscribers without good content is a challenge. Many small firms (including most munis) join a buyer cooperative called the National Cable Television Cooperative (NCTC) that has many of the contracts available. But even with that substantial help, building a channel lineup is incredibly difficult and the new competitor will almost certainly be paying more for the same channels as a competitor like Comcast or Time Warner Cable.
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Big City Community Networks: Lessons from Seattle and Gigabit Squared

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A few weeks ago, a Geekwire interview with outgoing Seattle Mayor Mike McGinn announced that the Gigabit Squared project there was in jeopardy. Gigabit Squared has had difficulty raising all the necessary capital for its project, building Fiber-to-the-Home to several neighborhoods in part by using City owned fiber to reduce the cost of building its trunk lines. There are a number of important lessons, none of them new, that we should take away from this disappointing news. This is the first of a series of posts on the subject. But first, some facts. Gigabit Squared is continuing to work on projects in Chicago and Gainsville, Florida. There has been a shake-up at the company among founders and it is not clear what it will do next. Gigabit Squared was not the only vendor responding to Seattle's RFP, just the highest profile one. Gigabit Squared hoped to raise some $20 million for its Seattle project (for which the website is still live). The original announcement suggested twelve neighborhoods with at least 50,000 households and businesses would be connected. The project is not officially dead, but few have high hopes for it given the change in mayor and many challenges thus far. The first lesson to draw from this is what we say repeatedly: the broadband market is seriously broken and there is no panacea to fix it. The big cable firms, while beating up on DSL, refuse to compete with each other. They are protected by a moat made up of advantages over potential competitors that includes vast economies of scale allowing them to pay less for advertising, content, and equipment; large existing networks already amortized; vast capacity for predatory pricing by cross-subsidizing from non-competitive areas; and much more. So if you are an investor with $20 million in cash lying around, why would you ever want to bet against Comcast - especially by investing in an unknown entity that cannot withstand a multi-year price war? You wouldn't and they generally don't.
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Ellensburg Pursues Its Fiber Project in Washington

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Ellensburg is quickly moving forward as it make plans to build a publicly owned fiber optic network. The City Council approved a contract with Canon Construction  on December 16th, reports the Daily Record.

From the article:

Canon Construction of Milton won the contract to lay 13 miles of above- and underground fiber optic cables for the city with a $961,000 bid.

Multiple public organizations, including Central Washington University and Kittitas Valley Fire and Rescue, contract with the city for cable Internet services through the city.

We recently reported on the City Council decision to establish a telecommunications utility serving municipal needs. At the December 16th meeting, they also approved an ordinance needed to move ahead with the utility.

The community network will replace the Institutional Network supplied by Charter Communications. Charter and the City have been negotiating a new franchise agreement with little success. Charter wants to charge $10,000 per month to provide the service that it previously offered at no charge beyond the incredibly valuable access to the public's right-of-way. The City determined building a network was more economical and we suspect the City will also achieve greater reliability and have access to better technology than Charter would have installed.

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Op-Ed: Baltimore Makes Smart Move with Fiber Investment

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On November 25, the Baltimore Sun ran this opinion piece by me regarding Baltimore's approach to expanding Internet access in the city. Baltimore Mayor Stephanie Rawlings-Blake recently spoke the plain truth: “You can’t grow jobs with slow Internet.” This simple statement is the best explanation for why Baltimore is examining how it can use existing City assets and smart investments in the near future to expand access to fast, affordable, and reliable Internet access. It is also a slap across Comcast’s face. The big cable and telephone companies have insisted for years that they already deliver the services residents and businesses need. But they also claim to offer reasonable prices that just happen to increase year after year with few customers having other options to choose from. Baltimore’s reality is that Comcast does indeed offer speeds that are faster than many in rural Maryland can access. But they are not even in the same league as cities like Chattanooga, where every address in the community has access to the fastest speeds available anywhere in the nation, and at some of the lowest prices. There, as in hundreds of communities across the country, the local government built its own next-generation network. Whenever a city announces the possibility of investing in a network, the cable industry public relations machine kicks into high gear. They argue that we have a plethora of choices for Internet access. The sleight of hand behind this claim is to include LTE wireless networks as a replacement for cable – something almost no household does because replacing your home wired connection with LTE will break your budget. According to bandwidth-management firm Sandvine, the average household uses more than 50 gigabytes of data each month. Between the data caps and overage fees from AT&T, that will cost over $500/month. Meanwhile, the overwhelming majority of community owned networks are doing exactly what they intended – breaking even financially while providing a valuable public service. Big cable companies argue that these networks have failed if they aren’t making big profits each year, a misunderstanding of public accounting. Community owned networks aim to break even, not make a profit. When Windom, Minnesota, ended a year with a $50,000 deficit from a network that kept many local jobs in the community, few complained.
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Cedar Falls Shows Long Term Muni Network Success: Community Broadband Bits Episode #75

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Cedar Falls Utilities operates one of the oldest community owned networks in the nation. It started as a cable network in the 90's, upgraded to FTTH recently, and this year began offering the first citywide gigabit service in Iowa. CFU Communication Sales Manager Kent Halder and Network Services Manager Rob Houlihan join me for Community Broadband Bits podcast 75. We discuss why Cedar Falls Utilities decided to add cable to their lineup originally and how it has achieved the incrediblely high take rates it maintains. We also discuss the importance of reliability for municipal network and why they decided to transition directly to a FTTH plant rather than just upgraded to DOCSIS 3 on their cable system. Finally, we discuss its expansion into the rural areas just outside of town. Read all of our coverage of Cedar Falls on MuniNetworks.org. Read the transcript of our discussion here. We want your feedback and suggestions for the show - please e-mail us or leave a comment below. Also, feel free to suggest other guests, topics, or questions you want us to address. This show is 20 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed. Listen to previous episodes here. You can can download this Mp3 file directly from here. Find more episodes in our podcast index. Thanks to Haggard Beat for the music, licensed using Creative Commons.
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Billy Ray on the Origins of the First Muni Broadband Network: Community Broadband Bits Episode #74

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Last month, we unveiled a video teaser of our interviews in Glasgow, Kentucky over the summer regarding its municipal broadband network. This week our podcast features a few clips from those interviews with Billy Ray, the Superintendent of Glasgow's Electric Plant Board. He offers more context on the history of their network, including how they became "savvy marketers" when faced with stiff competition from Telescripts - a cable company that cared nothing for Glasgow until they dared to build a rival system operated for community benefit. He details how they began producing local content and the surprisingly most popular show they developed - what would eventually come to be known as "reality TV." We thank Media Working Group, our partners in this documentary for the high quality interviews. Read the transcript from this episode here. We want your feedback and suggestions for the show - please e-mail us or leave a comment below. Also, feel free to suggest other guests, topics, or questions you want us to address. This show is 10 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed. Listen to previous episodes here. You can can download this Mp3 file directly from here. Find more episodes in our podcast index. Thanks to Haggard Beat for the music, licensed using Creative Commons.
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New Comic: Longmont Fiber Crushes Comcast's Cable Outhouse

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Longmont Power and Communications, a city-owned utility north of Denver in Colorado, is slowly rolling out a FTTH network to local businesses and residents that are in close proximity to its existing fiber loop. They are offering a symmetrical gigabit of Internet access for just $50/month. Longmont Fiber Comic Strip Download this comic as a pdf. Sign up for our one-email-per-week newsletter with ongoing coverage of community owned networks. The local newspaper notes that some local businesses have already signed on, including a clinic:
Jurey said the city's network is three times faster than the speeds the clinic got before at a cost savings of $1,600 a month.
On November 5, citizens will decide a referendum on whether to expedite the building by issuing revenue bonds without increasing local taxes. A brochure explaining pro and con is available here [pdf]. Approving the bonds means building the network to everyone in a few years while not approving it will mean building the network over several decades. We recently did a podcast with Longmont Power and Communications Broadband Services Manager Vince Jordan and a local citizen campaigning for the referendum. Listen to that show here. Read the rest of our coverage about Longmont here.
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Billy Ray on the Origins of the First Muni Broadband Network

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During the summer, I spent two days in Glasgow, Kentucky, to learn about the first municipal broadband network in the country. I believe it also became the first community in the US to have broadband access available universally within the town.

Working with the Media Working Group, we recorded several interviews with people there, including a lot of time with Electric Power Board Superintendent Billy Ray. Billy Ray has been a key proponent of local self-reliance and a pioneeer of community owned networks.

Below, we pulled out a few snippets of our interview talking about the origins of the Glasgow network. All of our stories about Glasgow are available here.

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Television Consumer Freedom Act Promises More Choices

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On August 14th, Christopher Mitchell and I visited Senator Amy Kobuchar's office in Minneapolis. We arranged the meeting in coordination with Free Press and the Media Action Grassroots Network to talk with our Senator about the Television Consumer Freedom Act, also known as S.912.

Senators John McCain (R-AZ) and Richard Blumenthal (D-CT) are sponsoring this effort to scale back cable program bundling. ILSR and the Free Press recognize this as a good start to reforming our deeply flawed video market. We also see it as a foothold to inching closer to the wide ranging and affordable broadband we desperately need.

We met with Senate staff to present 594 Minnesota petition signatures in support of the legislation. Free Press has collected over 27,000 signatures from across the country asking Congress to pass the Television Consumer Freedom Act.

The bill provides options for consumers beyond today's restrictive bundled services. By offering channels a la carte, consumers can pay for what they want rather than being forced to pay for many channels they do not. Bundling also limits independent channels by crowding out capacity and creating onerous financial barriers for entrepreneurial media ventures. This bill will not eliminate bundling, but will require cable providers to also offer a la carte pricing. It is important to note that the cable companies themselves are often forced to bundle by channel owners like Viacom or Disney. This bill restricts that practice as well.

We also give two thumbs up for the sports fans' provision in the bill. From an LA Times opinion piece written by Senator McCain:

Another provision in the bill seeks to end the practice of sports team owners punishing fans by blacking out home games that don't sell out. It provides that games taking place in publicly financed stadiums can't be blacked out.

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