Many people in rural areas get their phone services from a cooperative telephone company. When it comes to fiber in rural areas, some of these cooperatives are on the cutting edge. The July Issue of FTTH Prism [pdf] from Chaffee Fiber Optics has a feature on Paul Bunyan Telephone in Minnesota. They are an aggressive broadband network deployer in rural areas, often saving residents from Qwest or another company unable (sometimes just unwilling) to build these necessary networks.
Cooperative telephone companies fall into our understanding of publicly owned because they focus on their communities first and do not seek to maximize profits at the expense of social benefits.
Paul Bunyan Telephone is nearly 60 years old and now covers over 4,500 square miles. They have used RUS loans to finance significant portions of the network.
Currently, over 4,000 locations are served with our fiber-to-the-home network, which represents about 30 percent of our entire network. For these customers, thanks to the benefits of fiber optics, we can deliver high-speed Internet services up to 40 Mb (both upload and download) and a host of advanced television services including multiple streams of high-definition television, digital video recording, and on-demand services.
For those who claim that people in rural areas just don't understand broadband or don't want it, this company has an answer:
One specific example the fiber optic network capacity can have on a business is Northwood DNA, Inc. This is a business operating in a very rural area, Becida, MN, that provides DNA sequencing and genotyping services globally. The services they provide require receiving and sending large data files electronically. Prior to the deployment of the fiber optic network, their business was only able to report two to three test results per day. Today, with the benefits of the all fiber optic network, they report over 50 test results per day.
In a quick followup, the Minnesota Supreme Court has affirmed the obvious by refusing to review the Appeals Court decision in the TDS (acting as "Bridgewater") v. Monticello case. This means the Appeals Court decision stands; Minnesota cities have the authority to bond for broadband networks. Read our previous coverage of this case here.
When TDS originally sued Monticello, the City had to place the investor money (raised via non-recourse revenue bonds) into escrow for the duration of the case. If the case were not resolved by June 19, 2009, Monticello would have had to return the funds to the investors, leaving it unable to finance the project. Bonding again would have almost definitely resulted in less favorable terms than those achieved before the economic meltdown.
Following the Appeals Court decision, on June 2, 2009, TDS could have had up to 30 days to request review from the Supreme Court. John Baker, an attorney from Greene Espel who represented the City throughout the process, asked the Supreme Court to expedite the review in order to prevent TDS from merely using its thirty days to run out the clock (thus winning the war while having lost every single battle).
Today, the Supreme Court sided with the Appeals Court and an obvious reading of Minnesota law: Minnesota cities are well within their authority to bond for and build broadband networks.
Monticello will immediately start work on the city's publicly owned fiber-to-the-home network. TDS has argued that such a network would now be redundant as they built a fiber network while abusing the courts to stall for time. However, it remains to be seen if TDS is truly connecting all homes with fiber, or is still using copper for that final connection (much like AT&T does in its U-Verse). The top TDS advertised speeds are 25 down and 10 up, which can be achieved with VDSL.
If TDS has truly built a fiber-to-the-home network, Monticello will be the first place in the U.S. with competing full fiber networks. However, I'm not sure that TDS will be able to compete with FiberNet Monticello on some fronts as TDS offers it television via a partnership with a satellite company. Monticello will undoubtedly have more local content and probably better customer service.
Lest you think the court battle is over, Monticello is entitled to recover some of its costs due to the lawsuit.
Chattanooga, Tennessee is predicting it will offer FTTH in its entire service area by next year. The public power company has used fiber-optics in the past to manage its electrical operations and has been planning to offer a full FTTH network for awhile.
"There are two primary components to building this system. One component is taking longer than we thought and the other is happening much faster than we anticipated", said Harold DePriest, President and CEO. "The end result is that services will be available to the entire cities of Chattanooga, East Ridge and Red Bank by summer of 2010."
DePriest says once in place, EPB's fiber optic network will be the largest of its kind in the country.
However, Chattanooga has suffered the same problem that has plagued other publicly owned broadband projects around the country: incumbent telco and cableco lawyers. Comcast has sued Chattanooga in multiple courts in an attempt to limit competition (see here, here, here, and here for a few examples). As with these cases across the country (from Monticello, MN to Bristol, VA, to Lafayette, LA), the incumbents have lost the cases but successfully slowed the build-out, which hurts the community while padding company profits for an extra couple of years.
The network will offer symmetrical speeds of 10-50Mbps while keeping costs lower than the standard prices in the market.
Salisbury, a city of nearly 30,000 in North Carolina, has started building its full fiber-to-the-home network. Salisbury had some difficulty in funding the network at first due to the collapsing economy last year. However, they securing financing in November 2008 and have now started building the network. A recent Salisbury Post article notes that Atlantic Engineering Group is installing conduit. However, residents will have to wait more than a year to take any services. They still have to build the multi-million dollar head end. They already have agreements covering access to the telephone polls -- which are owned by Duke Energy and AT&T.
Much misinformation has been disseminated about Burlington Telecom (BT).
Here are the facts. BT is a city department of Burlington, Vermont, which owns a fiber-to-the-home network and offers triple play services (phone, cable, internet). The network depends entirely on subscriber revenues and is not subsidized in any form by the City. BT has saved the City money while being built entirely with investor money -- no tax dollars have been or will be used.
BT continues to add subscribers and has a take rate above 40% in the area it first began offering services.
Update: BT has encountered some serious problems following some questionable activities by the Mayor's Administration. I have covered some of the BT developments here.
Benoit Felten of FiberEvolution.com interviews Tim Nulty (former GM of Burlington Telecom, currently working on massive rural FTTH network in Vermont) at the Freedom to Connect Conference. Covers many topics, especially the economics of FTTH and why the public sector should invest in these networks.
The Municipal & Utility Guidebook to Bringing Broadband Fiber Optics to Your Community is a free, comprehensive guide to the economic and quality-of-life benefits of robust fiber infrastructure. It examines in detail four communities that have successfully deployed fiber-to-the-home (FTTH) services to their citizens and businesses. “This guidebook helps government leaders build a strong case for investing in FTTH infrastructure,“ said Alan Shark, Executive Director of PTI. “With thorough analysis, interviews and painstaking research, it sets forth strategies that, if followed, will help American communities whose broadband needs are not being met by current market dynamics to prosper in the information age.“
The United States, creator of the Internet, increasingly lags in access to it. In the absence of a national broadband strategy, many communities have invested in broadband infrastructure, especially wireless broadband, to offer broadband choices to their residents. Newspaper headlines trumpeting the death of municipal wireless networks ignore the increasing investments by cities in Wi-Fi systems. At the same time, the wireless focus by others diverts resources and action away from building the necessary long term foundation for high speed information: fiber optic networks. DSL and cable networks cannot offer the speeds required by a city wishing to compete in the digital economy. Business, government, and citizens all need affordable and fast access to information networks. Today's decisions will lay the foundation of telecommunications infrastructure for decades. Fortunately, we already know the solution: wireless solves the mobility problem; fiber solves the speed and capacity problems; and public ownership offers a network built to benefit the community.
Burlington Telecom, a city department in the largest city of Vermont, offers a world class fiber-to-the-home network offering cable television, fast broadband, and telephone services. This case study explains how they did it.
A Community Fiber Network is a community-owned broadband network that uses fiber-optic cables to connect all subscribers (the fiber cable goes all the way to the home, apartment, or business). It can offer phone, television, and Internet access. The capacity on the network is so great that it could offer tens of thousands of television channels while allowing thousands of people to talk on the phone while still offering Internet access at faster speeds than a cable modem system or DSL currently offer.
In some communities, the city government (Monticello) or local utility provides services (Chattanooga). In others, the network is only open to private service providers who compete for customers on equal terms (this would be an open network, Report: Open Access: The Third Way). Some cities have used a hybrid approach where the city offers services and offers non-discriminatory wholesale access to other providers and competes against them (Santa Monica).
Public, or community ownership is discussed in greater depth on our public accountability page. Briefly, it means that the public has some measure of self-determination over the network. Much like the water department is accountable to the public and therefore does not raise water rates unreasonably, those running the network would be accountable to the public. If the community decided to offer subsidized connections to those living below the poverty line, they could do that. (Report: Breaking the Broadband Monopoly)
Dark fiber, or fiber cables that are currently unused (or "unlit") is not always in convenient places. In order to build a Community Fiber Network, the community needs to have fiber passing nearly every home. While dark fiber may help in some areas, it is unavailable in most.
As we discuss on the page dealing specifically with fiber networks, fiber networks are future-proof. The speeds capable on fiber networks are increasing with new electronics. These networks will have paid for themselves many times over before becoming obsolete.
As we discuss on the page dealing specifically with fiber networks, fiber deployments are surprisingly strong. There are problems when fiber is cut, but there are similar problems when phone lines or power lines are severed. That said, they have proven more resilient than power lines in ice storms and tornadoes.
Fiber networks have been around for decades (though rarely extending all the way to residential homes until now) and the tools for keeping them running 24/7 are mature.
Comcast, Qwest, AT&T, etc., have fiber as parts of their network, but they do not connect everyone to the network with fiber. They may run fiber to your neighborhood but connect the last mile with slower copper wires that create a bottleneck, resulting in slower speeds that leave us less competitive in a world increasingly requiring faster speeds. In markets where they compete with Verizon, which is investing in a fiber-to-the-home network, they advertise heavily about their fiber networks to muddle the issue. But they cannot offer the same experience or guarantee the same high level of service that a true Community Fiber Network offers. You can learn more about fiber on our fiber page.
DOCSIS 3 is a new standard for cable modem systems that will greatly increase the available speeds. However, the cable network remains a massively shared loop, leaving it vulnerable to a few subscribers hogging bandwidth and degrading service for everyone else. Additionally, DOCSIS 3 is prohibitively expensive for the higher tiers. We briefly discuss DOCSIS 3 on the fiber page
Statements like "the government should not compete with the private sector" ignore the many ways in which we accept important government services that "compete" with the private sector. Libraries might take customers from bookstores. Police forces compete with private sector security guards.
But in other ways, government is clearly crucial to the private sector. Whether by building and maintaining roads, educating the future workforce, or offering clean water at very affordable prices, our private sector economic growth over the past century depended on public infrastructure.
When phone and cable companies try to make this into a public v. private argument, they miss the fact that the question of ownership is actually one of phone/cable companies against everyone else. When the private phone/cable companies refuse to invest in competitive connections, everyone suffers. Private businesses have to pay more for slower services than their competitors in other communities.
The idea of a level playing field between government and the private sector misses fundamental differences between the two. The private sector has a mission to maximize profit and shareholder value, primarily in the short term. The public sector maximizes social benefit and focuses on the long term. Understanding these differences in important to understanding why infrastructure has historically been owned or closely regulated by the public sector. We would not want GM owning the roads; they would find it quite profitable to ban competing car companies or force them to pay more to access the same roads.
Broadband networks have become infrastructure, and private companies should not be the sole arbiters of who gets 21st century infrastructure and when they get it.
Some of us do. A Community Fiber Network is not a plan to force everyone to use faster Internet connections. When Eisenhower decided to push the Interstate system, it was not with the idea that everyone would have to use it. However, business and government functions were greatly improved by this massive infrastructure project.
The short term effects of community broadband investments are generally to bring fast, symmetric connections to everyone. Though the network is capable of speeds far in excess of what is available on cable and DSL, community fiber networks often offer symmetrical speeds comparable to currently available downstream speeds. This means uploads will be much faster.
These networks may have the greatest impact on small-to-medium businesses. These businesses must currently choose between lower priced, slower, comparatively unreliable speeds and prohibitively priced faster speeds that offer more reliability. Many of them simply cannot afford the higher tiers of service they need. However, community broadband networks around the country are offering fast speeds at competitive prices. We created a comparison of the fastest community broadband networks with the fastest national private networks.
But the ultimate answer to the question is that we need to have choices. Those that need fast and affordable connections should have that option.
Symmetric connections have the same downstream speeds as upstream. This means that you can send a file to someone else just as fast as you can download it. Asymmetric connections tend to offer much slower upload speeds, which can slow usage of the modern Internet to a crawl. Both cable and DSL networks are asymmetrical.
10 years ago, when DSL and cable offered cutting edge, fast speeds, most Internet users simply consumed content and they did not need faster upload speeds. However, the Internet has changed and people increasingly want to send large files that require faster upload speeds (parents want to send photos and videos of their children to family members living across the country).
Ultimately, a purely symmetrical experience is less important than the objective to have fast speeds at affordable prices. But having upload speeds at 1/10 the download speed is clearly too asymmetric for modern networks.
We discuss the merits of wireless here. In short, wireless is great for mobility, but does not offer competitively fast speeds or the reliability of wired connections. Fiber is a long term investment that could facilitate wireless additionally, but wireless is not a replacement for a Community Fiber Network.
A fiber network could actually lay the groundwork (literally) for a wireless network. The fiber network would actually offer more potential locations to add wireless access points.
Communities around the country have investigated wireless networks. Some entered into contracts with private companies, such as Earthlink, who promised to build the networks at no cost to the city. When Earthlink failed to make a profit, for a variety of factors, it turned the networks off and abandoned the cities. These are the failures that have led the press to pronounce all municipal wireless efforts as dead. This model has been renamed "pri-fi."
Municipal wireless is far from dead. There are a variety of business models that are achieving variable levels of success. Nonetheless, wireless is a complement to a Community Fiber Network, not a competitor to it. More information on wireless here.
We touch on WiMAX in our wireless page. Briefly, WiMAX is unproven and cannot compare with fiber in its ability to deliver the fastest speeds in the long term. Additionally, the nature of WiMAX locks subscribers into a single vendor in ways that do not encourage competition.
