June will be an exciting month for people living in Brownton, Buffalo Lake, Fairfax, and Stewart in Minnesota. RS Fiber Cooperative will begin construction so those premises can connect to the Fiber-to-the-Home (FTTH) network now serving six other communities in the central Minnesota region. This stage of the buildout should bring another 500 subscribers on to the network by the end of the year; the network already serves 1,100 premises.

Bringing The Last Towns Into The Fold

According to general manager Toby Brummer:

“As construction of the network continues, we expect our customer numbers to continue to grow. Once we have the final four towns connected to the network, construction can begin on Phase Two of the project which will involve bringing gigabit fiber service to the township members of the RS Fiber Cooperative.”

Customers who take FTTH service now can sign up for voice, video, and Internet access up to 1 Gigabit per second (1,000 Mbps). Addresses that are outside the fiber connection service area have been able to obtain service from the cooperative via its fixed wireless RS Air service.

A Story Of Peaks And Valleys On The Prairie

The RS Fiber Cooperative story began in Sibley and Renville Counties as a regional municipal effort but when Sibley County pulled out, the project had to restructure their plan and design a new strategy. Rather than leave the rural farms behind, the participants decided to form a broadband cooperative to serve as many premises as possible.

Local farms - some of which had no Internet access at all - needed high-quality Internet access in order to operate in the modern agricultural economy. National providers had decided that the area was too sparsely populated to justify investment, so the locals decided they needed to act.

For the second week in row, our staff has felt compelled to address a misleading report about municipal networks. In order to correct the errors and incorrect assumptions in yet another anti-muni publication, we’ve worked with Next Century Cities to publish Correcting Community Fiber Fallacies: Yoo Discredits U Penn, Not Municipal Networks.

Skewed Data = Skewed Results

Professor Christopher S. Yoo and Timothy Pfenninger from the Center for Technology, Innovation and Competition (CTIC) at the University of Pennsylvania Law School recently released "Municipal Fiber in the United States: An Empirical Assessment of Financial Performance." The report attempts to analyze the financial future of several citywide Fiber-to-the-Home (FTTH) municipal networks in the U.S. by applying a Net Present Value (NPV) calculation approach. They applied their method to some well-known networks, including Chattanooga's EPB Fiber Optics; Greenlight in Wilson, North Carolina; and Lafayette, Louisiana's LUS Fiber. Unfortunately, their initial data was flawed and incomplete, which yielded a report fraught with credibility issues.

So Many Problems 

In addition to compromising data validity, the authors of the study didn’t consider the wider context of municipal networks, which goes beyond the purpose of NPV, which is determining the promise of a financial investment.

Some of the more expansive problems with this report (from our Executive Summary):

Hudson Oaks, Texas, will be deploying infrastructure this summer in order to bring high-quality connectivity to businesses and residents. At a recent city council meeting, community leaders authorized the project to allow the town of about 1,700 people to be the first to offer gigabit connectivity in Parker County.

Working With A Local Provider

The city will own the infrastructure and recently entered into a partnership with local Internet Service Provider (ISP) NextLink to offer service via the fiber-optic network. NextLink is headquartered in Weatherford, about five miles from Hudson Oaks. Fort Worth is about 25 miles due east of Hudson Oaks.

According to the Weatherford Democrat, properties within city limits will be served by the new fiber service that will be funded with public investment. On the city’s Facebook page, residents asked questions and city administrator Patrick Lawler addressed them:

“The city of Hudson Oaks cannot by state law spend funds outside the city limits unless expressly given the authority such as we have with water. Fiber does not qualify for this exclusion. NextLink, however, may expand the service at their discretion. In order to prepare for that possibility we have placed additional fiber strands for future expansion.”

Earlier this month, the city authorized the issuance and sale of $1.54 million combination tax and revenue certificate of obligation to help fund the project.

Prices for Internet access should run around $50 - 60 per month for 50 Mbps and $150 per month for gigabit connectivity. Construction on the network should start this July.

Telecompetitor - May 25, 2017

Municipal broadband networks do not have a strong financial track record, according to an analysis conducted by the University of Pennsylvania’s Center for Technology, Innovation and Competition. The municipal broadband financial analysis, which looked at 20 municipal fiber projects, found that only nine were cash-flow positive and that of those, seven would need more than 60 years to break even.

...

An Opposing View

Municipal network advocate Christopher Mitchell, director of the Community Broadband Networks Initiative at the Institute for Local Self-Reliance, pointed to several flaws in the Penn Law municipal broadband financial analysis.

He noted, for example that a substantial portion of the 20 networks studied were “early in the process and very small.” He also argued that the 2010-2014 study period may have biased the results, as that period included a recession and subscribership for some of the networks has increased substantially since 2014. He noted, for example, that EPB’s broadband network in Chattanooga had about 50,000 to 55,000 subscribers in 2014 but has now hit the 90,000 mark.

The Penn Law authors’ approach was “not the proper way to measure these networks,” said Mitchell in a phone call with Telecompetitor. The analysis “doesn’t take into account jobs created or the impact on the municipal budget,” he said.

He argued, for example, that a municipality that previously paid $1 million annually for connectivity might instead pay itself $500,000 for connectivity on the municipal network.

...

Read the full story here.

Highlands, North Carolina, deployed a Fiber-to-the-Home (FTTH) infrastructure and fixed wireless complement to serve the community. The small rural community has been operating the municipal network in the Appalachians since late 2015, but is now considering passing the mantle to a private partner. They recently released a Request for Information (RFI) and responses are due June 9th.

High In The Appalachians

Tourism is one of the town’s staple economies, as it’s known for its natural surroundings atop the Nantahala National Forest in the mountains. While less than 1,000 people live in the town all year, summer tourists swell the population to around 20,000. There are several country clubs nearby that cater to the affluent second-home owners in Highlands and there are at least 500 homes that are valued at $1 million or more.

The FTTH network does not serve the entire community. Local leaders want the network available to the entire community, in part to keep second home owners in Highlands for extended periods of time. With better connectivity, many could work from home. The community also operates a municipal electric utility that owns 2,600 utility poles and 110 miles of line, most of it aerial. Interestingly, the Highlands Electric Utility serves over 3,000 accounts, some in the suburban Atlanta areas.

Highlands issued the RFI to search out  provider that would be interested in expanding the FTTH network and acquiring more customers for the network as a whole. They still want to own the infrastructure, but hope to attract a provider willing to lease the existing network and add to it.

Read the rest of the RFI.

Responses are due Friday, June 30th.

Beverly Hills may be known for mansions and upscale shopping, but within a few years, it will also be known for fast, affordable, reliable connectivity. The city is investing in a citywide Fiber-to-the-Premise (FTTP) network for all homes and businesses, including apartments and condos, inside the city.

"90210" Wants Something Better

The city (pop. 35,000) is a little less than six square miles and they receive electricity from Southern California Edison (SCE). AT&T and Spectrum (formerly Time Warner Cable) provide Internet access throughout the community but a 2014 survey as part of the city’s feasibility study indicated that 65 percent of respondents would “definitely or probably” switch to services from the city, if the services were offered. As part of the survey, 25 percent of respondents also want video and voice bundles; 86 percent feel using the Internet at home is important.

While incumbents offer fiber connectivity in commercial areas of Beverly Hills, local businesses report that rates are expensive and they must pay for the cost of construction, which is also a big expense. At a recent City Council meeting when the Council approved funding for the project, the Mayor and Members expressed the need to be an economically competitive city. With Santa Monica, Culver City and Burbank nearby (all communities with municipal networks), Beverly Hills wants to be able to attract businesses looking to relocate or hold on to the businesses that need affordable and reliable gigabit connections.

Nuts And Bolts To Networking

Congratulations to Chattanooga’s EPB Fiber, which in April exceeded 90,000 subscribers and contributed to lower power rates for all EPB customers.

Savings For Everyone

While the increased subscribership is cause for celebration, an equally important chapter in the story is that EPB lowered power rates by 7 percent as a result of upgrading to a “smart grid.” All EPB customers may not subscribe to EPB Fiber's Internet access, but all electric customers benefit from lower electric rates. Chattanooga’s fiber network operates as the main mode of communications for the grid, while also providing Internet services to businesses and residents.

The grid and fiber combination includes sensors, meters, and switches that enable EPB to track energy use and manage power outages. During one storm in 2013, the grid’s switches reduced outage times by 55 percent, saving EPB $1.4 million. In late April, the area endured severe storms, but network officials estimate the smart grid prevented power outages to 17,800 customers.

In an interview with Christopher last November, EPB’s former President and CEO Harold DePriest detailed how Chattanooga’s fiber network helps bring down costs:

“We built a smart grid on the back of that fiber, and that has very literally cut the number of outages and the length of outages here in Chattanooga by 50 to 60 percent... that one thing is saving our community's businesses somewhere in the neighborhood of 50 to 60 million dollars a year. That's pretty substantial.”

J. Ed. Marston, EPB’s vice president of marketing and communications, said:

After long deliberation, utility board members in Traverse City have taken a firm step toward Internet infrastructure in order to improve connectivity in Michigan’s “Cherry Capital of the World.” The board of Traverse City Light & Power (TCL&P) voted unanimously to adjust their six-year capital improvement plan to include the cost of a citywide fiber network.

Making A Decision

City leaders have considered several options to give residents and businesses better Internet access. They’ve had their own fiber infrastructure for about ten years, which they’ve leased to schools and hospitals and used to offer free downtown Wi-Fi. For over a year now, they've tossed around several possibilities on how to move forward to meet the demands of the community.

TCL&P has mulled over the pros and cons of offering retail services themselves as well as leasing the infrastructure to a single provider. The consultants who developed their feasibility study examined both options. A local group of tech enthusiasts encouraged TCL&P to consider an open access plan, but their consultants reviewed the option and advised against it. Other options were to do nothing or work with an electric cooperative serving the rural areas around the city.

At their May 10th meeting, board members decided to eliminate the option that places TCL&P in the role as retail ISP. They will expand the existing network by another 184 fiber miles over the next two years to approximately 10,800 customers; TCL&P will own and operate the infrastructure, but they intend to seek some other entity to serve as ISP. The up front investment is lower with this plan than if they were to operate as a muni ISP and they’ve had discussions with at least one interested provider. TCL&P officials note that their current decision doesn’t prevent them from an open access arrangement or contracts with multiple providers in the future. 

Board members decided they weren’t ready for the extra investment required for TCL&P to serve as ISP in addition to infrastructure management:

Indianola Municipal Utilities (IMU) in Iowa finalized its business plan for citywide Fiber-to-the-Home (FTTH) service earlier this month. The decision marks a shift in how residents receive services in the community; IMU will take over from current partner Mahaska Communications Group (MCG) and expand to offer triple-play citywide.

Up To Now

Indianola created its municipally owned broadband utility back in 1997 and invested in fiber-optic backbone infrastructure a year later. They used the investment to backhaul fixed wireless service beginning in 2002 and by 2006 had developed a partnership with MCG. Expanding fiber to residents didn’t start until 2010 and two years later, MCG began offering triple-play services within certain areas of the city. Last year, the community commissioned a feasibility study to examine the possibility of using existing fiber resources to all premises in Indianola.

Under the current agreement between IMU and MCG, wholesale rates for residential connections are $30 per month and $100 per month for commercial connections. The feasibility study determined that the current rates “did not support expansion” to the entire Indianola community.

Trustees Say OK

Under the business plan approved by the Trustees at the May 8th meeting, IMU will step into MCG’s shoes and will buy out MCG’s existing 596 customers. IMU will be the FTTH retail services provider, offering triple-play of Internet access, VoIP, and IPTV. The network will work with Cedar Falls Utilities (CFU) on video services, connecting at the Des Moines regional data facility in order to reach them. IMU will have the opportunity to tap into about 7,350 potential residents and businesses in addition to MCG’s current customers.

The plan for expansion divides the city into 26 service areas but subscribers need to sign up early in order for the utility to connect their home. People who participate in early sign up will all have services activated at the same time. IMU has proposed rates for different services including: