Recently, we let you know about the situation in Siloam Springs, Arkansas, population 15,039. The town is now investigating the possibility of building their own fiber network. They have had several community meetings and a "vote of the people" is set for May 22, 2012.

Pamela Hill is investigating the twists and turrns in a series of articles about the vote. In one of her articles, Hill looked into another Arkansas community, Paragould, home of the annual "Loose Caboose" Festival.  This community, located in the northeast corner of the state, has successfully operated their own cable network since 1991. Unlike Siloam Springs, the people of Paragould weren't focused first on generating new revenue for the local government, they just wanted to be able to watch tv for a reasonable price.

Back in 1986, Cablevision was the only provider in Paragould. Hill spoke with Rhonda Davis, CFO of Paragould Light, Water & Cable:

"The public wasn’t happy with Cablevision’s service or rates,” Davis said. “We took it to a public vote and did it.”

Prior to Paragould's decision to build their own network, the City had a nonexclusive franchise agreement with Cablevision. The town was dissatisfied by the service they received and, in 1986, Paragould voters approved an ordinance authorizing the Paragould Light and Water to construct and operate a municipal cable system. Three years later, there was a referendum that authorized the city to issue a little over $3 million in municipal bonds to finance the system.

That same month, Cablevision filed suit alleging antitrust violations, breach of contract, and infringement of first and fourteenth amendment rights. The district court dismissed the antitrust and constitutional claims and Cablevision appealed unsuccessfully. The case attracted attention from lawyers and business scholars across the country.

We told you how Chanute, Kansas, was using their community network to serve local businesses. Now we want to share a story about how the community network helped bring a new business to Chanute.

Chanute, who is named after Octave Chanute an aviation pioneer, adopts the motto "A Tadition of Innovation." Chanute has proven that they are serious about that mantra with the expansion of their community network. They boast free Wi-Fi in all green spaces and parks, schools that are connected with fiber and wireless, several fiber loops throughout the city, plans for a smart grid, and are even exploring FTTH capability.

Spirit AeroSystems, the world's largest supplier of commercial airplane assemblies and components, just opened a new manufacturing facility in Chanute. The plant is expected to create up to 150 new jobs in the southeastern Kansas community and will include a health clinic on site for employees.

As Spirit was approaching different communities, it had a variety of requirements that included reliable electricity and reliable broadband. Nothing exorbitant -- they weren't asking for a gig or even 100Mbps. But they needed reliability. And Chanute was poised to deliver. Publicly owned networks do not exist in a vacuum; they are often one piece of a well-run community.

If Chanute only had a slow DSL and absentee-owned cable company offering broadband, maybe Spirit still would have chosen them and maybe that would have been the tipping point for a different community. We don't know for sure. 

What we do know is that Chanute is getting more jobs and that owning their own network helped.

We have developed a new video to explain why communities consider building their own broadband networks. Please pass it around, embed it in social media, and also remind people that we have a new report with in-depth case studies of community broadband!

Not long ago, we told you about Leverett, Massachusetts, the small town of 1,851, that has been discussing the possibility of building a community network. Residents and businesses currently use a combination of satellite, dial-up, DSL, and wireless, and about 6% of the population has no Internet access at all. People are tired of lost opportunities in a town strategically situated near several colleges. The town just approved the proposal to invest in a municipal network.

Last Saturday, April 28th, the measure to build the network was approved at Leverett's Annual Town Meeting. The needed two-thirds vote came easily, with 306-33 in favor, at the packed meeting at the Leverett Elementary School auditorium. Enthusiasm and expectations are high. From a Fran Ryan article in the Gazettenet.com:

For many, the lack of adequate Internet access has created problems with work, school and even the ability to sell their homes.

"Right now we have hopeless telephone service, useless cellphone service, and no internet service," said resident Raymond Bradley. "This will completely change our lives,"

The current plan is to borrow $3.6 million to create a fiber-optic network that will connect every home and provide triple play services across town. As you may recall from our earlier article, Internet access is only part of the problem - Leverett has had longstanding difficulties with telephone service due to decaying infrastructure. The situation is so bad, the State Department of Communications ordered Verizon to make repairs in over 100 towns in western Massachusetts. With this vote, however, Leverett has decided to take control of its own fate.

Leverett received a $40,000.00 planning grant from the Massachussetts Broadband Institute and benefited from the expertise and efforts of the Wired West group. Leverett's last mile project will connect with MBI's middle mile project.

According to the Leverett Broadband Committee, the investment will pay off rather quickly. This from an April 18th Ben Storrow GazetteNet.com article:

The Institute for Local Self-Reliance has recently posted an examination of 1999 Iowa Act Chapter 63, which expressly allows municipal networks:

Section 1. LEGISLATIVE INTENT. It is the intent of the general assembly to specifically provide that cities of Iowa which create city utilities in the manner provided by law are authorized to provide on a competitively neutral basis with existing local exchange carriers separate or combined cable communications or television, telephone, telecommunications systems or services, including wireless systems or services, through the ownership of systems or offering of the services.

Sec. 2. Section 362.2, subsection 6, Code 1999, is amended to read as follows:
6. “City utility” means all or part of a waterworks, gasworks, sanitary sewage system, storm water drainage system, electric light and power plant and system, heating plant, cable communication or television system, telephone or telecommunications systems or services offered separately or combined with any system or service specified in this subsection or authorized by other law, any of which are owned by a city, including all land, easements, rights of way, fixtures, equipment, accessories, improvements, appurtenances, and other property necessary or useful for the operation of the utility.

The 1999 legislation opened the door for Iowa communities wanting to provide broadband access in areas that had been overlooked by the private sector. Since 1999, however, lobbyists for the telecommunications industry have found ways to increase regulation of community networks that does not apply to the private sector.

In addition to an analysis of how this rule changed Iowa's approach to networks, ILSR summarizes detailed changes in the original legislation. The analysis includes pros and cons and how the telecom lobby has influenced the Iowa law since its inception.

Read more here in the ILSR Rules Library.

The 1 gig network is slated to be an aerial build, except where existing utilities are underground, in which instances, fiber cable will also be placed underground. Leverett plans to use a $40,0000 planning grant, obtained from the Massachusetts Broadband Institute, to hire G4S Technology to design the last mile fiber-optic network to connect to MBI's stimulus-funded middle mile. The middle mile project is scheduled to be completed in June, 2013, and Leverett plans to be ready to connect soon after. The goal is to have every home connected with fiber by 2014.

Whereas most communities explicitly choose not to use tax revenue to pay for a community network, Leverett's present plan is for a slight increase in local taxes to assist in the financing. The town will borrow the amount necessary to build the network and pay it back over 20 years using a combination of tax revenue and revenues from the new broadband service. Peter d'Errico, Chair of the MBI Grant Broadband Committee observes that homeowners' net spending figures will decline once the system is in place. From the article:

A town survey concluded a municipal network could offer better Internet and phone service at far cheaper rates than private providers, he said.

"It will be a little more on their tax bill and a lot less on their Internet bill, so overall they will be pay less," d'Errico said.

LUS Fiber now offers its business subscribers the current ultimate in broadband speeds. An April 5th press release from LUS Fiber reports that business customers of the state's only community-owned ftth network now have access to 1 gig symmetrical internet connections.

The ability to offer such fast speeds in both directions is a big draw to business customers, boosting the potential for economic development. In the press release:

“Gigabit service from LUS Fiber is one of the most robust Internet offerings on the market today,” says Terry Huval, Director of Lafayette Utilities System and LUS Fiber. “We built this community network with a promise to the people of Lafayette that we will work hard to provide them with new opportunities through this unique, state-of-the-art fiber technology…and that’s just what we’ve done.”

We have reported extensively on events surrounding the development of, and contiued corporate attack on, the LUS Fiber system. The local Lafayette Pro Fiber Blog reporter, John, notes how this advancement is rare in the US because the LUS 1 gig service can be offered to all business customers, not just those considered part of a "business core."

John also provides an excellent analysis of how LUS Fiber uses a different customer service approach than traditional ISPs. While he reports on engineering details, he also dicusses a key policy difference between providing the best service and providing any service:

Oversubscription and "best effort" is the name of the game for almost all ISPs and the bandwidth available to the last mile customer is in practice limited: if all subscribers were to use their full bandwidth at once the available speed would drop to a small fraction of the promised bandwidth. LUS has always played that game a different way, minimizing oversubscription and ensuring that even during busy hours of the day the customer's full bandwidth is available. That's in marked contrast to what I used to experience on Cox when the kids in my neighborhood got off the bus.

The Chattanooga Times Free Press, reports that the City's last IntelliRuptor, or "smart switch," will be installed on April 24th. No wonder EPB was named one of The Networked Grid - Top Ten Utility Smart Grid Deployments in North America by Greentech Media. EPB also received a special award for Best Distribution Automation, thanks to its fiber-optic network. EPB and Chattanooga have been similarly recognized in the past. Quickly locating and localizing power outages will continue to limit power loss which will save tens of millions of dollars each year. According to Harold DePriest, CEO of EPB, "Nobody has applied them (IntelliRuptors) in the numbers we've applied them." A tornado on March 2nd tested the new system and, while 3,470 customers lost power, estimates are that the number would have been double without the use of the smart switches. Smart meters are also being installed, allowing customer usage data sent to the utility, which means that EPB will immediately know who has power and who does not in the aftermath of storms. EPB saved about 5 million customer minutes in 2011 with half of the switches installed and half of installed switches set up to function automatically. EPB estimates and annual saving of up to $40 million to $45 million for businesses, and between $6 million and $7 million in savings for the utility because of fewer and limited outages. Putting a dollar amount on loss due to power outages is no easy task. Estimates for losses in the United States vary but a 2005 research study from the Lawrence Berkeley National Laboratory (Berkeley Lab) put the figure at $80 billion dollars annually. With more smart grids like the EPB system, that figure could be significantly reduced. Community fiber networks are uniquely poised to offer the best option to electric utilities that need reliable, robust connections across their footprint. A significant number of smart meters (approximately 60,000) and automation points (approximately 300) remain to be installed in Chattanooga.

A little less than a year ago, the 88^th Arkansas General Assembly created HB 2033, later known as Act 1050 [pdf]. The law made a few changes to the Telecommunications Regulatory Reform Act of 1997 and, while “a few changes” may not sound like much, they don’t need to be much in order to have a significant effect on the prospect of municipal broadband in Arkansas. The language gets specific about municipal broadband, related services, and alters the possibilities in Arkansas.

WHO AND WHAT...

Prior law prohibited any government entity from offering, directly or indirectly, basic exchange services. So, an Arkansas town couldn’t create its own telephone company that offered the traditional concept of telephone service, as defined in statute.

Act 1050 expands the prohibition to data, broadband, video, and wireless. With the exception of those owning municipal electric utilities or cable television systems, Arkansas towns are now prohibited from offering broadband services to nonpublic entities.

EVERYBODY EXCEPT…

Prior law allowed an exception for government entities owning municipal electric systems or television signal distribution systems to be able to make telecommunications capacities associated with the facilities available to the public. Offering basic local exchange services was still prohibited.

Act 1050 actually opens up the uses of those networks that may have been created for the use of the electric system or television signal distribution system. The new language adds permission to use those capacities to provide, directly or indirectly, voice, data, broadband, video, and wireless. There is even an insertion that allows for like use in future constructed or acquired facilities. Reasonable public notice and a hearing are required, which is the normal course of action before making new investments.

SOME SPECIAL CONSIDERATIONS…