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Justifying a Network with Indirect Cost Savings - Community Broadband Bits Episode 80
A Look at Mediacom Propaganda in Emmetsburg, Iowa
Earlier this month, a majority of voters in Emmetsburg supported a proposal to issue bonds to build a fiber network. Nevertheless, the measure failed because Iowa requires a 60% majority when general obligation bonds fund all or part of a proposed project.
Years ago, the community voted to establish a municipal cable communications or television system. Emmetsburg leaders feel the time is right to realize the community vision. The proposed project would have used revenue bonds in addition to general obligation bonds.
We reported on Mediacoms' efforts to derail the vote with misleading lit drops across the community and we recently received new details on Mediacom's propaganda. The literature does not contain a "Vote No" statement, which may have allowed Medicom to avoid reporting it as an election expense.
Both pieces read like a talking point primer for industry executives. The letter from Senior Vice President Dan Templin, suggests that Mediacom is already operating gigabit service over fiber in Emmetsburg and that they intend to expand that service to business clients. The letter does not suggest that their gigabit service is affordable or reliable, neither of which are terms commonly used to describe Mediacom's services.
Mediacom was ranked last in a 2012 Consumer Report survey of 50,000 people. He, or rather his legal and marketing team, suggests the people of Emmetsburg and Mediacom "work together to leverage our [Mediacom's] investment." The people of Emmetsburg can begin working with Mediacom to "leverage" that investment by sending an email to a vague "info" email address.
Thomasville Removes Local Tax, Citing Strong Broadband Revenues
Thomasville is one of six cities served by Community Network Services (CNS) in rural southwest Georgia. We’ve covered Thomasville and CNS in the past, highlighting the benefits of reliable high-speed broadband in these remote rural communities. But one benefit we haven’t covered yet is quite remarkable - Thomasville residents have been paying zero fire tax thanks in large part to revenues from CNS. The City’s fire tax first hit zero in 2012 and was recently maintained there by a Thomasville City Council vote in September.
Thomasville feeds its General Fund with net income (what the private sector would call profit) from its utility services. For 2013, this net income is estimated to reach $8.5 million. What’s more, Thomasville residents enjoy utility prices below the state average. So nobody can complain the City is taking advantage of utility customers by charging excessive rates.
According to a recent Public Service Commission survey, Thomasville residents pay $3.32 per month below the state average per 1,000 kilowatt hours of electricity. And CNS customers who bundle services see annual savings of up to $420. It’s a true win-win - residents get affordable utilities and the City applies the net income to running public services like the police and fire departments, lowering property taxes in the process.
Monticello Fiber Price War Offers Key Lessons for Broadband Competition
Morristown Network Creates Cost Savings and Spurs Job Growth
Located in the northeast corner of Tennessee, Morristown Utility Systems (MUS) offers gigabit broadband throughout a region that covers 30,000 residents and businesses. I recently spoke with MUS General Manager and CEO, Jody Wigington, about FiberNET’s progress and he had much to report, starting with over $5 million in cost savings for local businesses, residents, and the local government itself.
Asked about cost savings to Morristown’s city government, Wigington pointed to $840,000 in total savings from a smart meter program - a combination of lower annual power consumption and operational efficiencies. Another $20,000 in annual savings is due to the county not having to pay out-of-town IT contractors to maintain its network because the required expertise can now be found locally thanks to MUS’s dedicated network specialists.
Morristown businesses and residents are also saving, to the tune of $3.4-million annually thanks to FiberNET’s introduction of lower prices in the local broadband market. That’s $3.4-million, every year, which can be spent locally rather than being siphoned out of the community to corporate shareholders.
In terms of revenue, FiberNET generated $8.6-million during the most recent fiscal year and is projected to generate $8.8-million during the current one. FiberNET's solid financials have translated into increases in MUS’s payments in lieu of taxes (PILOT) to the city, which now amount to $350,000 per year, up from $150,000 in 2010. FiberNET’s strong financial performance resulted in MUS becoming cash flow positive just two years after launch, and net income positive after five years. Both of these key milestones were reached significantly quicker than initially projected.
MUS FiberNET’s impact on economic development is also notable. Oddello Industries, a contract furniture manufacturer that relies on FiberNET for its communications, recently announced a $4-million expansion in Morristown, resulting in 228 new jobs. Oddello CEO, Tom Roberts, cited “reliable utilities” among the reasons for investing in Morristown. This growth is part of a larger trend for Oddello, which has grown its Morristown presence from 35 to 415 employees in just the past year.
Shafter Fiber Network, Then, Now, and Next - Community Broadband Bits Episode #56
Coin-Operated Hypocrisy In Action: A Case Study in Monticello
- There just isn't enough time.
- They are really, really ignorant. Their papers and posts are so filled with errors in basic fact, it would take a LOT of time to correct them - which brings me back to point 1. (Nonetheless, they are influential because the lobbyists of the companies that fund them distribute their propaganda throughout the capitol that they appear to actually live in.)
- Mentioning them can legitimize them.
Winchester, Massachusetts, Defeats Plan for Town and School Technology Fund
Winchester, Massachusetts, recently offered voters the chance to create a special fund earmarked for school and government technology infrastructure. The question came during the special election to fill an empty Senate seat vacated by Secretary of State John Kerry. The technology fund proposal, to be funded by taxpayers, did not pass but offers an interesting approach for communities seeking to ensure community anchor institutions have the connections they need.
Wicked Local Winchester reported on the "technology stabilization fund:"
Under the proposal, the fund would receive $350,000 from taxpayers in fiscal year 2014. That figure would increase by 2.5 percent each year. Each Winchester household would pay approximately $50 in taxes into the fund in the fiscal year that begins July 1, according to the proposal.
The fund cannot be used for any end-user devices, including computers, laptops or classroom technology like smartboards. Instead, the fund will cover upgrading and maintaining the town and school computer network.
Opposed community members criticized a lack of detailed plans for the fund and challenged whether it would save public dollars. In the days before the vote, some council members publicly questioned the need for technology improvements.
The proposal failed 54 percent to 46 percent on June 25th. Wicked Local Winchester noted that several voters they met at the polls did not know about the proposal before the election. Support seemed strong from those voting yes:
“I think if we’re going to have an excellent school system, we need the technology to support it,” resident Anne Poskitt said after voting at the Jenks Center.
Resident Patricia Shea expressed similar sentiments after voting at the Lynch School, saying that she feels strongly about the importance of technology because she has three children who attended Winchester schools.
“If this is what we have to do to [improve technology], I support it,” she said.
Also from Wicked Local:
"Level Playing Field" Padded With Public Dollars to Private Providers
Municipal broadband networks have been gaining traction across the country. It's easy to see why: In many rural and low-income communities, privately offered broadband services are nonexistent. In its 2012 Broadband Progress Report the Federal Communications Commission counted nearly 20 million Americans (the vast majority living in rural areas) beyond the reach of broadband.
The Free Press' Timothy Karr's words are supported by the growing number of pins on our Community Network Map. We connect with places nearly every day where municipal networks fill the cavernous gaps left by the massive corporations. Large cable and telecom providers do not hide their aversion to servicing rural areas, yet year after year their lobbying dollars persuade state politicians to introduce bills to stop the development of municipal networks. Karr reviewed recent efforts to use state laws to stifle community owned networks in a Huffington Post article.
As readers will recall, this year's front lines were in Atlanta, where HB 282 failed. We hope that loss may indicate a turning point in advancing municipal network barriers because the bill lost on a 94-70 vote with bipartisan opposition. If it had succeeded, Georgia would have been number 20 on a list of states that, thanks to ALEC and big corporate sponsors like AT&T, Comcast, Verizon, and Time Warner Cable, have decided to leave their citizenry begging for the private market to come their way.
Time and again, the supporting argument goes like this:
"A vote 'yes' for this bill means that you support free markets and free enterprise," [Rep Hamilton, the Chief Author of HB 282] said [on the House Floor].
A 'no' vote means that you want more federal dollars to prop up cities, Hamilton said.
But Karr points out that some policy makers are starting to question that argument, with good reason. From his article:
Rural Leverett Network in Western Massachusetts Moves Forward
Leverett, Massachusetts' broadband initiative has moved to the next phase in bringing fiber to residents. The town selectboard recently decided on a bidder to build the community owned network. G4S designed the network and also works with the Massachusetts Broadband Institute (MBI) as it brings a middle mile fiber network to towns across the western half of the state [PDF of service area].
An article in The Recorder alerted us to the development. Readers will recall that Leverett townspeople voted to ok a modest property tax increase as a way to help finance the ftth build out. From the article:
Indeed, after years of trying to convince private business to develop and offer high-speed telecommunication service in rural western Massachusetts, Leverett’s first-of-its kind network is being built with the help of a $40 million state bond, $47 million in federal stimulus funding and the town’s willingness to borrow to build infrastructure to attract service.
D’Errico said the cost of the project should be lower than $300 a year per median $278,000 property owner over 20 years.
...
...D’Errico said the $300 annual tax addition for the median value property is likely far lower than what residents are paying for their telephone, satellite dishes and cable service connections, and that having the town own the infrastructure likely means that the service contracts should also be a fraction of what they would cost otherwise.
Before construction can start, utility poles will need to be made ready for placement of the fiber optic cable. While this stage of the prep work is expected to take up to six months, hanging the cable would only take about three months.