Tag: "startup"

Posted February 9, 2011 by Christopher Mitchell

For two years, National Public Broadband (led by Gary Fields and Tim Nulty) has worked with Lake County, Minnesota, to build a universal rural FTTH broadband network to everyone in the County and some nearby towns in Saint Louis County. Toward the end of 2010, the relationship became somewhat tense as some county commissioners questioned what NPB had told them about Burlington Telecom, and a number of media outlets raised questions about Nulty's relationship to BT's problems without actually investigating the story.

Now the Lake County News-Chronicle (which, over the course of this story, has taken the time to report facts rather than following the lazy lead of the Star Tribune and Duluth News Tribune), reports that Lake County and National Public Broadband are kaput. Lake County is seeking a new partner to build the project.

Lake County could not reach agreement on a permanent contract with National Public Broadband, its consultant firm for nearly two years. The two sides battled for nearly two months and couldn’t solve issues based on bonus payments and the ability for the county to fire NPB without cause and without penalty. The negotiations had bogged down work on the actual project, Commissioner Paul Bergman said, and the board wanted a fresh start.

Additionally, due to the state of financial markets, the County is planning to self-fund the $3.5 million local obligation required to access to the broadband stimulus award. Lake County hoped to bond for the matching funds but the current interest rates make that an fiscally unwise approach.

While this does not change the project, it will change the perception of the project and open it to increased attacks from those who don't want the County to build a network (despite the fact that private providers have no interest in providing anything other than slow DSL and cable networks).

The County had long maintained that no public money would be used. However, most people will likely not care as long as the project keeps its promise to deliver fast, reliable, and affordable broadband to the community. This is the need -- and people need to stay focused on achieving this goal.

At a commissioner meeting in late December, Gary Fields commented to the Board that...

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Posted January 31, 2011 by Christopher Mitchell

Update: We have covered the second round of financing from ECFiber here.

The East Central Vermont Fiber Network, connecting some 23 rural towns, announced back in July that they would self finance a pilot project as a preliminary step to securing the full funding for the project.

Right around Thanksgiving, last year, David Brown updated the community on progress via an article in the Vermont Standard:

It would have been terrific to get the $50million needed to build out all 35,000 telephone and electric poles with 1,500 miles of fiber optic cable. Along the way, we learned an important lesson. We noticed that government money went to existing telephone companies to expand existing networks rather than funding start-ups like ours. That’s when the ECFibernauts decided on a change in strategy: build a small network, get a few real customers, and deliver rock-solid ultra-fast Internet to them as a proof of concept – all using our own money. Then, when all the critical components are up and running, go to the commercial markets for funding needed to expand out to all 23 towns.

The ECFiber Governing Board and our technology partners ValleyNet, Inc. are fortunate to have several experienced financiers within our ranks. Working with our attorneys (to keep everything legal) ECFiber is reaching out to the community with a private offering of tax-exempt promissory notes. As of this writing, we have raised more than three-quarters of what is needed to complete Phase I of our project. The ECFiber hub is now under construction on Waterman Road in Royalton and an initial pole attachment application for 500 poles is being processed. Phase I will bring ECFiber service to selected businesses, schools, town facilities and residents in Bethel, Barnard, Stockbridge and Royalton.

This is a commitment that few other communities have made -- self-financing a start up portion. It is actually quite inspiring, though one quickly grasps the huge need from the stories EC Fiber has collected. Any community hoping...

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Posted November 18, 2010 by Christopher Mitchell

Yet another town has decided to take responsibility for their broadband future: a small Florida community has secured financing and is moving forward with their publicly owned FTTH network.

The City Council voted unanimously Monday night to approve the $7.3 million in funding with Regions Bank in Orlando. City Manager Lisa Algiere told the council members the city would be doing most of its business with the local Regions Bank.

The funding will come in the form of three bonds: a series 2010A Bond, which is good for 20 years and has an interest rate of 3.61 percent; the second bond is a Series 2010B Bond and is for five years with an annual interest rate of 3.20 percent; while the third bond is a Series 2010C Bond and is good for one year. The funding secured by the city is a drawdown loan, meaning it will only take what it needs and only repay that portion.

The network has been branded Greenlight (though the website is not yet fully functional). Greenlight is also the name used by the Community Fiber Network in Wilson, North Carolina.

Light Reading interviewed a network employee, shedding more details than have been released elsewhere.

He says they are passing 7,000 premises, but Wikipedia only notes a population of 2,000 in 2004, so there is more than meets the eye at first glance. They financed the network without using general obligation bonds, working with a nearby bank (Regions is a big bank, headquartered out of state).

Local competitors are AT&T and Comcast, though both offer extremely slow services; the fastest downstream speed available from Comcast is 6Mbps. The new network, as do nearly all recent community fiber networks, will offer much faster connections, the slowest being 10Mbps.

This is a good sign that communities in Florida can still move forward despite the many...

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Posted October 18, 2010 by Christopher Mitchell

As Salisbury prepares to officially launch its publicly owned FTTH network offering triple-play services, it offers lessons for other communities that want to follow in its footsteps. As we wrote a month ago, Fibrant has candidly admitted it cannot win a price war with incumbents. Companies like Time Warner Cable have a tremendous scale advantage, which allows them to price below cost in Salisbury because the large profits from all the non-competitive markets nearby can subsidize temporary losses.

On October 10, the Salisbury Post ran a story "Fibrant can't match cable company specials." Alternative possible titles for the article could have been "Cable Co cuts prices to drive competition from market," or "Time Warner Cable admits customers pay different prices for same services." Interestingly, when Fibrant unveiled its pricing originally, the headline read "Fibrant reveals pricing" rather than "Fibrants offers speeds far faster than incumbents."

A lesson for community networks: do not expect the media to cover you fairly. The big companies have public affairs people with relationships with the press and they often buy a lot of local advertising. This is not to say all local media is bought off -- far from it -- but local media will have to be educated about the advantages of community networks.

Quick question: When you hear this quote, who do you first think of?

"We always work with customers to meet their needs and budget."

The cable company, right? Well, that is Time Warner Cable's claim in the above Salisbury Post article. Later in the article, a local business owner expressed a different sentiment: "Time Warner has the worst customer service I have ever dealt with."

The business owner goes on:

“Fibrant may have these same kind of issues, however I can actually go to the source to deal personally with someone who is vested in the community, not spend two hours on the phone and never solve the problem as I do with TWC,” he said.

“Even if pricing is higher, I would make the change. Price is important, but quality and service is tantamount.”

Speaking of the services...

...
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Posted September 14, 2010 by Christopher Mitchell

I just spoke with Danna MacKenzie of Cook County and Gary Fields of National Public Broadband (working with Lake County) to find out just how excited they are about yesterday's announcement of broadband stimulus awards. Both Lake and County (separate projects) have been funded to build fiber-to-the-home networks to everyone on the power grid in the region.

They are pretty excited.

In a few years, these North Shore Communities will likely have better broadband options than the metro region of Minneapolis and Saint Paul -- a far cry from the beginning of this year when a single fiber cut stranded the whole north shore.

Bob Kelleher at Minnesota Public Radio covered the awards:

Combined, they will connect 37,000 residents, 1,000 businesses and 98 institutions such as hospitals and schools.

Cook County actually has a double whammy - they already stood to benefit from the North East Service Cooperative, which is building high capacity fiber-optic lines through the North Shore to offer middle-mile backhaul and connect local government facilities and schools.

As of yesterday, they will also get a fiber-to-the-home network from the Arrowhead Electric Cooperative. Cook, currently served in part by Qwest, has little access to true broadband -- some 37% have access to anemic DSL connections and the rest are stuck with dial-up.

Details of the award from Kelleher at MPR:

Joe Buttweiler, who directs membership services with the Lutsen-based Arrowhead Electric Cooperative, said 70 percent of the federal award is a grant and the remainder a loan. He said the cooperative will add another $600,000 for capital.

Back in April, Blandin's Broadband blog published the short summary of the Arrowhead project:

Arrowhead Electric Cooperative proposes to build and operate a fiber optic network to the residential and commercial...

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Posted August 2, 2010 by Christopher Mitchell

Highland Communications Services will soon be the newest community-owned FTTH network. It is on schedule to start offering services to businesses in September and some residences in October. A local news story details some of the costs and contracts behind the network.

The project will be paid for by a $9 million Electric System Revenue Bond issue, utilizing the Build America Bond program, created by the American Recovery and Reinvestment Act, as an incentive to communities to put people back to work. Build America Bonds will allow the City to issue taxable securities and then receive a subsidy from the U.S. Treasury equal to 35 percent of the interest.

Highland's population is approximately 10,000.

Please note the spelling error in the story - they are building a head-end, not a "dead-end" (despite the accusations of some).

Posted July 9, 2010 by Christopher Mitchell

The end of June brought an end to an initial phase of the Wired West campaign for real broadband in rural Massachusetts. When we previously looked in on the Wired West efforts, they had 39 towns supporting the idea.

By June 26th, that number had grown to 47.

The local paper outlined the overwhelming support and next steps.

Once the non-profit has been formed, financing options would have to be identified, and preliminary design and cost estimate work would start.

None of the cost of the project would be borne by the towns, Webb said.

Ongoing maintenance cost and debt service payments would come from money paid to the agency by the service providers, added Andrew Michael Cohill, president of Design Nine, a consultancy hired to help WiredWest through the next phase of development.

A previous article discussed a cost estimate of the network and how much money residents send outside their community for service.

Monica Webb, a spokesperson for WiredWest, said that a consultant who met last year with representatives from Mount Washington and 10 other towns in southern Berkshire County estimated the cost of building a fiber-optic network for that region at $27 million.

But, Webb said, the consultant calculated that the roughly 12,000 households in the region were already paying an average of $125 a month for Internet and other telecommunication services – an amount that adds up to $18 million a year that people “are putting in an envelope and sending outside of your region.”

The most recent announcement relating to the project discusses how a recent federal broadband stimulus grant to the Massachusetts Broadband Institute will aid the Wired West network.

This will enable a robustmiddle-mile network to be built by the Massachusetts Broadband Institute (MBI) in Western and North-Central Massachusetts that will serve 123 communities. This wholesale network will bring MBI’s...

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Posted May 10, 2010 by Christopher Mitchell

Back in early March, Highland Illinois, broke ground on its publicly owned FTTH network project. Plans call for connecting some businesses by the end of this year and connecting everyone by the end of 2011.

KMOV in St. Louis covered the network:

The entire concept is expected to cost $13 million. About $9 million of the start-up costs will be funded by bonds - a move voters signed off on last year.

Video:

Posted April 30, 2010 by Christopher Mitchell

Lake Minnetonka Communication Commission -- a group representing a number of suburban communities located west of Minneapolis -- is seeking to build a community-owned FTTH network. LMCC has decided not to seek funds from the broadband stimulus programs and instead seek private funding (likely from a revenue bond offering).

Much like Lafayette in Louisiana, these communities mostly have access to broadband already, but it is slow and overpriced. They are motivated to build a faster network that responds to community needs.

As is common with community networks, they have a significant hurdle in finding the start-up funding needed to pursue full funding for the project. Before they can approach the bond markets, they need to establish a business plan and demonstrate they are capable of building and operating the network. These costs can be substantial, but will be repaid after a successful bond offering.

We've added Tonka Connect to the links in the right sidebar and wish them the best of luck.

Posted February 22, 2010 by Christopher Mitchell

Good news out of Louisiana - the LUS Fiber deployment in Lafayette is running considerably ahead of schedule. This is especially important because Louisiana law makes requirements on publicly owned networks to break even within a relatively short time period, explicitly favoring private companies in law.

The city should be fully passed this summer, allowing anyone to take one or more of the triple play services. Fortunately, many are taking the full triple-play:

Although LUS is not releasing the exact number of customers who have signed up for fiber services, Huval said it is "many thousands" and that a higher-than-expected number are signing up for all three services at once.

Networks succeed financially when they generate high amounts of revenue per user - ARPU in industry terms. Because the fixed costs are so high to connect users, the low revenues generated by only a single service (like telephone) may take many years to pay off the connection expense.

The schools are also making use of the network:

Besides serving residences, LUS Fiber is also being offered to businesses throughout the city, and the wholesale numbers have been at or above expected, Huval said. All Lafayette Parish public schools also are connected to the system, and the technology was used for a partnership among Carencro High School, LITE, Louisiana Public Broadcasting and a San Francisco, Calif. school system, during which students were able to teleconference and collaborate with each other.

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