This is Part 1 in a two-part series discussing comments submitted to the FCC in response to a petition filed by Fiber-To-The-Home Council proposing a new Gigabit Community Race to the Top program.

The Fiber-To-The-Home Council (FTTHC) recently submitted a proposal to the FCC to create a Gigabit Communities "Race to the Top" program. The proposal suggests granting unclaimed portions of universal service funds (USF) to qualifying entities in small and rural markets willing to build gigabit networks. While the proposal may need some adjustments, the idea holds potential for encouraging community owned networks and we hope the FCC takes the next step by opening an official rulemaking proceeding.

What makes this proposal so promising for community networks is that it may not require grantees to qualify as “eligible telecommunications carriers” (ETCs), a technical requirement placed by the FCC on USF recipients. This requirement virtually assures that USF funds go to already established telcos and not to upstart community networks.

Instead, Race to the Top lays out its own qualifying criteria which opens the door for a broader variety of recipients, including co-ops, nonprofits and municipalities, taking a similar approach as the federal stimulus BTOP program. Furthermore, Race to the Top has the potential to improve on BTOP in one major aspect by focusing on last-mile networks, which BTOP grants largely shied away from.

The FCC comment period for this initial proposal has closed and the majority of submitted comments are supportive. But I want to highlight some of the misleading comments submitted by a few industry lobby groups - National Cable & Telecommunications Association (NCTA), Rural Broadband Association (NTCA) and USTelecom. This post will focus on the NCTA, the main lobbying apparatus of the massive cable corporations. A future post, Part 2, will discuss the others.

Google knows how to differentiate its gigabit Internet access from the slower options offered by cable and DSL. Community networks should take notes on effective advertising. 

"As the Internet becomes an essential conduit for work, school and entertainment, gigabit availability is essential,” said Pete Ashdown, CEO of XMission. “Only fiber allows this kind of bandwidth and speed."

DePriest tells me that EPB's fiber network is "a great profit center." In the four years the service has been active, the utility company has increased its mid-tier speeds three times — from 15 Mbps to 30 Mbps, from 30 Mbps to 50 Mbps and now from 50 Mbps to 100 Mbps. About 2,500 elite users will enjoy 1-gig speeds by the beginning of October.

AT&T charges $65 a month for 24/3Mbps service — its fastest — with a 250GB monthly usage cap, currently not enforced. For $5 more, EPB customers get 1,000/1,000Mbps with no usage limits or overlimit fees.

Mr. DePriest said Comcast had some 122,000 customers on the EPB grid when EPB launched its rival program. He said Comcast is down to around 75,000 and will likely drop to around 60,000 next year.

Longmont's City Council and municipal power and communications utility are getting serious about bringing fiber to the people. We reported earlier this month about the decision to allow voters to decide how fast they want that next generation network. Longmont Power and Communications (LPC) already plan to expand the existing network to households and businesses but face a long, slow time table over many years if they expand incrementally without bonding. The City Council will ask voters if they will authorize a $44 million bond issue to pay for capital costs, interest and debt-service reserve.

Many in Longmont recall the ferocious opposition they faced during the two previous referendums. The cable industry (mostly Comcast) spent hundreds of thousands of dollars during each campaign, saturating citizens with a deceitful advertising campaign.

Once again, local citizens are forming their own group to support the measure. A Scott Rochat Longmont Times-Call article reports that the group, Friends of Fiber, recently met in Longmont's TinkerMill "hackserspace" to plan initial strategy. The main take-away for participants was "we need more people."

The group does not want to be taken by surprise by the same astroturf groups that spent $250,000 dollars to defeat the referendum question in 2009. While a second referendum passed in 2011 despite even more astroturf spending, Friends of Fiber are taking no chances and mobilizing now. Both of those referenda dealt with the authority to operate the network, not finance an expansion.

From the article:

[Organizer Scott] Converse said the group had to be ready for just as big a fight now. One tactic will be borrowed from the national political campaigns; creating software that will scan the Internet for negative references to the bond issue so that the group can respond quickly.

Vince Jordan, LPC Telecom Manager, note that the utility has updated the original service offering from $59.95 for 25 Mbps to $49.95 for residential 1 gig service. From the meeting:

As we reported back in May, Cedar Falls Utilities (CFU) now offers citywide gigabit broadband. Mudd Advertising is one local company poised to take full advantage of the new blazing speeds. Mudd invited officials from CFU into its studio for a live panel discussion about the new gigabit service and what it means for the community. The video is embedded below and is available via MuddTV - look for the 6/19/2013 archived show.

When asked what gigabit service means for the community, CFU’s Director of Business Management Rob Houlihan said “We have a lot of businesses that transfer huge files to and from their customers and this enables them to do even more of that activity.” Houlihan elaborated by saying that gigabit broadband opens up “a whole new host of opportunities for them to innovate.”

The community of Shafter enjoys savings, better public safety, and more educational opportunities with the municipal fiber network that we wrote about two weeks ago and discussed in last week's podcast. In 2006, Shafter spent $200,000 on its I-Net to serve local schools and government in the core of the downtown area. While the community had originally planned to build a FTTH network, the tumultuous economy dictated otherwise and the community adjusted its course.

The community is now expanding infrastructure to several areas closer to the edge of town in order to serve local business. With next-generation fiber infrastructure in place, Shafter expects to attract several providers interested in serving businesses over its open access network. Completion is scheduled for the fall of 2013.

A 25 mile fiber backbone ring is now under construction and will loop to two industrial areas near the edge of town. Both complexes sit very close to the two main railroad lines that run through the town and provide easy access to transport. In addition to the larger loop, one of the industrial areas, will contain a 10 gigabit ring and the city will light two separate commercial rings to provide 1 gigabit service. This phase of Shafter's project will cost $1.5 million and required equipment will cost another $600,000. The network is underground, with 99% in city road rights-of-way. The entire path travels through greenfield areas so there is almost no infrastructure to avoid or remediate. General fund dollars, rather than bonding, borrowing, or grants paid for the entire open access network.

We learned from IT Director Scott Hurlbert that oilfield services company, Baker Hughes, invested $70 million to build a campus in Shafter. AT&T serves the company now with copper lines but "they don't like it," says Hurlbert. A 2.1 million square feet Target distribution center sits nearby waiting to switch to the Shafter fiber network.

We introduced you to Olds, Alberta and their community network O-Net in 2012. Now this community of 8,500 will be the first Canadian "gig town" where residents will have access to a gig at incredibly low prices. 

CBC News reports that the Olds Institute for Community and Regional Development, the nonprofit organization building the network, recently approved the upgrade. Residents with 100 Mbps will have access to a gigabit with no increase in price. Depending on how they bundle, the price for Internet will range between $57-90 per month.

CBC's Emily Chung noted how much of rural Canada offers only dial-up or satellite. Olds used to have the same problem; businesses were considering leaving town:

"We had engineering companies here who were sending memory chips by courier because there wasn't enough bandwidth to deal with their stuff," recalls Joe Gustafson, who spearheaded the project to bring a fibre network to Olds.

...

"Now there's no talk about people leaving because of bandwidth challenges."

The $13-14 million project, which also included a video conference center and 15 public use terminals for residents, launched in July 2012. The organization acquired a $2.5 million grant from the province of Alberta and a $6 million loan from the town of Olds. When incumbents were not interested in providing service over the network, O-Net adapted:

"We said, 'Well I guess if we're going to do this, we have to do our own services,'" Gustafson recalled.

The Olds Institute spent $3.5 million to buy the necessary electronic equipment to run internet and other services on the network and to build a central office to house it all. Last July, it launched O-Net.

The community-owned service offers not just internet, but also phone and IPTV services — TV signals carried on the network that includes dozens of SD and HD channels, and movies on demand that can be paused and later resumed.

The Rockbridge Area Network Authority (RANA) is almost ready to launch its open access network in north central Virginia, home to about 22,000 people. A recipient of the BTOP stimulus program, the main focus is connecting community anchor institutions and spurring economic development. However, it has been built to allow service providers to also offer DSL to some residents in the area.

Dan Grim, GIS Manager for Rockbridge County, and one of the driving forces behind the network was kind enough to walk us through the project. In early 2007, the cities of Buena Vista, Lexington, and the County joined forces to commission a study to determine the need for a county wide broadband network. The three jurisdictions matched funding from the state Department of Housing and Community Development to pay for the study, completed in 2008.

Grim had already consulted with local provider, Rockbridge Global Village, about using a regional network to improve public safety mapping. Rockbridge Global Village President, Dusan Janjic, suggested a bigger project and that the three entities apply together for American Recovery and Reinvestment Act (ARRA) funding. 

Richard Peterson, Chief Technology Officer from nearby W&L determined that the school needed a new and updated data center. In 2009, RANA was officially formed as a collaboration between the local governments and Washington & Lee. The University joined the group and contributed $2.5 million toward a $3 million grant fund match. With the grant fund match to improve their chances, RANA applied for a $10 million BTOP award and received $6.9 million in funding through round two in 2010.

Peterson passed away in 2011. Grim notes that without Peterson, the network would never have expanded so far and may not have become a reality. The data center was later named after him to honor his memory. Network construction started in February 2012.