community savings

Content tagged with "community savings"

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Public Ownership is Good for Business

Opponents of public ownership like to claim that publicly owned broadband is somehow hostile to business -- this is a a major Time Warner Cable talking point in North Carolina. The reality is that community networks are incredibly biased in favor of local businesses. Most community fiber networks resulted out of economic development needs, when public leaders realize the fast, reliable, and affordable access to the Internet is a key to attracting businesses (and that massive absentee incumbents rarely care to invest enough to attract those businesses). Unfortunately, the argument resonates among a public that rarely remembers the U.S. economy was built on key public infrastructure investments -- from roads and highways to water works to universal electrification, if the public didn't own the infrastructure outright, it attempted to regulate in the public interest. And though regulators are frequently captured by those they regulate, the outcome is still better than allowing unaccountable electrical trusts to arbitrarily decide how much to gouge their customers. When Google was search for a community partner in building its gigabit network, it was not shy about public ownership -- we now know that a key factor in the decision was Kansas City's publicly owned electrical company. Being owned by the City allowed Google a single point of contact and an assurance that they could all work together to build the network. Surveying businesses in three early FTTH communities revealed dramatic savings:
In terms of fiber-enabled cost savings, 120 businesses in Bristol reported an average of $2,951 in savings per year, while, in Reedsburg, 33 cited annual cost savings averaging $20,682. Twenty Jackson businesses reported cost impacts due to fiber, with one large organization reporting a total of $3 million in savings. The other 19 Jackson respondents reported a net average cost increase of $3,150 per organization.
Make no mistake, public ownership of infrastructure is not anti-business, it is pro-business.

Chattanooga Smart-Grid Receives Record Recognition

We've been raving about Chattanooga' FTTH network and smart-grid for quite some time now, but others are just learning about it. Chattanooga's Electric Power Board serves some 170,000 households and businesses across 600 sq miles. Though we have mostly focused on the triple-play benefits of the network

Chattanooga had been named one of the 2011 Top 21 Intelligent Communities of the year previously, but more recently made the cut to a Top 7 Intelligent Community. Time will tell if is awarded the Intelligent Community of the year.

Green Tech Media covered the completion of the network pass and activation of electric grid smart switches at the end of 2010.

[A]ll of its 170,000 electricity customers could benefit from the infrastructure. The network will serve as the conduit for 80 billion data points on electricity use per year that could help the utility run more efficiently, reduce outages, and give customers more control over their monthly electricity expenses.

“Chattanooga is the epicenter of energy technology,” said Harold DePriest, president and CEO of EPB. “One of our biggest jobs is to exploit this technology for the benefit of our community.”

With power outages previously taking a $100 million/year bite out of private businesses served by EPB, the new FTTH network will enable a much smarter network that will radically decrease those outages and thereby make businesses more productive. By mid 2012, businesses will see a 40% decrease outage time. Over time, as EPB's grid grows ever "smarter," those losses will likely decrease further while also providing energy users (residential and business) more opportunities to manage their power consumption.

For those who only associate the smart-grid with enabling time-of-use pricing (paying more electricity during periods of high demand), there are other important, if hidden benefits:

Spanish Fork Telephone Benefits Community

Spanish Fork, a well-regarded community broadband network, is now offering triple-play services on its hfc network. Previously, the town was offering broadband and television but recently added telephone after feeling the time was right. From the article:
John Bowcut, director of Information Systems for Spanish Fork, said 15 percent of homes signed up when told telephone service was available over the cable. The network only used door hangers to advertise at first because it intended to have a slow rollout. Then the service was promoted in the city newsletter. SFCN's phone rollout was slow for a reason. Small neighborhoods were notified one at a time, which allowed the network to handle the load. Bowcut said they didn't want to open sign-ups citywide and then have to tell people their connection date was three months out. He said the most people had to wait this way was 10 days. Initially about 1,500 homes signed up for phone service, out of 5,534 homes in Spanish Fork.
The new telephone service runs an economical $14.95 with a variety of features. 75% of the town takes at least one service from the network, perhaps because of the great customer service:
Perrins was a beta tester for the system. He thought going through that process was awesome. They fixed every problem quickly and fine-tuned the network. "It was fun because the employees were so excited and eager to find and fix the problems."
Prior to the telephone rollout, only some 60% of the community took a service from the network, as explained in this article
About 60 percent of Spanish Fork residents already subscribe to SFCN's cable TV and high-speed Internet. The customer appeal of the city-run communications utility is that Spanish Fork provides both the infrastructure and the service -- a practice that was actually outlawed by the Utah Legislature in 2004, though Spanish Fork was grandfathered in. This means SFCN can cut out any middle-man service provider, which amounts to about $2 million in savings each year, Mayor Wayne Andersen said. "I think it was a sad day when the state Legislature put the kibosh on that sort of thing," Andersen said.

Wilson's Greenlight Ahead of Schedule, Deals with TWC Predatory Pricing

Wilson's Greenlight community fiber network is ahead of schedule. They continue to operate ahead of the business plan, despite a few difficulties that offer lessons to up and coming community networks. We recently covered the fallout from their application to the broadband stimulus program where they had to disclose network information to their competitors. Fortunately, that was not the only news last month from North Carolina's first all-fiber citywide network. They also surpassed 5000 subscribers and remain 6-9 months ahead of their business plan in take rate, according to the Wilson Times.
The number of customers is expected to reach 5,300 by the end of the fiscal year if the current trend continues, according to Dathan Shows, assistant city manager for Broadband and Technical Services. The city's current business plan calls for Greenlight to reach 5,000 customers by the end of the third full year of operation, which will be June 2011.
This is not the first time the network has exceeded projections;
the network was built faster than expected and quickly jumped out ahead of take rate expectations. One of the reasons Greenlight may be growing is its attention to local needs, as illustrated by the network finding a way to televise local football matches that otherwise would not have been available. However, the Wilson Times story goes into much greater detail regarding the competition from Time Warner Cable. As we regularly see, Time Warner Cable is engaging in what appears to be predatory pricing to retain customers and starve Greenlight of new subscribers. A lesson to other community networks, Wilson is documenting the deals TWC uses to keep subscribers. All communities should keep these records.
"Time Warner Cable's market tactics include anti-competitive pricing that interferes with Wilson's ability to secure customers through normal marketing," the application [for broadband stimulus] states.

Spanish Fork Community Network Adds Telephone

In 1999, the city of Spanish Forks in Utah began building a $7.5 million publicly owned cable network to offer broadband and cable television services. Since then, the network has created some $2 million in community savings from the lower rates created by competition. In February of 2009, Spanish Fork Community Network received the "Business of the Month" award from the local Chamber of Commerce. Last month, they announced that they will be adding telephone services to the network by contracting with a private provider that will actually offer the service. When most people think of Utah and broadband networks, they think of UTOPIA, the open access network that has had a variety of problems. The Spanish Fork Network has been quick to note their successes (I suspect they are also frequently attacked by the incumbent-loving Utah Taxpayers Association group):
Bowcut gave his budget report and said SFCN had over $400 thousand in retained earnings. "We are not going under."
He also added that they built the network at a time when private providers refused to invest in the community. Hat tip to FreeUTOPIA for noting these stories.

Wilson's Greenlight Keeps Time Warner Prices Low in Community

Catharine Rice gave a terrific presentation detailing the ways Time Warner has responded to the municipally-owned Greenlight fiber-to-the-home network: raising the rates on everyone around them and cutting great deals to Wilson residents. I saw the presentation on the Save NC Broadband blog which also has a link to her slides - make sure you follow along with the slides. She details how Time Warner has raised rates in towns around Wilson while lowering their prices and offering better broadband speeds in Wilson. Once again, we see that a community building their own network has a variety of benefits: a superior modern network that is community owned, lower prices on the last-generation network from the incumbent, and some investment from the incumbent. Now the question is whether Wilson's residents will be smart enough to support the publicly owned network in the face of Time Warner's low low prices - a recognizing that a few short years of low prices (for low quality) are not worth abandoning the publicly owned network and the benefits it has created in the community.

Cable pricing in the Raleigh-Durham-Cary NC Market from City of Wilson, NC on Vimeo.

Jackson, Tennessee, Profiled

The Jackson Energy Authority (JEA) network now has over 16,000 subscribers and offers speeds up to 100 Mbps for local businesses and 25 Mbps for standard residential users.
Jackson is considered one of the most technologically advanced cities in the U.S. We have four competitors in the market with AT&T, Bell South, Charter and JEA. We computed that over $8 million to $9 million has been saved by residents in this city when compared to other cities of its size because of the competition.
These are the kind of hard-to-quantify savings that too often go unnoticed in discussions about the value of publicly owned broadband projects. What is the value of competition? How much economic development has occurred directly from the JEA network and indirectly from the lower prices and greater investments that result from competition?