A recent article discussing testimony from the President of the industry trade group, National Cable & Telecommunications Association (NCTA) reminded me once again that Congress and the FCC have utterly given up on true broadband competition for millions of of Americans.

As with the broadband stimulus funds being handed out by the Commerce Department, NCTA is concerned that the USF money not go to overbuild its members. "It would be a poor use of scarce government resources to subsidize a broadband competitor in communities--including many small, rural communities -where cable operators have invested risk capital to deploy broadband services," McSlarrow says.

This seems like a common sense argument. Why would we want to subsidize broadband for those who already have a single option (underserved) when others have no choice at all (unserved)? Unfortunately, building networks to solve the problem of the unserved is all but impossible without simultaneously serving some who are underserved. This is because the unserved are often in areas so remote and expensive to serve, there is no sustainable business model to serve only them. So the idea that we could somehow only target the unserved with networks is extremely suspect. Unless we want to endlessly subsidize networks in these areas (which companies like Qwest emphatically want because they would likely collect those subsides endlessly), we need to encourage sustainable networks that reach across those already served, underserved, and unserved.

He added that it also might discourage the incumbent from continuing to risk that capital. "Government subsidies for one competitor in markets already served by broadband also might discourage the existing provider from making continued investments in its network facilities.

I certainly respect this argument up to a point. But when it comes to essential infrastructure, we know that most existing providers (particularly absentee-owned massive companies) are delaying investments in network facilities anyway because the lack of true competition allows them to delay making the investments more common in our international peers (where true competition exists, often as a result of smarter government policies than we can muster here).

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.

While researching the Wired West Network in rural Massachusetts, I learned about another community broadband network. The little town of Warwick built a wireless network for itself; the story behind it gives a glimpse into the ways that the federal approach to broadband really fails small communities. Miryam Ehrlick Williamson described their motivations and experiences. In 2008, after considering their options, they voted to borrow $40,000 in a town meeting (Warrick has 750 people) to build a simple wireless system that would be far superior to the existing options of dial-up and satellite (neither of which are a service that could properly be termed broadband). State and federal programs ostensibly meant to help towns in this position do little good:

We know about a USDA program meant to bring broadband to rural America. Our information is that most of the money has gone to suburban communities in Texas, and we don’t have a professional grant administrator to chase down any money that might be left. We’re aware that the Massachusetts governor just signed a $40 million act establishing the Massachusetts Broadband Institute, to figure out how to bring broadband to unserved and underserved towns. We’re also aware that the money will go to vendors to develop regional systems and we don’t have the patience to wait the two or three years it will take for anyone to get around to thinking about maybe serving us.

Ultimately, the City was able to lend itself the money:

As it has turned out, we didn’t need to borrow — town financial officers found the funds without going to the bank for them. We got the necessary permits from the owners of two towers here, bought the equipment, got a couple of people trained to install the equipment, and turned on our first customers in March, 2009.

Between a local mountain and available cell tower, the topology apparently fits a fixed-wireless approach (at least for a significant part of the population).

The private sector is not going to expand broadband to everyone. Some places simply do not offer enough promise of profit. This story out of Wisconsin, "Residents Beg for Broadband" not only reinforces this truth, it looks at what happens when people depend on the private sector to control essential infrastructure.

Some Berry residents may have to move if they can't get high-speed Internet access, according to town officials, because their employers require them to have the service for working from home. "Parents have told us their children are at a disadvantage by not having high-speed connections," Town Chairman Anthony Varda wrote in a recent letter to TDS Telecommunications, the town's Madison-based telephone provider. "It is critical to the success of rural students, people working from home, and residents serving on nonprofit boards, committees and local government," wrote Varda, an attorney with DeWitt, Ross & Stevens.

Their property values are going down because few people want to live someplace without fast and reliable access to the Internet. To cap it off, Wisconsin is one of 18 states with laws to discourage communities from building their own networks. TDS puts on an act about how difficult it is to tell these people that they aren't getting broadband ... but if they were to build it themselves, I wonder if TDS would sue them like it did Monticello. In asking the state PUC to require TDS to expand, the residents are taking a unique approach. I can't really see it working under the modern rules. It long past time we realize the limits of the private sector: The private sector is simply not suited to solve all problems. Matters of infrastructure are best served by entities that put community needs before profits. (Image: Liberty rotunda mosaic at Wisconsin State Capitol, Madison, Wisconsin, a Creative Commons Attribution Non-Commercial No-Derivative-Works (2.0) image from photophiend's photostream)

Sibley County plans to pay for half of a feasibility study (matching funds to be provided by Blandin Foundation) to examine FTTH possibility in this piece of rural Minnesota. It would connect cities, schools, and more, with services run by a cooperative. According to the article,

Many rural communities are realizing the only way to get the Internet service they need is to build the network themselves.

In the spirit of the times, my response is GOLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLLL! People who aren't fans of the World Cup can translate that as, "correct." The involved towns apparently have some broadband options, including cable Internet (3-6Mbps down and 512/768kbps up). There is some DSL but also some unserved areas. Increasingly, we see communities building next-generation networks out of a recognition that the private companies will not invest enough for these communities to take advantage of modern technologies. The study should be finished by the end of the year. Photo by Jackanapes, used under creative commons license.

The Chelan Public Utility District in Washington began its county-wide fiber-optic network build. They have since passed some 80% of the county but are temporarily pausing expansion efforts. Chelan is a rural county and the network is not expected to break even for quite some time. In Washington, state law limits the powers of public utility districts to offer broadband. As with communities in Utah, these public sector entities are forced to operate an open access network and are unable to offer services directly. While the open access model is a great one for some communities (and one we encourage when the numbers work), it can be difficult to implement depending on local circumstances. The Wenatchee World recently covered the decision to hire a consultant to identify means of lowering costs. The network has cost $80 million to get to this point and will require an additional $40 million to connect the remaining 15-20%. The network can provide access to over 30,000 residents, businesses, and community anchors (schools, hospitals, muni facilities). Subscribers choose from a variety of service providers for services and take rates vary from 30%-60% depending on the area. The network is operating at a loss (probably due to a combination of the high costs of FTTH in rural areas, the low take rates, and lower revenues from operating on a purely wholesale basis). Residents were conflicted about the network's inability to pay for itself but a majority have continued to support it because they often have no other broadband options. However, the current economic climate has resulted in more concern about the costs. Chelan PUD has apparently covered the losses from broadband (as well as some sewer and water services) with the sales of surplus electricity on the wholesale market.

Ran across this interesting story out of Silverton, Colorado - where Qwest has refused to provide a reliable telecommunications connection to the least populous county in Colorado. Recall that Qwest's refusal to offer redundancy in Minnesota's most rural County led to a total communications blackout for twelve hours, shutting down public safety and businesses alike. Silverton is the only town in rural San Juan County. The City is splitting the costs ($121K) of a new publicly owned fiber-optic loop with the County and apparently the State is offering a grant for the balance. As we emphasize time and time again, cities that move from leasing multiple lines from the incumbent to owning their network radically increase available speeds while cutting costs. Silverton estimates it will save 50% or more in its telecom expenditures. These savings will pile up over time because owning the network typically leads to decreasing costs over time whereas leasing lines offers much less control over future telecom budgets. But perhaps the more interesting aspect of this story is that San Juan County is the only County in the state not connected with fiber-optic lines. Qwest has:

a 10-year, $37 million contract to provide high-speed connectivity to every county seat in Colorado, forming a statewide network known as the Multi-use Network, or MNT.

To save money, Qwest is using a microwave (wireless) connection for San Juan County, which is far less reliable than would be a fiber-optic connection. For such a rural area, microwave might be a good secondary connection, offering a backup in the case of a fiber cut or natural disaster. However, making that the primary connection is what happens when Qwest is calling the shots. Qwest is not looking out for the interests of first responders, residents, or businesses in Silverton, it is looking for "a compelling business case" in their own words. And this is exactly why Qwest should not be in charge of essential infrastructure.

Stop the Cap has an interesting series looking back at the history of electrification in the U.S. Part I of the three part series looks at the early years of resident electrical deployments:

Those who believed electricity would deliver social transformation to average Americans were stymied by power companies that wouldn’t deliver enough capacity to make the latest big appliances work. Blenders, mixers, toasters and other small electrical appliances could work, assuming you didn’t have too many lights turned on at the same time, but washers, refrigerators and electric ovens were out of the question. When consumers inquired about upgrading their service, they were refused by most electric companies. After all, most power company executives believed “illumination-grade” service was more than sufficient for virtually every American. In all, they consistently refused to upgrade facilities to at least four-fifths of their customers, telling them they could make do with what they had. The electrical industry defended this position for years, and even paid for studies to defend it. A willing trade press printed numerous articles claiming the vast majority of Americans would never require higher voltage service, and it was too expensive to provide anyway. A select minority of customers, typically the super-wealthy, were the exception. In fact, marketing campaigns specifically targeted the richest neighborhoods, offering “complete service,” because the industry believed it would quickly recoup that investment. That, in their minds, wasn’t true for middle class and low income households. In fact, low income neighborhoods of families making between $2,000 and $3,000 were often bypassed by electric companies completely.

The parallels to broadband are enormous and the self-interested arguments of privately-owned incumbents have not changed. Neither has the fight over public ownership, as we see in Part II:

As municipal power attracted attention, some in the private power sector balked. Not only were these companies delivering good service to customers, they were often doing it at far lower prices.

In Mankato, the local Fox station covered the stimulus grants that will allow WindomNet to expand and offer services to nearby rural communities. This is an excellent example of how publicly owned broadband networks can partner with others nearby to expand access:

Jackson Mayor Mitch Jasper says, "Windom took the lead and brought a bunch of communities together saying hey, we can put together a program that applies for stimulus as a group rather than individuals and all of us jumped onboard and the end results is a 12 million dollar broadband project."

Though I did not spend a lot of time following stimulus proposals, two excellent proposals did catch my eye from Idaho and I hoped that at least one of them would be funded. Alas, neither was funded by NTIA or RUS. These are exactly the networks we need throughout the country, and Idaho is exactly the state that could benefit greatly from federal assistance. I hope these projects have better luck in the second round or in securing future funding from RUS outside the stimulus project. (This is not to suggest I disapprove of the Coeur d'Alene Reservation Fiber-to-the-Home (FTTH) Project that received funding - I am not as familiar with it and therefore have no comment on it.) The town of Ammon, some 13,000 people near Idaho Falls in eastern Idaho, developed a proposal for an a type of next-generation open access network in that it would offer greater flexibility to subscribers and service providers than many current open access networks. The other project, to serve the Northern Panhandle area, was designed with Ernie Bray, who previously consulted on the Powellink network in Wyoming. The Boise Weekly briefly discussed these projects a few weeks ago, noting their open access approach that would serve residents, businesses, and key institutional anchors with fiber-optics:

"Every entity we need to work with is already a stakeholder; we're ready to go," he said. "And we will use revenues for expansion and build out. We're trying to expand the concept of a service provider and services beyond just the triple play, voice-video-data," he said. "Telemedicine is a service, hospitals are service providers. We want to take fiber to every home and every business, then connect them to libraries, schools and job services so they can take advantage of programs to help lift them up."

Local jobs are at stake and incumbent providers are doing little to help:

Quest [Aircraft], who builds the Kodiak airplane, they've gotta exchange large engineering files in real time; 250 jobs are at stake.

Verizon is busy trying to offload all of its rural territories on Frontier (a company famous for slow and poor service) so it isn't about to upgrade facilities in Idaho.