The fiber-to-the-farm initiative in Sibley County, Minnesota, has completed the feasibility study and the towns involved are discussing a Joint Powers Agreement. One of the impacted incumbent providers -- Frontier Communications, a rural telco famous for slow DSL) -- has started to spread the usual FUD (fear, uncertainty, and doubt) that is common whenever a massive company is about to face competition.

Though I am tempted to comment directly on Frontier's letter, I'll let the community's response stand on its own. The way they misrepresent the record of Windom should be instructive - this same misinformation strategy is used around the country.  We believe publishing these scare tactics and responses to them is helpful to everyone -- so if your project has received one, please let us know.

Frontier's Letter:

Dear Commissioners:

As a provider of telephone, internet, and video services to our customers in the Green Isle, Arlington, and Henderson areas, Frontier Communications is obviously interested in the "fiber to the home" proposal that has been presented. As a nationwide provider, Frontier is aware of other efforts by municipalities of various types to build and operate their own telecommunications network. While these proposals are always painted in rosy tones, it is important for officials to carefully review the underlying assumptions and projections that consultants make when presenting these projects. Unfortunately, history tells us that the actual performance of most of these projects is significantly less positive than the promises. Often times, these projects end up costing municipalities huge amounts of money, and negatively impact their financial status and credit ratings.

A nearby example would be WindomNet, the city-owned network in Windom, Minnesota. That network, which provides telephone, internet, and video service, began in 2005. The financial results to date have been poor; operating losses of $662,000 in 2006, $1,257,000 in 2007, $326,000 in 2008, and $93,000 in 2009. Additional borrowing by the city was required to make up those losses.

The next time you hear someone claiming that the reason US Internet is slower than international peers is because of our vast landmass with low population density, encourage them to listen to "America the Slow" on American Public Media's Marketplace Tech Report. The title of this post comes from an anecdote in the middle of the story in which a person in NYC (the most dense area of our country) is hosting friends from France and they turn to him and say "I thought you said you had Internet?" in response for what passes as broadband there. I'm sure they laughed for hours if they found out what the host was paying for it. Our sad state of broadband is not an inevitability of geography but a failure of policy that puts private companies first and community needs second. And for the record, the population distribution in France is not so different from the US.

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.

Despite a coordinated campaign by cable incumbent Charter that offered little honest debate or accurate claims, the citizens of Opelika voted yes on their referendum to allow the city to build a broadband network. The City's public power utility will use the network for smart-grid services and a private company will likely contract to deliver triple-play services. Opelika's Mayor had this reaction: This video is no longer available. Mayor Fuller also said:

It’s a great day for Opelika. It’s a great day for our future. It’s a terrible day for Charter,”

One gets the sense that the Mayor took some umbrage at Charter's tactics to prevent the community from building its own network. The day before the election, Stop the Cap! ran a fantastic article about Charter's manufactured opposition to the community network. Phillip Dampier investigated the background and claims of prominent opponents, including Jack Mazzola, who might as well have written some of the articles in the local paper about the Smart-Grid project for how often he was quoted by the reporter (who often failed to offer a countering view from anyone in support of the network).

Jack Mazzola claims to be a member of Concerned Citizens of Opelika and has become a de facto spokesman in the local press.  He claims he is “30 years old and have been a resident of Opelika for almost two years.” During that time, he evidently forgot to update his active Facebook page, which lists his current city of residence as Atlanta, Georgia.  Suspicious readers of the local newspaper did some research of their own and claim Mr. Mazzola has no history of real estate or motor vehicle taxes paid to Lee County, which includes Opelika.

Any community considering a referendum on this issue should read this Stop the Cap! post and learn from it because massive cable companies like Charter all use the same tactics in community after community.

More towns in Utah are deciding whether to support UTOPIA's new plan to expand the network and recover from the significant errors of the first managers. Under the new management, UTOPIA has added new ISPs and thousands of new subscribers, a significant turn around for a network many had written off as a failure. Unfortunately, UTOPIA has too much debt and no capital to expand the network to bring new subscribers online. As we have consistently maintained, building next-generation networks is challenging in the best of circumstances - and the circumstances around the towns in Utah are far from ideal. Most of the information in this post comes directly or indirectly from the Free UTOPIA blog which has excellent independent coverage of the network (as well as stinging critiques of wasted opportunities like the broadband stimulus). I strongly recommend following FreeUTOPIA, but I wanted to comment on some of the recent developments. As UTOPIA and some member cities have formed a new agency to fund further expansion. Five cities have agreed to be part of the new Utah Infrastructure Agency with at least 2 deciding against and more still considering what they want to do. The Salt Lake Tribune has tepidly endorsed the plan (which involves some changes regarding rogue providers - something I want to follow up on). The Utah Taxpayers Association (which is funded by Qwest and Comcast, among others) decided to mount a big protest in Orem to convince the City to abandon UTOPIA. Rather than simply waiting to see what effect the rally would have, UTOPIA responded decisively.

The Utah “Taxpayers” Association thought it would get an upper hand with a BBQ in Orem just before the city council voted on a new construction bond.

What do you do when the media gets key facts about your community network wrong? Set the record straight! This blog post from the Public Affairs Manager in the city of Wilson, North Carolina, demonstrates a good response to errors in an article. In the first case, it offers "clarifications," a better term than errors when dealing with reporters, especially as many reporters have less expertise than we would like in the complicated world of broadband networks, policy, and technology. This is a good excerpt - with the City's response in blue text.

Other conflicts can arise as well. For example, in 2007, when Wilson was developing its Greenlight service, the town tripled its rate for using municipal utility poles from $5 to $15 a year. That raised the pole fee for Time Warner Cable from $82,000 to $246,000 a year, but Time Warner is still paying the old rate while it negotiates with town officials over the issue. Before 2007, Wilson’s pole fee had stayed the same since 1975. The attachment fee increase was not related to Greenlight. The old fee schedule was outdated. By comparison, the cable company’s standard rates have doubled since 1997. “When the regulator becomes your competitor, it’s not a good situation,” said Marcus Trathen, a lawyer for the cable lobby. Wilson and other cities regulate only the pole attachments. The cable and telecom companies are regulated by the State of NC. The local regulation of cable services ended in 2007 after intense lobbying from the cable/telecom companies.

The main issue is to make sure false claims are corrected at every opportunity. These networks and local policies around pole attachments are greek to most people. Any false claim without a response (and some that are responded to) will be believed by many in the community.

Australia is planning to build a nationwide open access network that will be owned by the public. Ars Technica recently covered their progress - Australia has released a consultant report on the proposed network. If the major incumbent, Telstra, works with the government on the network, the costs will be lower. But Australia will not let Telstra dictate the terms of their relationship:

But it's clear that the new network won't be held hostage to Telstra's demands. The consultants conclude that, in the absence of an agreement, [the fiber network] should proceed to build both its access network and its backhaul unilaterally." [src: Ars Technica]

Between the original plan and a revised plan suggested by the referenced study (bullet points here), over 90% of Australians will have a real choice in providers over a FTTH connection whereas the rest will have a combination of wireless and satellite options. The prices are expected to be affordable, and will probably be well below what we pay here in America. The Implementation Study has some words about ownership of the National Broadband Network (NBN):

Government should retain full ownership of the NBN until the roll out is complete to ensure that its policy objectives are met – including its competition objectives

On technology, they reiterate what we have been saying for years:

Fibre to the premise is widely accepted as the optimal future proof technology with wireless broadband a complementary rather than a substitute technology;

Have no fear though, we will undoubtedly hear from many apologists for the private telecom companies that Australiai's NBN has "failed" because it is losing money. Estimates on the break even are many years out:

BN Co can build a strong and financially viable business case with the Study estimating it will be earnings positive by year six and able to pay significant distributions on its equity following completion of the rollout;

Brace yourself for a slew of reports noting the operating losses in the early years as "proof" the government should never have built this broadband infrastructure.

This is a great inside look at how one community built a globally competitive broadband network (probably the best citywide network in the US) and the barriers they faced from incumbent providers Cox and BellSouth. Terry Huval, the Director of Lafayette Utilities System in Louisiana, spoke to the U.S. Senate Committee on Small Businesses Entrepreneurship on April 27, 2010, on the topic of: "Connecting Main Street to the World: Federal Efforts to Expand Small Business Internet Access." Huval's full testimony is available here. Huval's presentation told the back story of LUS Fiber, focusing on the barriers to publicly owned networks in Louisiana.

The FCC National Broadband Plan, on page 153, includes Louisiana as one of 18 states that “have [no-glossary]passed[/no-glossary] laws to restrict or explicitly prohibit municipalities from offering broadband services.” While the Louisiana law did not prohibit Lafayette from providing broadband services, its mere presence provided, and continues to provide, a fertile playground for BellSouth (and its successor AT&T), Cox and their allies to create mischief, resulting in discouraging local governments from stepping in to provide these services even when the private telecom companies refuse to do so.

Louisiana, as with many other states including North Carolina, has powerful incumbents that claim there is an "unlevel playing field" and that local governments have too many advantages in building broadband networks (incomprehensibly, they simultaneously claim that local governments are incompetent and publicly owned networks always fail).

As I noted previously, a community in Colorado - Longmont - will soon vote on whether the local government should be allowed to sell retail Internet services. This community has tried a number of approaches to expanding broadband competition but have not yet succeeded in getting the networks they need. The local paper opposes the measure. However, the editorial frames the issue in a curious way. It claims the ballot measure will "override" state law, which is utterly false. State law says the community has to approve it before they can do it - so the City is complying with the state law.

Those against the measure point to failed municipal-run telecommunication efforts as another reason not to support this measure. That’s fairly compelling, especially when we have no specifics about what type of telecommunications projects the city will pursue.

Those against the measure claim that municipal-run telecommunications efforts have failed. They often point at successful community networks (or even failed privately owned networks, oddly enough), call them failures, and rightly assume that no one will fact-check the assertions. Often, they will gin up some false numbers that suggest a far-off network has lost a lot of money (using their same methodology, it would be crazy for anyone to borrow to buy a house). Regarding the concern over what specific project the city will pursue if authorized, this is an interesting catch-22 because it makes little sense to expend a lot of money on a business plan before a community has the authority to build something. Either decision is difficult and requires a trust in the local leadership and democratic process. Comments to that editorial rightly note that Comcast and Qwest will not prioritize investments in Longmont until they see competition. The private sector has failed to generate competition on its own, so the community is smart to consider spurring competition themselves.

I hesitate to say, "know your enemy," because the carriers should not be our enemy. There are many ways these carriers can continue profiting even without damaging America's standing in international broadband rankings. However, they are instead attacking our efforts to regain parity with peer nations by forming astroturf groups to argue that only they can save us from the problems their lack of investment have created - and then only by reducing regulations on them. How convenient for them... Thanks to Karl Bode for discussing how they operate:

This claim that their membership list is stocked with "consumer groups" turns out to be as bogus as their stated goals, given there's not a single viable consumer advocacy firm among the group's 100 members. BfA [Broadband for America] does, however, include dozens of "co-opted" minority, disability and other industry-funded groups. Said groups are used by lobbyists to pretend the interests and opinions presented to lawmakers have broad public support, and aren't just the monotonal whining of a handful of corporations interested solely in protecting revenues. For example, a group that needs funding for a new events center will agree to parrot Verizon policy positions in public press releases. The National Association of the Deaf [NAD] did as much for the baby bells when Verizon and AT&T were trying to eviscerate existing TV laws, even though the law the group was busy cheerfully supporting resulted in cherry-picked next-generation broadband deployment for NAD's constituents.

Photo used under Creative Commons license - thanks to flickr's limonada.