Fast, affordable Internet access for all.
David Cameron, city administrator, said the proposal is not so much about dissatisfaction with current providers as it is about finding new revenue for the city. Cameron said revenue from electric services has been a key source of funding for various projects and necessities for the city. That “enterprise” fund is getting smaller, Cameron said, and an alternative funding source is needed. “We have done a good job managing accounts, building a reserve,” Cameron said. “We want to keep building on the programs we have. It takes money and funds to do that.” City officials discussed the issue for the last 18 months and decided to put it to a referendum. Voters will decide the issue May 22.That is a fairly unique reason. Most communities want to build these networks to encourage economic development and other indirect benefits to the community. Given the challenge of building and operating networks, few set a primary goal of boosting city revenue.
If approved by voters, the city plans to spend $8.3 million to install 100 miles of fiber optic cable directly to homes and businesses. The city should be able to repay the debt in 12 years, if things go according to a feasibility study presented to the city’s board of directors in January.
At the current rate, EPB can shave seven years off the time it will take to pay off its telecom debt, becoming virtually debt-free by 2020 instead of 2027 as projected, Eaves [EPB CFO] said. Even so, the government utility still is spending money to sign up new customers, a process that will increase debt until 2013, Eaves said. The utility has $51 million in total debt so far, but it only needs 30,000 customers to break even on operational costs, Eaves said. "We are currently cash- flow positive from an operations standpoint, but still increasing debt to fund the capital associated with signing up new customers," he said.As we frequently remind our readers, finances are complicated. Even though the network continues to do very well, its debt will increase for a few more years while it continues rapidly acquiring new subscribers. Each subscriber takes years to pay off the debt of connecting them. Recall that EPB unexpectedly got a Department of Energy stimulus grant to deploy its smart grid much more rapidly than planned for. As the electric division owns much of the fiber fabric, the grant does not impact the finances of the Fiber-Optic division, aside from allowing EPB to roll the network out to more people more rapidly. The changed plan increased their costs and their revenues over the original plan.
Soeffker, who farms with her husband in rural Sibley County, said the dish receiver they must use works fine in good weather but balks during heavy rain and snowstorms. Meantime, her husband struggles with a lagging Internet speed of .6 megabits a second that falls short of meeting his business needs when he’s selling commodities.The committee organizing the network set a goal for demonstrating the interest of something like 50% of the population in the target area. There has been some confusion as to exactly how many they should have before committing to the project but with just two mass mailings, they have received nearly 3,000 positive responses (of the over 8000 households that could be served). This is a very strong response. To keep the public informed, they have had numerous public meetings in each of the communities that will be involved. To be as open as possible, they would often have three meetings in a town per day -- a morning, afternoon, and evening meeting to accomodate everyone's schedule. As this project moves forward, no one can claim the group has been anything but open with the plan. On January 19, they had a major meeting with over 100 people attending, including many elected officials from the towns. For over two and a half hours, they had five presentations and numerous questions.
Broadband for the Rural North Ltd has been registered as a Community Benefit Society within the Industrial and Provident Societies Act 1965 (IPS), and is controlled by the Financial Services Authority. Shares will be issued to provide funding for the project and members of the community will be encouraged to subscribe to the share issue. The share issue will comply with the Enterprise Initiative Scheme established by HMRC to encourage individual share holdings in new and developing companies. Under certain circumstances investors could reclaim 30% of the value of shares produced. As a community company, the project will be funded and to a greater extent built by the community for the community. Our ambition is to keep expenditure, where possible, within the community. In addition to purchasing shares, the community will have the opportunity to “purchase” shares in exchange for labour and materials during the project build. The initial share offer will be £2,000,000 of shares with a face value of £1, to be launched in late 2011 and open for 1 year. The project is expected to commence on site in early 2012 and completed by the year end. The initial network will be progressively added to over subsequent years until approximately 15000 properties in adjoining rural parishes are completely connected to the FTTH network.To keep costs low in their rural areas, B4RN will be taking a non-traditional approach:
B4RN will adopt a different approach; we will lay the duct not on the highway but across the farmland on the other side of the wall. Digging a narrow trench and installing a duct within it is dramatically less expensive across private farmland than along the highway.
ECFiber is using an innovative funding method to extend its network, supported by local citizens who lend funds that enable build-out to local neighborhoods within and across member towns. Citizens who invest as little as $2500 allow ECFiber to reach all households along designated routes. ECFiber determines where it will build by choosing routes that reach the greatest number of unserved businesses and households, which are then connected to ECFiber’s state-of-the-art fiber-optic service.These people are literally investing in themselves. ECFiber is an InterLocal Contract with a Governing Board composed of a representiative from each member town (of which there are 23). Investors are purchasing tax exempt 15 year promissory notes that effectively earn 6% interest (due to the one year holiday from interest and principal). They have raised $340,000 in this round of financing, which will allow the network to pass 60-65% of Barnard's 950 residents.
The installation delay has put the city in a pinch with its lender, Regions Bank.
LUS estimates that the citizens of the community have saved 5.7 million dollars—in part direct saving from LUS' cheaper phone, video, and internet services and in part as a consequence of Cox lowering its prices and giving out special rates. Those special rates were discussed in the meeting with Huval pointing out that Cox had petitioned for and received permission to treat Lafayette as a "competitive" area. That meant that Cox could offer special deals to Lafayette users and, as we all know, has offered cuts to anyone who tries to leave. Those "deals." as Huval pointed out to Patin don't include the rural areas of the parish where Cox has no competition.But it doesn't end there. LUS Fiber, due to anti-competitive laws pushed through the state's legislature to handicap public providers, is actually subsidizing the City -- providing more benefits to everyone, even those who do not subscribe to the network.
Again it all goes back to the (un)Fair Competion Act. One of the things in that act a concession that LUS Fiber would be able to borrow from LUS' other utilities just like any other corporation could set up internal borrowing arrangements. This is not a subsidy, it's a loan—with real interest. One of the efforts to raise an issue by Messrs Patin and Theriot centered around "imputed" taxes. Those are extra costs that Cox and ATT got the state to require that LUS include in order to force LUS to raise their price to customers (you!) above the actual cost. (Yes, really. See this.
Phase 1, with construction under way (see photo) and scheduled to go live in early August, brings an ultra-high-speed fiber loop from the ECFiber central office near I89 Exit 3, along VT Routes 107 and 12, to the center of Barnard. ECFiber expects to begin connecting businesses and residents who live on this route in early August and will provide detailed subscriber information closer to that date.ECFiber has 23 member towns, but Barnard could be the most enthusiastic. This is as grassroots as it gets:
At its June meeting, the ECFiber Governing Board authorized an initiative to extend service to the rest of Barnard town. This requires a second round of capital-raising through a similar "friends and families" offering directed specifically to residents, businesses, and others who wish to support the deployment of universal broadband in Barnard. Loredo Sola, ECF Governing Board Chair commented, "When we first took our plan to Barnard, we were inundated with residents offering to pay the entire cost of extending the Phase 1 trunk to their homes. This enthusiastic response inspired us to authorize a Barnard-only fund drive." ECFiber will be organizing informational meetings for Barnard residents and businesses to explain the details of the plan. When sufficient funds have been committed to build out the entire town, the Barnard Local Fund will close, and construction of Phase 2 can begin.Barnard had 94% of the community presubscribe! The success of ECFiber comes without any support of the state, which has continued to pretend wireless connections and out-of-state corporations will provide the networks necessary for the economic development needed by communities. Valley News took note of the story and expanded on it:
Without other funding streams, it could take seven to 10 years to build out to all 23 towns, Nulty said, but the company is committed to seeing it happen.