In late July, the FCC released a Notice of Apparent Liability (NAL) in which it found the telecommunications giant AT&T Southeast liable for a $106,425 forfeiture. The agency also ordered the company to return $63,760 of E-rate funds it described as “improperly disbursed.” AT&T overcharged two school districts in Florida and, in a response released last week, are trying to justify their pilfer by blaming the E-rate rules and the schools themselves, much as a criminal blames victims for being such easy targets.

Funded By Phone Users

E-rate funds are collected as a surcharge on telephone bills; the funds go to schools to help pay for telecommunications costs at schools, including telephone, Internet access, and infrastructure costs like fiber network construction. The amount a school district receives depends on the number of students in the district that qualify for free and reduced lunches; schools with higher numbers of low-income students are reimbursed at a higher rate. Given that many of our schools are funded through property tax rolls, this means that schools in poorer neighborhoods that are more likely to need help with their budgets receive the higher reimbursement rates.

According to the program rules, phone companies and Internet Service Providers (ISPs) that participate are required to offer the “lowest corresponding price” to schools. Providers aren’t permitted to charge rates that exceed the “lowest corresponding price” or bid higher than that price on contracts to serve similarly situated entities if those entities are eligible to receive E-rate funds. School districts do not carry the burden of getting the lowest corresponding price - telephone and Internet access providers are responsible to ensure that they offer the lowest price in exchange for the opportunity to participate in the program. Between July 2012 and June 2015 alone, AT&T received $1.23 billion in E-rate funding nationwide.

Filching In Florida

In August 2013, we reported on Lakeland, Florida’s dark fiber network that serves local schools, government facilities, and local businesses. Over the past year or so, community leaders have discussed whether or not to expand the use of Lakeland’s fiber resources.

A 2015 feasibility study suggested several other ways to use Lakeland’s existing 330 miles of fiber infrastructure to enhance connectivity for economic development and residential access. As the city examines its finances and its future in the coming months, city leaders are considering six avenues to meet the community’s needs. The options, some recommended by consultants, vary in type and investment and the City Commission will begin discussing the possibilities as they meet in the upcoming months.

Leaders Consider The Next Move

Lakeland is examining public policies that will encourage better connectivity, such as dig-once, permitting changes, and right-of-way regulations. With smart policies in place, Lakeland can lay the groundwork so they can build off progress made today.

In 2013, Polk Vision, a group of organizations, businesses, government, and individuals, along with the Central Florida Regional Planning Council developed the Polk County Broadband Plan. Another option is using the Plan as a guidepost and aligning Lakeland’s plan to support the goals set in the Polk County Plan. Connecting the schools to a larger network would be part of that plan.

Lakeland, like many other communities wants to give providers operating in the community today the opportunity to work with them to improve services. Another option the city will pursue is reaching out to providers in Lakeland and engaging in discussions to upgrade or expand services to better meet the needs of the community. (We haven't seen much success when communities pursue large incumbents, but smaller local providers are sometimes more willing to work with communities.)

When communities decide to proceed with publicly owned infrastructure, they often aim for open access models. Open access allows more than one service provider to offer services via the same infrastructure. The desire is to increase competition, which will lower prices, improve services, and encourage innovation.

It seems straight forward, but open access can be more complex than one might expect. In addition to varying models, there are special challenges and financing considerations that communities need to consider.

In order to centralize our information on open access, we’ve created the new Open Access Networks resource page. We’ve gathered together some of our best reference material, including links to previous MuniNetworks.org stories, articles from other resources, relevant Community Broadband Bits podcast episodes, case studies, helpful illustrations, and more.

We cover: 

• Open Access Arrangements
• Financing Open Access Networks
• Challenges for Open Access Networks
• U.S. Open Access Networks
• Planned Open Access Networks

Check it out and share the link. Bookmark it!

Reports have recently surfaced from The Detroit News and Patch.com that a town in Michigan is now fighting Comcast over who owns their network.

The Backstory

Fifteen years ago, West Bloomfield, Michigan, population about 65,000, wanted an Institutional Network (I-Net) to connect all the important services, like emergency response, police, fire, and water, with a dedicated high-speed network. The town entered into a franchise agreement in order to share the construction costs with the incumbent cable company, which at the time was MediaOne. According to the township, MediaOne offered to contribute $400,000 to the cost of construction as part of that agreement.

The agreement was transferred to Comcast in 2000; Comcast acquired MediaOne in 2002. MediaOne and successor Comcast have provided "free high-speed bandwidth transport as well as interconnectivity" during the life of the network claims Comcast in a letter submitted to the court. The cable giant also describes the practice as a "benefit not provided by Comcast's competitors" and wants it to stop. The franchise agreement expired on October 1 but was renewed until 2025.

To The Courts

Comcast and the town are now fighting over ownership of the infrastructure. With Comcast demanding new fees, the town is bringing a lawsuit. Comcast, however, maintains that it owns the I-Net that the town uses for all its important communications. The Detroit News reports that the township is coming out swinging:

The Orlando Sentinel published this op-ed about local government action for broadband networks on March 11, 2015. 

Local governments should make broadband choices
By Christopher Mitchell

Community broadband must be a local choice, a guest columnist writes.

When Comcast announced plans last year to invest hundreds of millions in theme parks in Florida and California, its customers may have wondered why the cable giant wasn't using those funds to deliver a faster or more reliable Internet connection. While Comcast's Universal Studios faces competition from Walt Disney World, most people don't have a real choice in high-speed Internet access.

The Federal Communications Commission has just boosted the broadband definition from 4 megabits per second to 25 mbps. At that speed, some 75 percent of Americans have no choice in providers — they are stuck with one or none.

The rest of America is living in the future, often because their local government rolled up its sleeves and got involved. In some of these communities, the local government built its own network and others worked with a trusted partner. Chattanooga's city-owned electric utility built the nation's first citywide gigabit network, which is about 100 times faster than the average connection today.

Google is famously working with some bigger cities, whereas local provider GWI in Maine has partnered with several local governments to expand gigabit access.

However, the big cable and telephone companies have almost always refused to work with local governments. Instead, they've lobbied states to restrict the right of local governments to build or partner in this essential infrastructure.

In Florida, the law puts restrictions on local governments that do not apply to the private sector, such as a strict profitability timetable that can be unrealistic for large capital investments regardless of being privately or publicly owned. Some 20 states have such barriers that limit competition by effectively taking the decision away from communities.

In 2014, Broward County completed its transition from an expensive leased data, video, and voice communications system to its own fiber network. The southern Florida county is now saving $780,000 per year with plenty of room to grow. With the transition to an IP-based telephony system, the County also saves and additional $28,000 per year.

Pat Simes, Assistant CIO of the county, recently contributed a profile on the project to Network World.

In 2009 when the network was too slow to be effective, county staff knew they had to act. Costs were increasing 15% each year as the number of lines grew and the demand for bandwidth increased. The County also had to provide funding to reach locations that the carrier's network did not serve. The situation made it difficult to budget; there was always a need to fund unexpected expansions and increasing service.

Several groups in Enterprise Technology Services (ETS) began working together to develop a way to improve systems for both groups:

Working together the teams developed a 3-year strategic initiative to upgrade Broward County to a 10 GigE core network infrastructure.   Part of the plan called for reducing complexity and duplication of infrastructure, so the County also decided to converge the voice and data networks and, with voice and data traversing the same circuits, network redundancy would have to be increased because a single line outage could cause a location outage for both critical services.

While its network continues to offer last generation speeds at high prices and their customer service reps go viral harassing customers who try to leave their grasp, Comcast executives have decided it is time to invest hundreds of millions of dollars to upgrade... their theme parks. That's right, as they shift call centers to the Philippines to save money, they are reinvesting it into roller coasters.

Having acquired Universal Orlando Resorts as part of their 2011 merger with NBC Universal, Comcast has decided to step outside its core business of providing Internet access, cable TV, and phone service in noncompetitive markets. According to a March CED Magazine article, Comcast plans to invest hundreds of millions in theme parks in both Florida and California in an effort to challenge Disney’s traditional dominance of the field. Attractions in Orlando will include an 1,800 room beach resort and a new Harry Potter ride.

This investment in rides occurs against the backdrop of falling infrastructure investment in the broadband industry, despite rapidly increasing bandwidth demands and claims by ISPs that services such as Netflix are straining their networks and must pay extra for “fast lane” service.

It is possible to imagine a world in which broadband markets are sufficiently competitive to force Comcast, CenturyLink and other incumbents to invest sufficiently in building out and upgrading their networks, delivering better service to their customers. But in our world, Comcast can spend the comparatively small sum of $18.8 million on lobbying (in 2013 according to OpenSecrets.org), becoming the seventh biggest campaign contributor in the nation and pushing legislation like the recent Blackburn amendment that eliminates potential public sector competitors.

We last took a look at Palm Coast’s FiberNET over two years ago when Broadband Communities featured the open access fiber network along Florida’s upper east coast. Due to its initial focus on community anchor institutions and incremental build out, FiberNET serves as an outstanding example of how to justify a network investment with cost savings. We recently spoke with Courtney Violette who created the initial business plan for FiberNET under his previous role as Palm Coast’s CIO; he is now a Managing Partner with Magellan Advisors, an international broadband planning firm.

A presentation on the Palm Coast government website shows how FiberNET generates hundreds of thousands of dollars in annual cost savings for the City of Palm Coast, Flagler County School District and Florida Hospital. The data is impressive. The City of Palm Coast alone saves around $160,000 per year by switching to FiberNET for its networking needs.

Flagler County School District is likely the biggest beneficiary of cost savings in the community. Before FiberNET came onto the scene, the District paid Bright House Networks more than $500,000 per year for network services over a hybrid fiber-cable network. Now Flagler County School District pays around $300,000 for faster, more reliable services over FiberNET’s all-fiber network. These savings paid for the schools’ initial cost of connection after just one year.

Florida Hospital and its affiliates are also saving big. Affiliated doctors’ offices and clinics are required to maintain a 10-Mbps (minimum) connection with the hospital. Before FiberNET, these connections cost around $900 per month from the local incumbent. FiberNET now offers them for $250 per month. Similarly, the Hospital itself saves tens of thousands on its annual networking costs by switching to FiberNET.

Gainesville Regional Utilities (GRU) has been deploying fiber in the north-central Florida home to the University of Florida (UF) since the late 1990s. We briefly mentioned them last year when Gig.U teamed up with GRUCom, GRU’s telecom division, to connect neighborhoods and businesses surrounding the University with fiber broadband. We’ve since taken a deeper look at GRUCom’s work and like what we see.

GRUCom was born after the FCC reclaimed the spectrum GRU used for microwave control of its SCADA systems. GRU naturally switched to fiber, and in the process of running lines for its utilities, it ran into crews doing the same for Shands Hospital, part of the University. Realizing the substantial demand for fiber broadband across the county, GRU created GRUCom to serve that demand more efficiently.

GRUCom Director, Ted Kellerman, points out that, as an enterprise division of GRU, GRUCom has a mandate to generate profit. This essentially means that the network only expands on a business case basis, so prices can vary across customers depending on connection costs. Despite this constraint, GRUCom manages to provide reliable high-speed data services at reasonable prices. 

GRUCom connects 100 public facilities including government, fire department, utilities and Alachua County Schools and Libraries. All facilities are on redundant fiber rings with route diversity and 10-Gbps capacity. Seven locations receive 1 Gbps service while the rest take either 10 or 100 Mbps. The average cost for 10 Mbps connections is $400 and $900 for the 100-Mbps links.

It is no secret to our readers that communities throughout the country have transitioned from leasing services from big corporations to building their own fiber networks to save public dollars. Some create collaborations between various entities to reduce costs. Jacksonville is the latest to dabble in collaboration and has found a way to save $200,000 on connectivity costs each year.

In a recent Government Technology article, Chad Vander Veen describes how the city found a way to eliminate leased lines and switch to a faster 1 gigabit connection via fiber (the article incorrectly says "gigabyte" in multiple places where it mights gigabit) . The City's Information Technology Division (ITD) began developing relationships and bringing various agencies together to explore its options. They held monthly meetings that included the mayor's office, public safety agencies, and libraries. Through these meetings they learned the city was eligible to participate in the Florida Lambda Rail program.

Lambda Rail is a nonprofit independent research and education network that connects universities, schools, libraries, and research facilities across the state. The network has an extensive network of fiber across the state. Because the City of Jacksonville is responsible for its libraries, it qualifies for service from Lambda Rail. Within 45 days, Lambda Rail served city facilities. 

“This is a great opportunity for all the partner agencies to work together to provide superior service and save money at a time we need to make every dollar count,” said Mayor Brown in a statement. “With a growing number of websites and applications helping to expand the reach of city government, we owe it to taxpayers to invest wisely in the most effective and efficient systems to keep everyone connected.”

Saving public dollars by elimintating leased lines and collaborating is certainly a positive outcome. Unfortunately, this solution may limit the community in the longer term. Working with entities that only serve nonprofit or specific entities means that others who need connections in the communities - including both residents and local businesses - will not directly benefit from this investment.