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Short History of Powellink Muni Fiber in Wyoming

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I wrote this short case study of the Powell network in Wyoming for our Breaking the Broadband Monopoly report but it never got published on this site. As we noted a year ago, Powell bought its system back from investors last year. The city of Powell started talking about a fiber network in 1996 but did not make progress for almost ten years. They developed a plan to build a FTTH network and lease it to an outside operator. The incumbents declined to partner with the City and later spent considerable effort to derail the City’s efforts. However, the City found a local cooperative, TriCounty Telephone (TCT), willing to offer triple-play services on the City’s network. Financing the deal took more time than expected because the City was unwilling to commit public money directly or even as a backstop if the network fell behind on debt payments. While the City worked on the financing, cable incumbent Bresnan and telephone incumbent Qwest tried to convince the state legislature to abolish Powell’s authority in this arena. The legislature did create new obstacles for cities building such systems but Powell was grandfathered in. In late 2007, the City agreed to an arrangement where TCT would exclusively lease the network and make up shortfalls in debt payments if required for a period of six years. After that period, the network would be open to other service providers as well and it would be the City’s responsibility to cover any shortfalls if needed. If the City chose not to appropriate in that situation, the investors could take the network. Estimates suggested a 33% take rate would allow the network to break even by the fifth year but most expected a higher take rate. In early 2008, Powell completed the $6.5 million bond financing. As is more common in small builds, they immediately connected a line to the home rather than waiting for the subscriber to sign up. They trenched a fiber to the side of every house regardless of whether they were taking service, putting the fiber in a box on the side of the house. If the occupant signs up, a crew only has to install electronics rather than bringing a line down from the pole.
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Lake Minnetonka Communities Complete Market Study

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The Lake Minnetonka Communications Commission has finished its market study of some 17 communities in the western suburbs of Minneapolis. LMCC has long been examining solutions that will expand fast, affordable, and reliable access to the Internet.
Dick Woodruff, chairman of the Tonkaconnect working group and a member of the Shorewood City Council, said that overall the results were positive. He said that the majority of the people surveyed indicated that they had no objections to the LMCC getting into a competitive FTTP business and that they would become customers if the Tonkaconnect services were offered at a lower price than providers already in the area. … While the results of the market survey are encouraging to the Tonkaconnect group, there is still more work to be done before they can deem the project feasible. Woodruff said that the next step in the process would be to complete a business plan and financial model for the fiber project.
LMCC will consider what to do next at a meeting in June but has not budgeted funds for the next step in building a universal FTTH network in those communities that choose to take part. Regarding the survey:
The first question, though, asked if respondents believed that the LMCC and local governments should "provide locally-owned, competitive choice of TV, Internet and telephone services to every home, business, school, governmental buildings, etc. in the LMCC area."
lmcc.png Strong majorities consistently agreed that LMCC and local governments should get involved but the survey was also very clear that respondents were mostly concerned with price. We see the same results elsewhere, particularly in times of economic stress. Consider a national cable network, "National Cable." In Anywhere USA, most people subscribe to National Cable at a monthly rate of $140/month for phone, video, and broadband. Anywhere decides to build a community fiber network and charge $105 for similar services but the broadband is considerably faster and more reliable using the next-generation network. National Cable responds by offering a deal for $95/month for what people had been paying $140/month for.
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Idaho Town Builds Incremental, Open Access Network

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A small Idaho town near Idaho Falls in the eastern part of the state, Ammon, is creating a new approach for a small open access fiber-optic network. When the vision is fully realized, all businesses and residents will have affordable, fast, and reliable access to the Internet and other telecommunications services via a multitude of independent service providers. The town has adopted a new ordinance spelling out its vision and began building the backbone of the network. The purpose is well written and could serve as a model for others, excerpted here:
To protect the public right-of-way by improving both the management and regulation of competing demands through the elimination of duplicate fiber optic facilities within the public right-of-way. … To reduce the cost of maintaining the sidewalk, pavement and public facilities located within the public right-of-way by minimizing the number of pavement cuts and dislocation of other public facilities necessitated by the construction or installation of fiber optic facilities. To foster competition among retail broadband service providers by providing open Access to the City Fiber Optic System.
Ammon had previously applied for broadband stimulus funds but was not awarded a grant or loan. Undaunted, they continued to examine how they can build the network their community needs to attract economic development and maintain a high qualify of life. An article in the Boise Weekly profiled the network and the man behind it:
Bruce Patterson is the one-man IT department for Ammon, a small town of 13,000 near Idaho Falls. He is fed up with companies overlooking the town when they discover the cost of Internet is prohibitive. … "The City of Ammon wants to be the road, not the traffic," Patterson said. "Nondiscrimination is what we believe is the right thing. We wanna be completely open to every consumer and provider."
As we see time and time again, this community has Internet access from at least one provider, but it does not meet the needs of the community.
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Tennessee Bill to Encourage Economic Development Killed by Telco Lobbyists

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As we continue to report on depressing campaigns to deny people fast, affordable, and reliable access to the Internet (as Time Warner Cable is doing in North Carolina), we are also making an attempt to highlight good legislation (as we recently did in Washington state). In that spirit, we turn to HB 2076 / SB 1847 in Tennessee From the bill summary:
This bill urges all municipalities to endeavor to utilize advanced broadband systems in their operations and to encourage the construction of advanced broadband systems.
The full bill is available here [pdf] but the most interesting part is what was not included. As reported by Andy Sher of the Times Free Press, the bill was intended to go much further.
The bill would have let the municipal utilities extend service up to 30 miles outside their service areas.
Unfortunately, the powerful incumbent lobbying machine (including AT&T, Comcast, and others who already hate having to compete with technologically superior networks in several Tennessee communities) killed the bill, a blow to the future of economic development in the state. Neighbors of Chattanooga, including Bradley County, desperately want access to the impressive 1Gbps network Chattanooga built -- the most advanced citywide network in the country. epbfiber.jpg Harold DePriest recognized the power of AT&T and Comcast in the Legislature, but vowed not to give up.
“Well, we would like to see the bill pass, but I think Gerald was dealing with the reality of the difficulty of moving the bill through the committee at this point in time,” he said Friday. “We will be back.
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Pro Community Broadband Bill in Washington Will Return Next Year

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As we recently noted in our coverage of the Chelan Public Utility District in Washington state, state law restricts the authority of Public Utility Districts to offer retail services over the fiber-optic networks many have built. But at least one Representative is pushing to expand PUD authority. Representative John McCoy has been working to improve rural broadband access and spurring more competition in Washington State. He brought a bill, HB 1711 that would allow PUDs to begin offering retail services as well as offer telecommunications services outside their traditional boundaries. The bill did not go far this year, likely due to the considerable influence of large carriers like Charter, Frontier, and others. But Representative McCoy plans to bring it up again next year and may have more support depending on the recommendations of a current study. The University of Washington Law School is studying options to expand broadband access in rural areas. The final report is due in December and will address the option of allowing PUDs to offer retail access. I strongly encourage people who may be interested in such developments in Washington to contact Rep McCoy or email me to find out how you can get involved. Quite frankly, we need to develop better networks to ensure citizens are aware of efforts like this bill so elected officials can be contacted in a timely manner. At the bottom of this post, we have embedded a six minute audio clip of Rep. John McCoy discussing HB 1711 and issues around access to the Internet more generally from a Progressive States Network conference call earlier this month. Digging into this bill, the summary of the bill [pdf] offers some history: Public utility districts (PUDs) are municipal corporations authorized to provide electricity, water, and sewer service.
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Public Testimony in Senate Finance Committee Against Time Warner Cable bill in North Carolina

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We have again isolated individual comments from the arguments around Time Warner Cable's bill to strip local authorities of the right to build broadband networks vastly superior to their services. On April 13, the Senate Finance Committee allowed public comment on TWC's H129 bill. Craig Settles has posted an extended story about a small business struggling to get by with the existing paucity of service in her community.

There was no hope that I could efficiently communicate, collaborate, and share online documents and applications with clients and peer professionals. I couldn’t even buy a functional phone line. For years I paid for a level of service from Centurylink that I can only describe as absolutely embarrassing.

This bill will make it vastly harder, if not impossible, for communities to build the necessary infrastructure to succeed in the digital economy. Listening to those pushing the bill, it is very clear they have no conception of the vast difference between barely broadband DSL from CenturyLink and Wilson's Greenlight community fiber network -- essentially the difference between a hang glider and a Boeing 747. And many in North Carolina don't even have access to the hang glider! Yet the Legislature cares more about protecting the monopoly of powerful companies that contribute to their campaigns than ensuring all residents and businesses have access to the fast, affordable, and reliable broadband they need to flourish.

Thanks to Voter Radio for making audio from the hearing available.  Each of the following comments is approximately 2 minutes long.

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Chelan PUD in Washington Reconsiders Broadband Stimulus Grant

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For the last 6 weeks in Chelan, Washington, the Public Utility District has had to make some hard decisions regarding expanding its rural FTTH network using a broadband stimulus award from the federal government. Chelan was an early pioneer of rural FTTH, operating a network that serves over 2/3 of a rugged county that offers great rock climbing and hiking opportunities (I checked it out personally). As we reported last year, Chelan's citizens had strongly supported accepting the stimulus award and paying for their required match by modestly increasing electrical rates (which are among the least expensive in the nation). At that time, the PUD believed its network passed over 80% of the county. But after reassessing their coverage and changing the leadership of the group in charge of the fiber-optic aspect of the utility, they found the network passed closer to 70% of the population. They also re-examined assumptions about the cost of expanding the network's reach:
The PUD’s financial review resulted in a series of revised statistics that PUD engineers presented to commissioners Monday. Of the county’s 43,000 premises — mostly homes and businesses — 30,000 have access to fiber. Some 6,000 don’t have access because they live in areas where hookups are more costly, despite their often urban settings. In these areas, the cables that supply electricity are buried directly in the ground. Fiber hookups require costly trenching and installing conduit. Another 7,000 premises don’t have access because they’re very rural. Fiber access to all but the most rural of these locations will be funded jointly by a $25 million federal stimulus grant and PUD matching funds of about $8 million.
Of the 30,000 with access, some 37% are taking a service (though they have to subscribe through independent service providers that contract with Chelan PUD due to Washington State law denying the opportunity for PUDs to offer retail services on their own network. Nonetheless, they are signing up 100 new customers per month. The problem is that some of the new connections are in high cost areas (whether due to distance or underground utilities).
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Cedar Falls Utilities Videos - Building a Community Fiber Network in Iowa

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Cedar Falls Utilities, an incredibly successful publicly owned cable network in Iowa, is upgrading to FTTH.  In these videos, they explain some basics of their system.  The final video interviews some subscribers.  

Their web site has more information, including a fact sheet and price sheet - they have decided to continue offering asymmetrical connections, unlike most of the modern community fiber networks.

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Publicly Owned Broadband Networks: Averting the Looming Broadband Monopoly

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The Institute for Local Self-Reliance is pleased to release the Community Broadband Map and report, Publicly Owned Broadband Networks: Averting the Looming Broadband Monopoly. The map plots the 54 cities, big and small, that own citywide fiber networks and another 79 own citywide cable networks. Over 3 million people have access to telecommunications networks whose objective is to maximize value to the community in which they are located rather than to distant stockholders and corporate executives.

ILSR has been tracking telecommunications developments at the local and state level, working with citizens and businesses to preserve their self-determination in the digital age.

View the Community Broadband Map
Download the Report [pdf]
Read the Press Release [pdf]

Executive Summary

Quietly, virtually unreported on, a new player has emerged in the United States telecommunications sector: publicly owned networks. Today over 54 cities, big and small, own citywide fiber networks while another 79 own citywide cable networks. Over 3 million people have access to telecommunications networks whose objective is to maximize value to the community in which they are located rather than to distant stockholders and corporate executives.

Even as we grow ever more dependent on the Internet for an expanding part of our lives, our choices for gaining access at a reasonable price, for both consumers and producers, are dwindling. Tragically, the Federal Communications Commission has all but abdicated its role in protecting open and competitive access to the Internet.

Now more than ever we need to know about the potential of public ownership. To serve that need the Institute for Local Self-Reliance has published an interactive Community Broadband Map that gives the location and basic information for existing city owned cable and fiber networks.

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