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Ramsey County and Saint Paul Under Fire for Network Plan

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If you were judging solely from the reaction of Comcast, you could be faulted for thinking Ramsey County and the city of Saint Paul were making a bold, if risky, investment to bring real broadband to local businesses and citizens in Minnesota's capital. But you would be wrong. Very wrong. The City and the County are paying a company to build them a network to serve their own needs. The City and County are smart to want their own network but this particular approach is a poor one. Let's start with a little background: Saint Paul and Ramsey presently rely on Comcast's network to transfer data files between locations and access the Internet. It is an old cable network, called the I-Net, that is failing to meet the present day needs for the City and County. Because Comcast provides the I-Net at no charge as part of the franchise, they put it up with its inadequacies. But government employees are less efficient than they could be due to this old, unreliable network. For instance, they have to wait for GIS files to crawl across the network. St Paul's telecommunications problems aren't limited to just the I-Net. Even back in 2005, St Paul recognized that the Comcast/CenturyLink duopoly wasn't getting the job done for much of anyone. We had (and still have) the same basic connections that the rest of the country had, limiting our attractiveness for new businesses that have above average needs. So the City created a Task Force that produced this terrific report in 2007 [pdf]. But the economy crumbled and the report was largely forgotten. No one, including myself, stepped up. I have lived in St Paul for 15 years and now own a home here. This has been a failure of leadership from elected officials, staff, and concerned citizens (in that order). Mayor Coleman has utterly failed to do anything but talk about the importance of broadband and the City Council has followed his lead since Lee Helgen lost his seat. A sign of this failure is an announcement that MISO is moving out of St Paul: One of its reasons for moving 90 jobs from St Paul to Eagan was better access to fiber optic connections.
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Mediacom Says it Will Not Sue Lake County, Minnesota

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In Star Tribune coverage of Mediacom's war against real broadband in rural Minnesota, we learn that Mediacom will not sue Lake County to disrupt its plan to serve thousands of unserved residents and local businesses.
And for all its accusations, Larsen says Mediacom will not sue. Spending millions of dollars on a lawsuit in a place where the company serves so few homes, he said, "is not a great business decision."
We have previously covered the many false and disproved accusations Mediacom have leveled against Lake County. The Strib article reiterates that these charges have been found to have no merit. The article also reiterates that the County has a real need that private companies have failed to meet:
The conflict that ensued is part of a national struggle. Public officials and some of their constituents argue that rural broadband is like rural electrification: It's a lifeline for small-town America that the free market will not extend. "We've been ridiculously underserved in this area for years," said Andy Fisher, who owns a Lake County bed-and-breakfast and a rural cross-country skiing lodge. The cable companies "are working in the interest of their profits. But if they're not going to serve this area, what are we going to do?"
And yet, Mediacom sees itself as the underdog!
"Lake County wants to make this into a David and Goliath story, where Mediacom is Goliath and poor little Lake County is David," said Tom Larsen, Mediacom's group vice president of legal and public affairs. "The truth is we're David because we're fighting [the government]. It's just the same story repeated all over the country."
Fascinating. Mediacom has billions in revenues whereas the County deals with budgets in the millions. Sure Mediacom is between 100 and 1000 times bigger than Lake County, it still wants to stop a project serving thousands of unserved people (that it believes is doomed to fail) because it is too disadvantaged.
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Fiber Route Construction Nearing Completion In Southwest Minnesota

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In April, we reported on Spring construction of fiber installation by the Southwest Minnesota Broadband Services (SMBS) in the Jackson area. This is a stimulus-funded expansion growing out of the community-owned WindomNet. The original plan was to have construction completed in Jackson by the end of August, but the job was 97% completed in July freeing the way for business and residential installs.

The Jackson County Pilot reported on the July Kiwanis Club meeting where SMBS's Naomi Pederson presented an update:

As of this past Monday, Pederson said 176 miles of the 181-mile main line had been built.

“People have been thrilled with the service,” Pederson said. “I’m sure businesses will be too.”

Pederson said crews will begin residential installs in Jackson July 16. She anticipates crews will be able to hook up around 100 homes per week.

“Jackson has been one of our best towns, with 73 percent sales — much more than anticipated,” she said. “People are very receptive and are signing up for more services than people in our other towns. More services and more sign-ups mean we’re trying our best to keep up.”

As of this past Monday, Pederson said 176 miles of the 181-mile main line had been built.

“People have been thrilled with the service,” Pederson said. “I’m sure businesses will be too.”

SMBS received $12.8 million in stimulus funds to develop an ftth network to Bingham Lake, Heron Lake, Jackson, Lake Okebena, Round Lake and Wilder. Check out a map of the fiber route on the SMBS website.

The high level of interest in these communities comes in the face of policymakers in Washington, DC, and many state capitals - they assume rural residents don't know how to use broadband or don't want it. This program shows that when you make good broadband available to people for a reasonable price, they take it in high numbers.

Thanks to BlandinonBroadband for alerting us to this story.

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Mediacom Continues Obstructing Rural Broadband Rollout in Lake County Minnesota

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Of all the broadband stimulus projects, the Lake County FTTH network in Minnesota has been one of the most embattled in the nation (possibly only behind AT&T's attacks on South Carolina projects). Mediacom has pulled out all the stops, including filing complaints with the Inspector General that included dubious allegations at best and then complaining after the Inspector General investigated and found nothing worth following up on. What we have here is a company that wants to block a project that will deliver essential infrastructure to thousands of people who are presently lacking access. Why? Because part of that project will overlap with an outdated and overpriced Mediacom cable network that prefers its subscribers to have no choice in providers. Recall that this is a part of the nation where a single fiber cut previously cut off all communications for 12 hours. Police could not run plates, no business could call outside the North Shore or run credit cards, ATMs were useless, 9-11 ceased functioning, and US Customs and Border Protection needed to use Canadian communications. Minnesota Public Radio ran a solid article that explained the need for real broadband up there. It starts by talking about a local business, Granite Gear, that has suffered from the lack of proper access.
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What if FiberNet Monticello Had Been Canned in 2008?

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Monticello faced a number of key decision moments throughout the history of its FiberNet. Given the recent changes in management and decision not to make up the different between debt service and revenues, some may be wondering if proceeding with FiberNet was the smart decision. It was 2008 and the economy hadn't entered its death spiral. Monticello had overwhelmingly voted by a 3:1 margin for the local government to bond for and build the network. When Monticello was beginning to sell its bonds, the incumbent telephone company (TDS) filed a lawsuit against the City, with the extremely dubious claim that Monticello did not have the authority to do what other cities in Minnesota had done. Courts later tossed it, finding that the TDS suit had no merit and making TDS reimburse Monticello for some of its costs due to the frivolous suit. But the goal was never to win the lawsuit, it was to delay and harass. Monticello had to wait a year to begin building its network. Though TDS had previously maintained that its DSL was just fine for the needs of residents and busineses, it began pulling permits to significantly upgrade its DSL to a FTTH product. (TDS has steadfastly maintained, while investing more in Monticello than any other Minnesota community, that community networks result in less investment from incumbents.) At any rate, Monticello had a decision. It faced an expensive court case and the City's action was apparently driving TDS to improve its poor network. Monticello could have backed down in the face of TDS' bullying. And if it had? From what we have seen elsewhere, this is our best guess: TDS Telecom Logo TDS could have delayed its upgrades or changed its mind entirely when the economy tanked. If it continued with upgrades, it would likely have made some token investments but not lowered its prices because the threat of actual competition was removed.
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Rural Reality: Waiting One Month for Basic Telephone Service in New House

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Yesterday, we released our first podcast - a short discussion with Linda Kramer of the Sibley-Renville Fiber project in rural Minnesota. When I happened across their Facebook page this morning, I found this perfect example of why the project is necessary (and they gave us permission to reprint it):
One of my friends moved from Fairfax to Gibbon two weeks ago. Her existing provider won't hook up service to her new home until June 29. This means nearly four weeks without basic telephone service for her family (and no phone at all while her husband has his work cell phone with him during business hours). Once she gets the service hooked up, she needs to address a billing problem, as the amount she's being billed by this company is not the same as what she was promised when she signed the contract. Excellent local customer service is one of the things many people are looking forward to with RS Fiber. Is this important to you?
Most of us in urban areas really hate our cable providers because of the poor service they provide. But at least they are relatively timely in the terrible service they offer -- unlike in rural areas where telco technicians may be responsible for covering many hundreds of square miles. Hesitant though I am to promote anything Facebook-related, the people in Sibley have done a tremendous job of using Facebook to organize people and share stories about why their community-owned network is so important. If you are trying to organize a community for better broadband, take some notes.
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First Community Broadband Bits Podcast - Sibley County Fiber to the Farm

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In our excitement to produce this podcast, we forgot to credit Fit and the Conniptions for the intro/outro music. Much thanks for releasing their music under a creative commons license that allows us to use it for this purpose. If you like their sound, buy an album! We have decided to start a podcast- a recurring audio program that you can listen to on your smartphone, iPod, computer, this web page, etc. We are calling it Community Broadband Bits and our plan is to offer short (10-15 minute) interviews with people doing interesting things to encourage community broadband networks. As this is our first attempt at such a show, we hope you will send feedback and suggestions. Eventually, we will get on a schedule, likely releasing every other week for the first few months. To subscribe with iTunes, click here. You can download this Mp3 file directly from here. Read the transcript of this episode here. Find more episodes in our podcast index. If you simply want the audio feed for the show, it is http://feeds.feedburner.com/BroadbandBits For our first show, we interviewed Linda Kramer with the Marketing Committee of the Sibley-Renville Fiber Project in rural Minnesota's Sibley County. In this ten minute interview, we discuss the need and demand for broadband in rural areas, as well as how the marketing committee has educated residents and demonstrated support for a County-owned fiber network.

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Gigabit Squared, Monticello, and Next Generation Networks

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For those waking up from a two week nap, the publicly owned FiberNet Monticello recently saw the private provider managing it step down, the City tell Bondholders that it would not make up the difference between revenues and debt payments, and us examining what the network has achieved. On Monday, the Monticello City Council joined forces with Gigabit Squared a new organization with several experienced network operators on board that previously made news by noting it had $200 million to help build next-generation networks and would likely be working closely with Gig.U. In a few months, they will take over managing FiberNet Monticello from HBC for a short period of time and may then continue with a longer contract. One of the benefits of the public owning a network is that when the business plan does not work out as expected, the public still has a strong voice in what happens next. Monticello could have decided to give up on it, but we are glad to see it chose instead to try a new approach. If a private company had owned the network, it alone would have decided how to proceed and its competitors would undoubtedly pay a pretty penny to see it disappear. Given the anti-competitive actions by incumbents (engaging in predatory pricing and frivolous lawsuits), FiberNet Monticello has to work harder to increase its revenues. Put simply, they have two choices. 1) Expand. 2) Innovate with new, next-generation services. From what we could tell, HBC was not particularly interested in either option in Monticello. HBC is a very accomplished triple play company (telephone, Internet access, and television) and does not appear focused on innovating new services. In fact, we have heard one of their likely future public partners saying that they would do triple play and nothing else for years.
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A Closer Look at FiberNet Monticello

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Monticello has been all over the muni broadband news lately, in the wake of a letter it sent to bondholders [pdf] alerting them that the City would no longer make up the difference between the revenues produced by the system and the debt payments. This came shortly after the company managing the network decided to step down. Over the next year, the reserve fund will make up the difference while the City and bondholders come to some sort of an agreement. The Star Tribune today published a good synopsis of the situation:
City administrator Jeff O'Neill said that the city has no intention of abandoning FiberNet's 1,700 customers, including about 130 businesses. "This system isn't going anywhere," he said. "We're not going out of business." Despite the problems, he said the city has one of the fastest Internet systems in the country that has driven down prices and improved services by providing competition.
The article also notes that prior to the City-owned network, the telephone company (TDS) provided very poor DSL service that was harming area businesses with slow and very unreliabile phone and broadband services. Without FiberNet Monticello, we don't know how many businesses would have been forced to relocate to be competitive in the digital economy. We decided to dig a little deeper to get a sense of what Monticello has received for its investment and difficulty. We previously examined the prices charged by Charter cable in town and found that households taking that deal were saving $1000/year. monticello-goodbadugly_0.jpg We also noted that Charter was almost certainly engaging in predatory pricing. After talking with other networks, we would guess that Charter is losing between $30 and $50 (conservatively) per subscriber per month.
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State by State Campaign to Gut Consumer Telecom Protections

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In most states, telephone companies are required to serve everyone and when there are problems with the service, the state can mandate that the company fix them. But AT&T and ALEC are leading the charge to let these massive companies decide for themselves who should have access to a telephone, taking state regulators out of the loop. These big companies use several arguments we are well familiar with - that mobile wireless is already available (in many rural areas, it actually is not available) and there is plenty of competition. If only that were the case. I was thrilled to see David Cay Johnston cover this in a column on Reuters:
AT&T and Verizon, the dominant telephone companies, want to end their 99-year-old universal service obligation known as "provider of last resort." They say universal landline service is a costly and unfair anachronism that is no longer justified because of a competitive market for voice services. The new rules AT&T and Verizon drafted would enhance profits by letting them serve only the customers they want. Their focus, and that of smaller phone companies that have the same universal service obligation, is on well-populated areas where people can afford profitable packages that combine telephone, Internet and cable television.
What happens when the states hand over authority to these companies? David has an answer:
AT&T and Verizon also want to end state authority to resolve customer complaints, saying the market will punish bad behavior. Tell that to Stefanie Brand. Brand is New Jersey's ratepayer advocate whose experience trying to get another kind of service - FiOS - demonstrates what happens when market forces are left to punish behavior, she said. Residents of her apartment building wanted to get wired for the fiber optic service (FiOS) in 2008. Residents said, "We want to see your plans before you start drilling holes, and Verizon said, 'We will drill where we want or else, so we're walking,' and they did," Brand told me. Verizon confirmed that because of the disagreement Brand's building is not wired. And there's nothing Brand can do about it. Verizon reminded me the state Board of Public Utilities no longer has authority to resolve complaints over FiOS.
Better broadband is not just about technology.
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