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A Few Loose Ends...
Answers for Questions in Sibley's Fiber-to-the-Farm Potential Network
- Regarding parity of costs to build the fiber network into the townships (rural area) compared to cities. It’s nearly twice as expensive to build out the rural areas and some cities feel they are subsidizing cost of putting fiber in country.
- How was the initial money spent for the feasibility study? No one has seen the breakdown as to what that money went for. We would like to see an itemized list of how the county's contribution and the Blandin dollars were spent. How much of that money is left?
- There are concerns about how the budget of $150,000 was arrived at for the next phase. Who established the budget and how was it decided how much money to spend for the different categories? We haven't seen any details of this either, only general categories.
- Who is making the decisions on how money is spent and for what?
- Some people feel decisions are being made without elected officials - boards or council members - being part of the decision making process.
Response from Mark Erickson: Parity of costs between City/County Last summer when the county requested the rural area be included in the feasibility study, the issue of parity came up because of the higher cost of construction in the rural area. The topic was discussed at all of the public meetings and the following are the reasons for blending the construction costs:
- This is a one time 100-year investment in the entire county (and Fairfax and Renville County) and since the city folks rely on the rural folks and visa versa it is viewed as an opportunity for everyone to invest in one another. The fiber network will benefit city and rural businesses, schools, city and county government, townships, ag producers, senior citizens, etc.
Lake County, National Public Broadband, Go Separate Ways
Lake County could not reach agreement on a permanent contract with National Public Broadband, its consultant firm for nearly two years. The two sides battled for nearly two months and couldn’t solve issues based on bonus payments and the ability for the county to fire NPB without cause and without penalty. The negotiations had bogged down work on the actual project, Commissioner Paul Bergman said, and the board wanted a fresh start.Additionally, due to the state of financial markets, the County is planning to self-fund the $3.5 million local obligation required to access to the broadband stimulus award. Lake County hoped to bond for the matching funds but the current interest rates make that an fiscally unwise approach. While this does not change the project, it will change the perception of the project and open it to increased attacks from those who don't want the County to build a network (despite the fact that private providers have no interest in providing anything other than slow DSL and cable networks). The County had long maintained that no public money would be used. However, most people will likely not care as long as the project keeps its promise to deliver fast, reliable, and affordable broadband to the community.
Upcoming Minnesota Events
As Minnesota's rural county-wide FTTH projects move forward, we have the opportunity to learn more about them in upcoming events. Thanks to Blandin's broadband blog for covering these issues!
On February 10, Cook County is welcoming Dan Olsen from WindomNet to discuss their experiences with a community-owned fiber network. You can listen to a previous interview on the North Shore with Dan Olsen. In the interview, Dan Olsen mentions that a number of residents use WindomNet to work remotely, commuting only once a week to their jobs in South Dakota.
For the rest of us, mostly located in the metro area of Minneapolis and Saint Paul, we can learn about the projects in Cook, Lake, and Sibley Counties at a Telecommuniations and Information Society Policy Forum at the HHH School of Public Affairs at the University of Minnesota.
Mediacom Falsely Accuses Lake County Communities of False Statements
In a situation similar to the Frontier letters to Sibley we published last week, the cable company Mediacom has sent letters to Silver Bay and Two Harbors in Lake County to scare them into abandoning the rural county-wide FTTH network that they are building with federal broadband stimulus aid.
Interestingly, rather than sticking to the normal fear, uncertainty, and doubt (FUD) campaign, Mediacom apparently based its threats on a draft previous version of the joint powers ordinance rather than the language actually passed by the resolutionsincluded in the current JPA. Whoops. [See Update below]
Mediacom, perhaps you should focus on improving your networks rather than stifling potential competition. Please send us copies of letters your community network has received from incumbent providers.
Without further ado, here is the letter [download pdf] sent to Silver Bay and Two Harbors on December 21, 2010 by Tom Larsen, VP of Legal and Public Affairs for Mediacom:
Re: Joint Powers Agreement with Lake
County Dear Mayor Johnson:
Mediacom prides itself in being one of America's leading providers of telecommunications services to small and medium sized communities. As you may be aware, Mediacom offers a highly competitive suite of high-speed Internet, cable television and phone services to homes and businesses throughout Silver Bay (the "City").
It has come to our attention that the City passed a resolution on November 15, 2010 approving a Joint Powers Agreement with Lake County (the "JPA"). Given the significant private capital that Mediacom has invested in order to make advanced telecommunications services available throughout the City, we were extremely surprised to learn that your resolution approving the the JPA includes the following finding in Section 4(e):
Frontier Forces FUD on Cities in Sibley: Sibley Responds
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.
Sibley County Discusses Joint Powers Agreement for Rural Fiber-to-the-Farm
More than 50 elected officials -- county commissioners, city council members, township board supervisors -- gathered in the Arlington Community Center last night to inch ahead a plan to lay fiber optic lines to every home and business in the county plus those in and around neighboring Fairfax in Renville County. It's an ambitious plan that would require the community to borrow $63 million and then pay off those bonds with revenue from the service. The county-owned operation would offer the usual cable-phone-Internet triple plays, and backers are promising that right out of the gate it would be at a speed of 20 megabits per second, upload and download. That's quite a bit faster than what area residents get now via DSL or cable or wireless.If the project will move forward, the communities will have to form a Joint Powers Board and seed it with some start-up funds. The next steps will be to do a pre-subscription campaign to get a real sense of how many residents would take service from a new network. Responses are non-binding but will give a better measure of support as well as create an additional sense of responsibility for the project. From Dave Peters:
By the end of February, the 10 governments -- Sibley and Renville counties and the cities of Gaylord, Arlington, Winthrop, Fairfax, Henderson, Gibbon, Green Isle and New Auburn -- will each decide whether they want to create a joint powers board.The best scenario is that all communities would join. But if one or a few do not, the project may be able to continue as long as some of the remaining communities are willing to take additional risk (which would be rewarded with a higher percentage of net income down the line). As long as the JPA is able to continue, all communities will still be passed by the network and residents able to subscribe. The exception is Sibley County itself; if the County does not join, the project would be hard-pressed to run the fiber out to the farmers and residents outside town limits.
Update from Lake County Fiber Project (Minnesota)
Like the debate over whether the meetings being held to draw up the rollout plans for the county should be public or private, NPB needs to better apply the rules of working within the expectations of open government. We demand transparency and a full accounting of tax dollars. It’s fair to wonder, as some board members did last week, just what NPB would withhold from the board if things don’t go swimmingly with the Lake County plan.
To communities that seize broadband initiative, benefits flow fast
On November 29, 2010, MPR published our commentary about community broadband. The Twin Cities has slower and more expensive broadband Internet than the nearby town of Monticello. The Twin Cities metro area has a population of 2.8 million and the highest density of people and businesses in the state. So why is our broadband Internet slower and more expensive than that enjoyed by Monticello, population 12,000? Several years ago, the city of Monticello (45 miles northwest of Minneapolis) recognized the increasing importance of reliable, high speed, low cost broadband. After the incumbent telephone and cable companies declined to build the network city leaders had in mind, the community decided to build one itself. Now, FiberNet Monticello offers some of the best broadband packages available in the country, while the Twin Cities is lagging. A new analysis by the Institute for Local Self-Reliance compares the available broadband speeds in Monticello to those available in the Twin Cities metro. In the metro, as in most of the United States, broadband subscribers choose between DSL from the incumbent telephone company (Qwest) and cable broadband from the incumbent cable company (Comcast). Monticello's offerings are faster at every price point, but Comcast appears to offer comparable downstream speeds in the highest tier of service. This apparent equivalence, however, is like comparing dirt roads with interstates. Both are roads that allow you to travel from point A to B, but they have fundamentally different characteristics in carrying capacity and reliability. For a variety of reasons, DSL and cable almost always fall short (and often, well short) of the advertised "up to" speeds, whereas full fiber networks regularly achieve the speeds they promise. In the metro, cable offers most residents the fastest option for broadband, but only one choice of provider. The Monticello network not only created a new choice for its residents, it induced the incumbent telephone company to greatly upgrade its network to remain competitive. Now, Monticello residents can choose between two extremely fast broadband providers, as well as a cable internet connection. The community-owned network may have only been the third broadband option, but it fundamentally changed the market.
Monticello Shows Rural Does Not Have to Lag Urban Broadband
The quick answer is that it appears as if generally rural access is more expensive – but that doesn’t need to be the case – as demonstrated by Monticello. Communities who are interested in pursuing municipally-directed network might make talking to Monticello one of their first steps. Monticello has been very generous with information on their strategy and deployment.