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Monticello FiberNet Attempts to Adapt Business Plan

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Monticello, a small community of 13,000 about 40 miles northwest of Minneapolis, built one of the most advanced broadband networks in the midwest and delivers some of the fastest connections available in the state at incredibly competitive rates. The Twin Cities metro area, stuck mostly with Comcast and Qwest, cannot compare in capacity or value. Monticello is fairly rare in the publicly owned FTTH region because it does not have a public power utility and services on the network are provided by a third party, Hiawatha Broadband Communications -- a Minnesota company with an excellent reputation and track record. Unfortunately, Monticello's network suffered costly delays due to a frivolous lawsuit filed by the incumbent phone company in a bid to bleed the publicly owned network while it suddenly invested in its own second generation network (that it previously maintained was totally unnecessary for a small town like Monticello). Monticello lost a full year on the project, which has hurt its finances significantly. More unexpectedly, it has become the only community in North America where all residents have a choice between FTTH networks. They also have Charter in the mix. Add to this the economic downturn that hit just after they financed the network in 2007 -- the population growth has been much lower than forecast. The predictable result? Much lower prices, lots of community savings, and a publicly owned network that is behind its projections. The local paper recently ran a story about the project, "FiberNet struggles in a sea of red. Should you read the full piece, please be aware that the inaptly named "Freedom Foundation" has no credibility, existing solely to defend massive corporations like cable and telephone companies. For those who wonder why incumbents filed absurd lawsuits that have a vanishingly small chance of winning, note this discussion from the story:
“It stopped us from really building the system by about a year,” said Finance Director Tom Kelly, “which put our revenue collections about a year behind.
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Longmont Astroturf Opposition Gone in Puff of Smoke

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Any hint that the Comcast-funded effort in Longmont to oppose authorizing the City to provide broadband services was anything but an astroturf campaign of lies has evaporated in the wake of its overwhelming defeat. If there had been a shred of local legitimacy among the "Look Before We Leap" group that was run by Denver-based strategists, it probably would have kept its website up for longer than a few days after the election. If I were them, I would want to keep a record for the future. But they don't. Because they were just a bunch of paid public relations people working a job. They didn't oppose Longmont's initiative, they didn't know anything about it. They were collecting a paycheck. And this is what they left behind: Look Before We Leap, disappeared The Times-Call has a hopeful reflection about the broadband battle (somewhat classier than the hilarious Neener Neener Neener poke at Comcast).
This time, lobbyists for the telecommunications industry spent even more than they did last time -- about $300,000 -- in trying to convince residents that the city having control over its own property was somehow "risky." Obviously, the lobbyists, including the euphemistically monikered Americans for Prosperity, were only concerned about the welfare of Longmont residents and the health of the local economy. They spent so much money to show just how concerned they were. But the majority of the voters weren't buying what they were selling. People had the audacity to think for themselves and make up their own minds. Personally, I would thank the anti-2A folks for pouring so much money into the local economy, except most of its spending was elsewhere. They did pop for a few ads in this newspaper, though, so for that they have my gratitude.
The author, Tony Kindelspire, goes on to note just how amazing it was to see everyone unified on an issue.
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Border to Border Broadband in Minnesota

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Minnesota's Governor Dayton has already done more for expanding broadband access in Minnesota than predecessor Pawlenty who took the "stay quiet and hope for the best" approach to expanding access in our state. After being prodded by the legislature (including now-Lieutenant Governor Prettner-Solon) Governor Pawlenty appointed an industry-heavy "Ultra High Speed" Broadband Task Force that exceeded the expectations of many, including myself, with its report [pdf]. I give a lot of credit to a few members, especially "Mikey" and Chairman Rick King of Thomsen Reuters, for that report given the constraints of the environment in which it existed. Minnesota's Legislature and Governor Pawlenty then created some goals for 2015 and generally ceased any work on ensuring Minnesota could meet the goals. However, some departments (like the Department of Commerce) are using that language to prod broadband providers to consider what steps they can take to get us closer. Despite my frustration, I want to recognize those who are doing all they can to expand access to this essential infrastructure. Fast forward to this week, when Governor Dayton announced a new Task Force that is supposed to really do things (as opposed to the more common Task Force approach of creating the appearance of doing things). I am heartened by many of the appointees. There are some terrific people, especially some terrific women who are too often under-represented in technology) that will work very hard to bring real broadband to the Minnesotans that either need their first option or a better option. And they have their work cut out for them. The state has few options to compel investment from a private sector that sees little reason to invest in an industry with so little competition (St Paul has one high-speed provider: Comcast, and one slower, cheaper alternative - CenturyLink). For instance, rural Kanabec County took the Ultra High Speed Task Force's recommendation and asked its incumbent to partner in providing better broadband.
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Small Minnesota Town Sees Savings on County Network

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Albert Lea, a town of 18,000 in southern Minnesota, transitioned from getting its Internet access from a private ISP to its County, Freeborn.  This is part of a larger IT collaboration between the local governments.

Previously, the community was paying $95/month for a 3Mbps DSL connection from a local private company (the options from the telephone and cable incumbents were even more expensive, offering less value).  Now Freeborn County is providing a connection of at least 25Mbps for $150/month -- however the connection regularly offers connections over 50Mbps.  

There is an upfront cost of $9,000 to make this switch, which pays off in less than 2 years (local governments often fail to make smart investments that have longer break-even windows because of how they budget for capital vs. ongoing costs).  After it breaks even, Albert Lea says it will save $6,000 a year.

Local governments will need broadband connections as long as they exist, meaning that leasing connections from a private party is often fiscally irresponsible.  Better to own it or work with another community provider that prices its service closer to the cost of actual provisioning rather than marking it up to reflect a scarce market.  

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AT&T Takes Its Astroturf Show on the Road, Midwest Edition

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As AT&T tries to buy out its competition via the T-Mobile merger, it has sent out its allies and minions to push the company line in communities around the country. Here are two events in Minnesota and Wisconsin you should be aware of. On Monday, October 3rd, the Humphrey School of Public Affairs at the University of Minnesota is going to host a debate between Amalia Deloney (MAG-Net Coordinator and friend of MuniNetworks.org) and Former Congressman Rick Boucher on the subject of AT&T's attempt to buy T-Mobile (which just happens to be the low cost provider in the wireless space). A few short years ago, one would have expected Rick Boucher to champion opposition to this anti-competitive merger, but alas, the good citizens of his district rewarded his many years of hard work in Congress by voting for his opponent in the last election. As one often expects to see in DC, Rick took a new job and now works for a law firm with AT&T as a client. Suddenly Rick Boucher is the Honorary Chairman of the "Internet Innovation Alliance," a group that has a name that sounds like he should head it. But the IIA is little more than a puppet for AT&T and like interests. They use it as part of their astroturf campaigns to further AT&T's agenda -- ensuring that most Americans are stuck using a network designed for AT&T's interests rather than the public interest. We wish Amalia the best in the debate. This is a far better program than the last time AT&T came to the U's Public Policy school, which featured a blatantly one-sided program attacking inter-carrier compensation rules that have been essential for supporting rural network investment. If you want to attend, you should RSVP to the Center for Science and Technology Public Policy. It will be at 2:00 in the Wilkins Room.
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PUC Gives Lake Communications Authority to Offer Broadband on Minnesota North Shore

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When last we looked in on the Lake County FTTH project connecting rural areas north of Lake Superior, the County had just ditched its original management team and Mediacom started trying to derail the project. The County went on to hire "Lake Communications," a two man firm created for this project, while Mediacom presumably returned to quietly scheming against the introduction of any competition on their turf. Lake Communications has received authority by the Minnesota Public Utilities Commission to provide broadband in their target territory.
Kevin O’Grady, a staffer for the Public Utilities Commission, called Thursday’s 5-0 vote “uneventful.” He said that aside from a protest from the Minnesota Cable Communications Association that was withdrawn just before the vote, the application was “nothing out of the ordinary.” The cable association, which faces competition from the fiber project, had complained that the county, without a public vote, couldn’t be the legal authority to provide telecommunications services under Minnesota law. The commission, responding to the complaint, said the authority would be granted to Lake Communications, which it deemed had a proper relationship with the county in providing the service. … The county plans to build the network and lease the lines to Lake Communications for revenue. In its original response to the cable association’s complaint, the state commission said Lake Communications’ application “complies with the requirements typically applied by the commission to applications” across the state. It also stated that Lake Communications’ financial statements were “sufficient and consistent with the financial information filed by other applicants for authority.”
Remember that Minnesota law requires a supermajority vote of 65% before cities and counties provide telephone service. In this case, Lake Communications will be offering the services on infrastructure owned by the County. If there is any sliver of a doubt about the legality of this arrangement, we can expect Mediacom or the Minnesota Cable Communications Association to file suit.
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Redwood County, Minnesota, Latest to Study FTTH

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Minnesota, land of 10,000 lakes, may soon also be the land of Countywide rural FTTH. Yet another County is doing a feasibility study to figure out how it can bring fast, affordable, and reliable broadband access to all of its citizens.
Redwood County’s Economic Development Authority (EDA) opted to move forward with a broadband feasibility study that would determine just what the county would need to do in order to get fiber to every premises. … The study, which is being conducted by the Blandin Foundation through what is known as the Robust Broad-band Networks Feasibility Grant Program. The grant, which includes up to $40,000 for the county as it addresses the needs of every community and farm site from one end of the county to the other, requires matching funds, which are available through the county EDA.
Redwood County Redwood County is in an interesting area, just north of the Windom area muni FTTH networks and west of the proposed project in Sibley and Renville counties. This study comes not long after Todd County started a feasibility study as well (the the latest on that). And though we haven't discussed it much on MuniNetworks.org, Lac qui Parle County to the northwest is working with a rural telephone cooperative to bring FTTH to many in their border as well. And then beyond them, we have Cook County going FTTH with their electric coop and Lake County going its own way, both with the assistance of the broadband stimulus awards. Minnesota could very well become the state with the most impressive rural connections. Unfortunately, thus far we have seen no assistance from the state in this matter, but perhaps the Dayton Administration will chart a new course.
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TonkaConnect Initiative Shelved, More Education Needed

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The TonkaConnect project of the Lake Minnetonka Cable Commission, comprising many suburbs west of Minneapolis, is going to pause after some of the city councilmembers of communities within the project were unsupportive.
“I think [the LMCC executive committee] realized that if a municipal fiber network is ever going to be built, the cities need a considerable amount of time spent in educating and understanding the significance of building such a system,” said a memo from Sally Koenecke, LMCC executive director. The $81 million proposal sought to provide 25,000 households in communities from the 17 member cities with Internet, phone and cable fiber optic services.
I have occasionally offered technical advice to this ambitious project and have watched as Mediacom and other incumbent providers spread rumors and lies to disrupt it. These companies will stop at nothing to preserve the limited competition they rely upon to maintain their market power.
“I’m personally against spending any money on the fiber optic project,” said Orono mayor Lili McMillan. “What I want to do is send a message. I don’t feel government should be in this.”
To be clear, if Lili McMillan doesn't want the government to build a next-generation network, they will have to continue relying on Mediacom cable and slow, unreliable DSL services. Their choice. Their incumbents do not have the capacity or interest to build a next-generation network themselves but they do have the capacity and interest to prevent any other party from doing so. As Ann Treacy notes at Blandin on Broadband, this is not necessarily the end of the line and may actually serve to increase the desire of people in those communities to take action:
Unfortunately I think that having interest if the price is low enough might not be enough to motivate a community through the perils of community supported fiber. But I always remember the folks in Monticello saying that each set back in winning over the residents just made them stronger in the end.
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The Proper Role of Government in Broadband

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I was just reminded of an excellent presentation given by Andrea Casselton back on October 17, 2007, after the Saint Paul Broadband Advisory Committee developed this report. Unfortunately, the city of Saint Paul has not followed through on the fine recommendations of the Committee. As in so many other places, the economic downturn has made public investments more difficult. But not impossible. Good afternoon, I am Andrea Casselton, the Director of the Office of Technology and Communications for the City of Saint Paul. Thank you for holding this important hearing. On behalf of the City of Saint Paul, I would like to present some thoughts on the role of government in broadband policy. As part of my role for the City I acted as chair for the Saint Paul Broadband Advisory Committee which met from August 2006 to July 2007. The committee was comprised of 20 representatives from the community, government, a labor union, non-profits, education, and business associations. Some of the representatives on the BAC were also experts in the field of broadband and wireless technology. Several weeks ago the Committee’s recommendations report was published. My comments borrow heavily from that report. In my opinion, in order to decide whether there is a role for local and state government in the deployment of broadband in the state of Minnesota, we must first decide if we consider broadband to be infrastructure. The American Heritage Dictionary defines infrastructure as: “The basic facilities, services, and installations needed for the functioning of a community or society, such as transportation and communications systems, water and power lines, and public institutions including schools, post offices, and prisons.” For cities, towns and counties to successfully compete in the global economy they must be connected to the world. From harbors to railroads, from highways to airports, infrastructure has historically enabled the exchange of commerce, information, and people.
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Rural Todd County Embarks on Fiberband Feasibility in Minnesota

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Todd County, a rural community "where the forest meets the prairie" along I-94 in the geographic center of Minnesota, is the latest of many counties to examine local solutions to their lack of affordable, fast, reliable, and certainly universal access to the Internet. This could be a blueprint for how to initiate a process to improve broadband in a rural community. Todd County is quite rural, with about 10,000 households and businesses that could be wired for service. From what I have learned, this initiative originated with a group of beef farmers who are tired of being left behind on the rural world wide wait.
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