Memphis Mayor Jim Strickland has introduced an ambitious new plan to incentivize private telecom providers to deliver affordable fiber to 85 percent of the Tennessee city of 633,000. The project, part of the city’s Memphis 3.0 master plan, will spend more than $700 million to expand broadband in a city where less than a quarter of residents–most of them wealthy–have access to next-generation fiber.

On September 23, city leaders introduced a new city ordinance amendment establishing new, streamlined permitting and fee requirements. Their goal: to incentivize companies willing to expand fiber optic broadband to at least 60 percent of Memphis’ residential and business premises and 60 percent of all existing low-income premises.

Not long after, city leaders unveiled more details about their "Smart Memphis Fiber" effort. After issuing an RFP last year, Memphis officials say they’ve struck a partnership with Paris-based Meridiam and Blue Suede Network to build a $700 million fiber optic network with an eye on eventually reaching 85 percent of the total Memphis population.

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“City Government will incentivize any interested company by reducing our costs through reductions in permitting fees and right-of-way fees,” Strickland said in a recent presentation before the city council. “Additionally, we will streamline our process to allow a company to get to work faster. We are also putting our own skin in the game.”

In the city of Fullerton, California (pop. 140,000), privately owned infrastructure builder and operator SiFi Networks has turned on the first section of what will be a city-wide, open access Fiber-to-the-Home network. The project makes Fullerton SiFi’s first FiberCity — a privately built, financed, and operated open access network it plans to duplicate in more cities across the country in the future. When complete next fall, the Fullerton FiberCity network will pass every home and business in the city, with the company's subsidiary, SiFi Networks Operations, selling wholesaling capacity to as many Internet Service Providers (ISPs) as want to enter the market. 

A Different Approach

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SiFi’s FiberCity model remains somewhat unique in the United States, and is much more common in Europe and Asia. CEO Ben Bawtree-Johnson attributes their success to cracking the economic code for private investment in open access information infrastructure, which has seen more attention in recent years as investors and fund managers have seen opportunities. “[O]ur vision really is to create as many last-mile fiber optic networks as we can across the USA in a long term sustainable fashion,” Bawtree-Jobson remarked on an episode of the podcast last fall. “[W]e're all about long term, dry, low yielding, risk mitigated investments, so everything we do is based around 30-year plus type investments.”

On January 30th, the House Energy and Commerce Communications and Technology Subcommittee held a hearing to learn from experts about how to shrink the digital divide and expand Internet access. The committee invited Joanne Hovis, owner of CTC Technology and Energy, to testify.

Make Investment Attractive

Hovis also heads up the Coalition for Local Internet Choice (CLIC) as CEO. She shared a plan that focused on creating an environment that will encourage infrastructure investment by the private and public sectors. The CLIC website shared the six main components of the plan:

Support public-private partnerships that ease the economic challenges of constructing rural and urban infrastructure;

Incent local efforts to build infrastructure — ones that private service providers can use — by making bonding and other financing strategies more feasible;

Target meaningful infrastructure capital support to rural and urban broadband deserts, not only to attract private capital but also to stimulate private efforts to gain or retain competitive advantage;

Empower local governments to pursue broadband solutions of all types, including use of public assets to attract and shape private investment patterns, so as to leverage taxpayer-funded property and create competitive dynamics that attract incumbent investment;

Require all entities that benefit from public subsidy to make enforceable commitments to build in areas that are historically unserved or underserved; and

Maximize the benefits of competition by requiring that all federal subsidy programs are offered on a competitive and neutral basis for bid by any qualified entity.

Hovis began her testimony by assessing our current approaches to shrinking the digital divide. She examined current belief in D.C. that local processes such as permitting and access hold up infrastructure investment and frankly told them that such a belief is incorrect.

From Hovis’s written testimony:

Earlier this legislative session, we followed legislation in Virginia, which would have negatively impacted municipalities’ ability to use their publicly owned infrastructure to improve connectivity. We’re now watching a bill in Missouri that’s been resurrected from legislation that died last year. Another state bill just appeared on our radar in Georgia that interferes with local community authority by prescribing stringent rules on permitting and applications.

The Wrong Direction

When our Christopher saw it, he said: 

This is based on the false notion that cities are the barrier to better networks rather than recognizing the power of pole owners and existing attachers as a far more significant barrier.

The bill, HB 336 or the Broadband Strategy for All of Georgia Act, allows communities to be certified as “broadband ready,” which may allow providers that serve those communities eligible for state tax incentives. In order for a community to be certified as a “broadband ready community,” it must comply with a specific model ordinance, created by the state that dictates the process for reviewing applications for broadband projects.

The bill starts out all wrong, by defining broadband as 10 Megabits per second (Mbps) download by 1 Mbps upload. Clearly that indicates that its point of origin is the incumbent telephone companies who want to make it easier to provide their slow DSL, rather than encourage upgrades to the FCC definition of “broadband.” As a reminder, the federal government considers broadband to be 25 Mbps / 3 Mbps.

The process proposed in HB 336 assumes that local communities that are trying to protect their public spaces are the bad guys and any DSL or cable company who wants to insert their lines or equipment in public space is but a poor victim. The bill applies to any “public rights of way, infrastructure and poles, river and bridge crossings, or any other physical assets owned or controlled by the political subdivision.”

The Heavy Hand Of The State

Duffy Newman: The reason the carriers are using this type of technology is because they're trying to improve coverage but they're also looking at capacity.

Lisa Gonzalez: This is episode 239 of the Community Broadband Bits Podcast from the Institute for Local Self-Reliance. I'm Lisa Gonzalez. Last week, we talked to Lincoln, Nebraska, a community using its fiber and conduit resources to improve wireless service in the city, using small cell technology. In this episode, Christopher gets the perspective of an infrastructure company that works on small cell deployment with wireless carriers. Duffy Newman is the acquisitions manager and corporate development in strategy for Crown Castle. Chris and Duffy touch on the function of Crown Castle and Duffy offers more detail on how small cells work and the difference between the new small cell technology and the traditional mobile wireless systems.

Christopher Mitchell: Hey folks, this is Chris Mitchell, the most of Community Broadband Bits. I just wanted to ask you if you could do us a real big favor to help us spread this show around. That's to jump on iTunes or Stitcher, wherever you found this show, and to give us a rating. Give us a little review, particularly if you like it. If you don't like it so much, then maybe don't do that, but if you're enjoying the show, please give us a rating and help us to build the audience a bit. Thanks.

Lisa Gonzalez: Now, here's Christopher talking with Duffy Newman, acquisitions manager and corporate development and strategy for Crown Castle.

Christopher Mitchell: Welcome to another edition of the Community Broadband Bits Podcast. I'm Chris Mitchell at the Institute for Local Self-Reliance. Today, I'm speaking with Duffy Newman, the acquisitions manager and corporate development and strategy at Crown Castle. Welcome to the show, Duffy.

Duffy Newman: Thanks, Chris.

After our article earlier this month on US Internet’s problems obtaining permission to install conduit under Minneapolis Park Board boulevard property, several other articles appeared in local media.

TV station KARE 11 ran a piece on the issue and interviewed Julie Stenberg, who observed, "Technically it's park land, but people are not playing Frisbee, they're not picnicking here.” (Watch the video below.)

The Star Tribune also ran an article noting that people like Julie, who live adjacent to park owned boulevards, may never have the opportunity to take Fiber-to-the-Home (FTTH) service from the local provider.  If US Internet wants to obtain a permit to bury conduit along the parkway in order to get to Julie's house - the only option available - they will have to shell out $27,000 in fees. People around the corner from Julie are already getting FTTH service from US Internet.

Permit Denied

According to the Strib, Commissioners denied a permit for boulevard placement and for placement under Minnehaha Creek in South Minneapolis because it lacked the detail they required. The Park Bard is concerned about damage to trees during both conduit placement and any maintenance:

“We’d directional drill, and we’d be 12 to 14 feet under the creek bed,” [US Internet’s Vice President Travis] Carter said. “You will not see anything when we’re done. It’s just a pipe deep underground that nobody will see.”

US Internet has no access to Comcast and CenturyLink poles, so an underground network is its only option. Alleys are too tight to safely use the boring and maintenance equipment, especially in the winter, but the Park Board is not convinced, “It’s really important for USI to demonstrate that there’s no alternative,” [Assistant Park Superintendent Michael Schroeder] said.

Caught Behind A Boulevard And A Creek