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Lexingtonians Consider Municipal Network Options in Kentucky

Community leaders in Lexington are the latest to stand at a fork in the broadband road. In September, the franchise agreement between the Lexington-Fayette Urban County Government (LFUCG) and Time Warner Cable expired, resulting in a month-to-month agreement continuation. As they negotiate a new contract, local citizens have called for consideration of a municipal network.

When the contract was originally negotiated in the 1990s, the community was primarily interested in cable TV servce. As broadband has become critical infrastructure for residents, businesses, and government, the community's focus shifted. Lexington customers have complained repeatedly about Internet and cable TV service from Time Warner Cable. A February Kentucky.com article noted that local consumers complained over 300 times to Lexington's Urban County Government, the entity responsible for contract negotiations. According to the article:

The biggest single category of complaints was about price and the volatility of monthly rates. Other complaints were that the cable TV service "repeatedly fails, resets or freezes"; that there was an extended wait time and/or "unhelpful responses" in customer service; and that email and Internet "had declined in service" and showed "significantly slower service."

The City Council considered the situation bad enough to debate whether or not to appoint an ombudsman to advocate for Lexington consumers.

The community wonders how the proposed merger between Time Warner Cable and Comcast will impact their current service. While the Vice Mayor seems to think it is an "almost golden opportunity" to deal with a different provider, local citizen Roy M. Cornett has a different perspective. He wrote for Business Lexington.com:

High Speed in the Blue Grass State: Russellville's Gig

The Logan Journal recently reported that the Russellville Electric Plant Board (EPB) now offers gigabit service to local businesses. The article notes that Net Index, an online tool to measure download and upload speeds, recognizes EPB as the first Gig city in Kentucky. To learn more about the community and its network, we talked with Robert White, General Manager of EPB.

The community of 7,000 is the county seat of south central's Logan County. Russellville is located in the center of several other larger communities: Nashville, Bowling Green, Hopkinsville, and Clarksville, Tennessee. Manufacturing has been a large part of the local economy for generations, but community leaders recognize the vulnerability of a narrow economic base. In order to encourage a versatile economy, Russellville invested in its telecommunications utility.

The community wants to encourage small business while simultaneously providing manufacturers the connectivity they need. Leadership sees the ability to remain competitive directly tied to their network. In addition to the economic development opportunities a fiber network can provide, communities like Russellville rely on electricity revenue from large consumers. Retaining the large electric consumers that also provide jobs in the community is a must.

Russellville's electric utility created a strong advantage when it was time to venture into telecommunications. EPB had already established a strong relationship with its Russellville customers, says White, and locals felt they could trust their municipal electric provider.

LightTUBe Financially Secure in Tennessee

Tullahoma Utilities Board's triple-play FTTH LightTUBe, began serving Tullahoma in 2009. The fiber network utility is paying off its city bond debt on schedule reports the Tullahoma News.

The network's income during the first four months of fiscal year 2014 is a positive $58,939. General Manager Brian Skelton spoke with Chris Mitchell in July 2013 and expressed confidence that that network will continue to operate in the black. The News reported on our podcast interview with Skelton and provided some recent updates:

With an estimated potential customer base of 9,000 in the TUB service area, LightTUBe services 3,201 fiber customers. That number is slightly ahead of goal (3,186) and represents nearly 36 percent market penetration against primary competitor Charter Communications.

Tullahoma deployed its network to encourage economic development. In 2011, we reported on J2 Software Solutions. The company located its headquarters in Tullahoma because LightTUBe offered fast, reliable, affordable service. 

According to the News article, expenditures on Internet service remain consistent while subscriptions grow. The Tullahoma Utilities Board (TUB) only recently approved a $7 rate increase for video service due to an increase in the cost of television content. When content rates rose in the past, TUB chose to absorb the increase but the cost of content continues to increase for all providers. Since 2009, TUB increased Internet service speeds five times without increasing prices. From the article:

”LightTUBe is in a very comfortable position from a financial perspective. Our biggest concern at this point is the unreasonable price increases that we (and others in the video business) are seeing from many of our channel providers,” said Skelton.

That comfortable financial position appears to rest largely on the shoulders of LightTUBe’s Internet service.

Palm Coast's FiberNET Produces Dramatic Savings Locally

We last took a look at Palm Coast’s FiberNET over two years ago when Broadband Communities featured the open access fiber network along Florida’s upper east coast. Due to its initial focus on community anchor institutions and incremental build out, FiberNET serves as an outstanding example of how to justify a network investment with cost savings. We recently spoke with Courtney Violette who created the initial business plan for FiberNET under his previous role as Palm Coast’s CIO; he is now a Managing Partner with Magellan Advisors, an international broadband planning firm.

A presentation on the Palm Coast government website shows how FiberNET generates hundreds of thousands of dollars in annual cost savings for the City of Palm Coast, Flagler County School District and Florida Hospital. The data is impressive. The City of Palm Coast alone saves around $160,000 per year by switching to FiberNET for its networking needs.

Flagler County School District is likely the biggest beneficiary of cost savings in the community. Before FiberNET came onto the scene, the District paid Bright House Networks more than $500,000 per year for network services over a hybrid fiber-cable network. Now Flagler County School District pays around $300,000 for faster, more reliable services over FiberNET’s all-fiber network. These savings paid for the schools’ initial cost of connection after just one year.

Florida Hospital and its affiliates are also saving big. Affiliated doctors’ offices and clinics are required to maintain a 10-Mbps (minimum) connection with the hospital. Before FiberNET, these connections cost around $900 per month from the local incumbent. FiberNET now offers them for $250 per month. Similarly, the Hospital itself saves tens of thousands on its annual networking costs by switching to FiberNET.

Charter Prices Inspire Washington City to Consider its Own Network

Ellensburg, located in central Washington, is considering the pros and cons of a municipal fiber network. A big pro for the community of 18,000 is the ability to predict costs rather than depend on Charter Communications. Charter wants to begin charging $10,300 per month for municipal connectivity it previously supplied at no cost in return for access to the public rights-of-way.

The Ellensburg Daily Record recently reported that the City Council unanimously passed the first reading of an ordinance that will allow the city to establish a telecommunications utility. The city began using Charter's fiber optic network in 1997 as part of the city's franchise agreement. Educational institutions, public safety, and the county public utilities district also use the network. Ellensburg owns and operates its own electric and natural gas utilities. Energy Services Director Larry Dunbar was quoted:

“It’s clearly in the city’s best interest to just build it on its own and own it, compared to leasing it,” he said.

The community needs approximately 15 miles of fiber optic network to replace Charter's institutional network. The two parties are still negotiating and may still reach an agreement for a new contract although the article reports:

In June, Council directed the city to solicit vendor proposals for building a city network, and Dunbar said the city is close to granting the contract.

He declined to share a total cost because contract negotiations are ongoing, but said it makes more sense for the city to build the network now rather than pay in perpetuity, he said.

“A telecommunications network is like a 35-year endeavor,” he said. “If we would have done a lease, we could have bought two or three networks over 35 years.”

Local median KIMA TV recently covered the story:

Cedar Falls Shows Long Term Muni Network Success: Community Broadband Bits Episode #75

Cedar Falls Utilities operates one of the oldest community owned networks in the nation. It started as a cable network in the 90's, upgraded to FTTH recently, and this year began offering the first citywide gigabit service in Iowa. CFU Communication Sales Manager Kent Halder and Network Services Manager Rob Houlihan join me for Community Broadband Bits podcast 75. We discuss why Cedar Falls Utilities decided to add cable to their lineup originally and how it has achieved the incrediblely high take rates it maintains. We also discuss the importance of reliability for municipal network and why they decided to transition directly to a FTTH plant rather than just upgraded to DOCSIS 3 on their cable system. Finally, we discuss its expansion into the rural areas just outside of town. Read all of our coverage of Cedar Falls on MuniNetworks.org. Read the transcript of our discussion here. We want your feedback and suggestions for the show - please e-mail us or leave a comment below. Also, feel free to suggest other guests, topics, or questions you want us to address. This show is 20 minutes long and can be played below on this page or via iTunes or via the tool of your choice using this feed. Listen to previous episodes here. You can can download this Mp3 file directly from here. Find more episodes in our podcast index. Thanks to Haggard Beat for the music, licensed using Creative Commons.

GRUCom Gives Gainesville Gigabit Broadband

Gainesville Regional Utilities (GRU) has been deploying fiber in the north-central Florida home to the University of Florida (UF) since the late 1990s. We briefly mentioned them last year when Gig.U teamed up with GRUCom, GRU’s telecom division, to connect neighborhoods and businesses surrounding the University with fiber broadband. We’ve since taken a deeper look at GRUCom’s work and like what we see.

GRUCom was born after the FCC reclaimed the spectrum GRU used for microwave control of its SCADA systems. GRU naturally switched to fiber, and in the process of running lines for its utilities, it ran into crews doing the same for Shands Hospital, part of the University. Realizing the substantial demand for fiber broadband across the county, GRU created GRUCom to serve that demand more efficiently.

GRUCom Director, Ted Kellerman, points out that, as an enterprise division of GRU, GRUCom has a mandate to generate profit. This essentially means that the network only expands on a business case basis, so prices can vary across customers depending on connection costs. Despite this constraint, GRUCom manages to provide reliable high-speed data services at reasonable prices. 

GRUCom connects 100 public facilities including government, fire department, utilities and Alachua County Schools and Libraries. All facilities are on redundant fiber rings with route diversity and 10-Gbps capacity. Seven locations receive 1 Gbps service while the rest take either 10 or 100 Mbps. The average cost for 10 Mbps connections is $400 and $900 for the 100-Mbps links.

Denver Suburb Seeks to Take Back Local Authority

Centennial is asking its voters to reclaim local authority this election. City leaders want to make better use of an existing fiber optic system but a 2005 Colorado state law pushed by a corporate telephone company precludes it. If the citizenry reclaims its local authority through referendum, the City can take the next step toward providing indirect services via its fiber network. 

We contacted City Council Member Ken Lucas to find out more about the ballot question. Centennial is a relatively young city that was incorporated in 2001 and has about 100,000 residents. Lucas told us that this ballot question is not only about using their fiber resources. The community of Centennial considers this a critical step toward maintaining a business friendly environment.

The National Transportation Safety Board (NTSB) provided grants to install the existing network for traffic control, security cameras, and public works monitoring. The City contributed only approximately $100,000 to the network, valued at $5 million. Traffic and public safety now use only two strands of the network that runs through the center of town. City leaders want to use the remaining 94 strands to improve access in the community. To see a map of the fiber and open conduit in Centennial, check out the City's PDF.

Approximately 94% of Centennial businesses and 85% of households are within one mile of the fiber backbone. Residents and business owners can now choose between Comcast or CenturyLink and rates are high. Lucas tells of one business owner who asked Comcast to provide 1 Gbps service to his building. Comcast offered to lease a line to the business at a high rate, but the customer would still have to pay $20,000 for installation.

Rates Approved for Opelika Community Fiber Network

We have followed happenings in Opelika, Alabama, for three years as the community investigated the benefits of a fiber network. They contended with a Charter misinformation campaign and voted yes on a referendum. Construction began in 2012, Opelika Power Services (OPS) tested the network, and recently the Opelika City Council approved proposed rates. 

OANow.com now reports that the FTTH network and smart grid project is ever-so-close to offering triple play services to the city's 28,000 residents and local businesses. 

OPS offers three standard bundled plans, but customers can also customize. All three include voice:

  • Essential - $99.95 - 75 channels, 10/5 Mbps data
  • Choice - $139.95 - 132 HD & SD channels, 30/30 Mbps data
  • Ultra - $154.95 - 207 HD & SD channels, 30/30 Mbps data

Data offerings for customized plans range from 10/5 Mbps for $34.95 to 1 Gbps symmetrical for $499.95.

Crap Cable Threatens Cloud Services

For my money, the best headline of last week was "The U.S.'s crap infrastructure threatens the cloud." The rant goes on to explain just how crummy our access to the Internet is.
As a patriotic American, I find the current political atmosphere where telecom lobbyists set the agenda to be a nightmare. All over the world, high-end fiber is being deployed while powerful monopolies in the United States work to prevent it from coming here. Some of those monopolies are even drafting "model legislation" to protect themselves from both community broadband and commercial competition.
He nails a number of important points, including the absurdity of allowing de facto monopolies to write the legislation that governs them. However, Andew Oliver's article is a bit muddled on the issue of "monopoly." I have argued with several people that the term "monopoly" has historically meant firms with large market power, not the more stringent definition of "the only seller" of a good. It is not clear how Oliver is using the term. Because of this confusion, you can come away from his piece with the firm idea that it is primarily government's fault we have a duopoly of crap DSL and less crappy cable. He repeatedly says "state-sponsored monopolies." However, no local or state government may offer exclusive franchises for cable or telecom services and the federal government hasn't officially backed monopolies for decades. This is a key point that many still fail to understand - a majority seem to believe that local governments bless monopolies when local governments actually are desperate for more choices. This is why they fall all over themselves to beg Google to invest in their community or they build they own networks (over 400 communities have wired telecom networks that offer services to some local businesses and/or residents). Poor laws and regulations have helped the massive cable and telephone companies to maintain their status - that is why they spend so much on lobbying and political contributions at all levels of government.