In the center of Tennessee sits Murfreesboro, the fastest growing city in the state with 108,000 people and one of the fastest growing cities in the U.S. (Just 10 years ago there were only 68,000 residents.) Murfreesboro is also one of the next communities to show an interest in a publicly owned fiber network to improve connectivity.
In an August press release [PDF], Murfreesboro Electric Department (MED) described their existing 19-mile fiber infrastructure, used for communication and control purposes for the electricity distribution system. The fiber was deployed in 2008, says MED General Manager Steve Sax, and the utility is now making plans to use spare fibers for Internet connectivity. MED is in the process of expanding its network by an additional 20 miles.
Sax also stated that MED is working with Middle Tennessee State University to develop a fiber optics pilot project but did not offer details other than it is "very similar to what Google is doing in Nashville."
MED and the Middle Tennessee Electric Membership Cooperative (MTEMC) recently entered into negotiations for MTEMC to acquire the MED. The city of Murfreesboro is in the center of the MTEMC service area and the two have been duplicating efforts in some areas. The city and cooperative signed a memo of understanding in June and the process is moving forward slowly. MTEMC serves over 200,000 cooperative members in a four county service territory; the MED provides electricity to approximately 56,000 customers.
MTEMC does not offer telecommunications services at this time but according to a Daily News Journal article, the cooperative is investing in fiber:
"We have been working with an enterprise ... on a fiber network," said [Brad Gibson, MTEMC chief business officer] about the utility that covers Rutherford, Wilson, Williamson and Cannon counties.
MTEMC has contracted with a private company to install and manage its fiber network but the utility is also researching the possibility of developing its own network, he said.
After a feasibility study on the possibility of a municipal triple-play fiber network left Cleveland Utilities feeling "…not overly optimistic…" community leaders have decided to rethink their strategy. The utility board recently voted 5-0 to look deeper at a network that would offer only Internet and voice services.
Rather than study the feasibility of serving the entire community, CU wants to first try their hand at working on a limited area with a pilot project. The next step is to work with a consultant that will conduct a more focused feasibility study and develop a business plan.
"I will go ahead and tell you that it's not overly optimistic about us being able to provide 'triple play' [Internet, television and phone] services," Webb said. "The capital requirements are extensive, and the startup cost could present issues."
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"There is a possibility of offering services that are not full-blown services," Webb said. "There are a lot of decisions yet to be made, and a lot of review has yet to take place."
After more review of the study, Webb asked the board at the July meeting to consider further consideration for the pilot project, much like the process in Erwin, Tennessee. The Times Free Press covered the meeting where Webb reported that Erwin expected to break even on its pilot project once it took on 180 customers. After recently commencing the project, it quickly signed up 150 subscribers.
According to a recent report in the Jackson Sun, the city of Jackson, Tennessee is now the seventh “Gig City” in the state of Tennessee. Jackson Energy Authority (JEA), Jackson’s municipal utility received the special recognition at a January business summit. The Sun focuses on several existing and expected economic benefits that accompany municipal gigabit connectivity.
“These ultra-fast Internet speeds will help to assure innovation as it relates to the next generation of education, medical care, public safety and economic development,” JEA CEO John Ferrell said.
Ferrell also noted that ultra-fast Internet connectivity benefitted businesses in the Jackson community by allowing them to avoid excess inventory while still being able to provide customers with fast access to physical products when they need them.
"A good example is where an automotive supply company produces a part for a car at one plant — such as an interior headliner — and ships that part to the assembly plant to be installed in the car," Ferrell said. "Many times, this part is produced on the same day at one plant that it is installed at another plant."
Community leaders in Jackson hope their new Gig City status can help them to gain the same kind of economic development benefits that have come to places like Chattanooga, Tullahoma, and Morristown over the past several years. EPB told the Sun:
"The economic impact has been huge," J. Ed. Marston, vice president of the Electric Power Board in Chattanooga, said. "New companies have moved to Chattanooga, and a lot of investors, outside investors, are looking at Chattanooga."
As of this January, the FCC defines broadband as 25 Mbps downstream and 3 Mbps upstream, but in some rural areas in the United States, people are still struggling to access DSL speeds of 768 kbps. In a few extreme cases, individuals who rely on the Internet for their jobs and livelihoods have been denied access completely.
The sad state of affairs for many Americans who subscribe to the major Internet service providers like AT&T and CenturyLink was recently chronicled in an article on Ars Technica that examined AT&T’s stunning combination of poor customer service, insufficient infrastructure, and empty promises to subscribers. It tells the unfortunately common story of the little guy being systematically overlooked by a massive corporation focused solely on short-term profit maximization.
Mark Lewis of Winterville, Georgia, and Matthew Abernathy of Smyrna, Tennessee, are two examples of AT&T subscribers who, upon moving into new homes, found that not only were they unable to access basic DSL speeds, but that they had no Internet access whatsoever. Alternatively citing a lack of DSL ports and insufficient bandwidth, AT&T failed to provide Lewis Internet access over the course of nearly two years. As for Abernathy, the corporation strung him along for 9 months without providing DSL, forcing him and his wife to rely on a much more expensive Verizon cellular network to go online.
The city of Morristown, Tennessee received more positive economic news recently when Sykes Enterprises, a global company that operates in more than 20 countries, announced plans to open a call center in an abandoned big-box store and connect to the city’s municipal network, FiberNet. Sykes estimates that the call center will employ up to 500 workers over the next three years, the large majority of which will come from the Morristown community.
According to the president of the Morristown Chamber of Commerce, Marshall Ramsey, the existence of FiberNet played a role in attracting the 50,000-plus employee firm to Tennessee:
For Morristown to be able to have a local provider and a secondary provider in AT&T with a gig gives us that redundancy that most companies can’t get elsewhere in the country.
FiberNet is operated by Morristown Utility Systems, the publicly owned electric and water utility. It began offering gigabit Internet speeds in 2012, though it has served local businesses since 2006.
This is the second time in two months WBIR – Morristown’s NBC network – has run a story about FiberNet. In May, the station covered the way in which the municipal fiber network has stimulated economic development by increasing competition between service providers. When FiberNet upgraded its network to provide gigabit speeds, the incumbent telephone company in Morristown, AT&T, responded with some upgrades of its own. Morristown is one of a select few cities to have multiple gigabit-offerings, along with neighboring Chattanooga, Tennessee.
Following up on our post last week noting the new video from Tennessee Fiber Optic Communities, another video recently posted explains what needs to change in Tennessee law for Chattanooga to expand Internet access beyond the current footprint. EPB Chief Operating Officer David Wade also explains the process the municipal electric distributor will use to connect nearby communities.
In a video calling for "Broadband Equity," the Tennessee Fiber Optic Communities have released a video explaining why communities must have their local Internet choice restored.
When a community invests in a municipal broadband network, it often does so because it hopes to reap economic benefits from the network. Many people and organizations have explored the positive relationship between municipal Internet networks and economic development, including a White House report published in January 2015. Municipal networks create jobs by ensuring businesses have fast, affordable, and reliable Internet access; the old DSL and cable networks just don't cut it. These networks improve the productivity of existing businesses and attract new businesses to communities, allow individuals to work from home more effectively, support advanced healthcare and security systems, strengthen local housing markets, and represent long term social investments in the form of better-connected schools and libraries. They also create millions of dollars in savings that can be reinvested into local economies.
"Upgrading to higher speed broadband lets consumers use the Internet in new ways, increases the productivity of American individuals and businesses, and drives innovation throughout the digital ecosystem." - Executive Office of President Obama
When municipalities choose to deploy fiber networks, they introduce Internet services into the community that are not only significantly faster than DSL and cable, but more reliable. With more reliable fiber connections, businesses and individuals are far less likely to experience temporary blackouts that can halt productivity in vexing and expensive ways. And because these networks are locally-owned and operated, business owners do not have to spend hours on the phone with an absentee Internet Service Provider like AT&T in the (albeit unlikely) event of a problem.
We at the Institute for Local Self-Reliance have catalogued numerous examples of economic development achievements that have occurred as a result of local governments deploying a municipal broadband network. Below, you can find a wide range of articles, studies, anecdotes, and other resources that speak to the economic successes enabled by municipal networks, organized by topic:
Look no further than Morristown, Tennessee, for an example of job creation thanks to municipal fiber. The city took advantage of its local electrical utility, Morristown Utility Systems, to provide gigabit speeds, and businesses jumped at the opportunity. In 2013, Oddello Industries, a furniture manufacturer, brought 228 jobs to the community after investing in a $4.4 million site expansion in Morristown. More recently, a call center looking to relocate to the city was wowed by the municipal utility’s offer to install fiber for free because the city valued the future economic benefits the call center would bring to Morristown over the cost of the fiber installation.
Our economic development fact sheet outlines several of the job creation opportunities that have resulted from municipal networks.
In 2012, Spirit Aerosystems opened up a new manufacturing facility in Chanute, Kansas, creating 150 jobs that require high quality broadband Internet.
HomeServe, a home repair company, expanded its call center to 140 employees because of Chattanooga, Tennessee’s robust municipal broadband infrastructure; in Chattanooga, HomeServe employees could get faster residential service than executives had in the company's Miami headquarters.
In 2015, Hardide Coatings, a surface coating manufacturer located in Henry County, Virginia, that relies on the municipal broadband provider MiNet, added 29 high-paying jobs to the local economy.
"You can't grow jobs with slow Internet." - Stephanie Rawlings-Blake, Mayor of Baltimore
The Dalles, Oregon, received a much-needed economic boost in the form of 200 jobs and millions of dollars in tax revenues when Google invested $1.2 billion in a data center that used the city’s municipal fiber network, Q-Life.
A new data center in Dawsonville, Georgia, created 12 high-paying jobs and expanded the local tax base thanks to the municipally-owned North Georgia Network.
Increased competition in Chattanooga, Tennessee, due to the city’s powerful municipal fiber network, induced Comcast to bring 150 new jobs to town.
The city of Mount Vernon, Washington has two things in common with our country’s first president, but unlike George, it boasts an impressive municipal broadband network that has attracted high-tech businesses. For example, a digital legal firm, Blank Law, relocated from Seattle to Mount Vernon in order to take advantage of faster speeds offered by the city’s municipal broadband network. While high-speed Internet was not the only reason Blank Law cited for choosing Mount Vernon over other towns (other reasons include quality of life and free parking), it played a significant role. Fiber is rarely the sole reason for a relocation, but it can often be a deciding factor.
Zeyuan, a Chinese wood floor manufacturer, and GOK International, a Chinese furniture assembly plant, built manufacturing centers in Danville, Virginia, knowing they would benefit from connecting to the city’s municipal broadband network.
"It's almost a feeling of disbelief when we tell companies today we can provide a gig to your business and to your house...These companies want to go where they can see the gig service." - Marshall Ramsey, President of the Morristown, Tennessee Chamber of Commerce
Pixel Magic, a visual effects producer, and Tapes Again, a media reproduction and processing company, both set up shop in Lafayette, Louisiana to support the state’s burgeoning film industry — and access to the municipally-owned LUS Fiber greatly facilitated these activities.
Faneuil, a customer care center, and SPARTA Inc., a defense contractor, were attracted to Martinsville, Virginia in large part because of the city’s municipal network, MiNet.
In the small Minnesota town of Gibbon, the fiber network from the RS Fiber Cooperative convinced the owner of Advocate 3D to take up residence in town where the family could live the small-town life but the business could still obtain the high-speed, reliable connectivity they needed for their 3D printing business.
Municipal networks serve existing businesses and keep critical jobs in town:
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The small Minnesota town of Windom nearly entered crisis mode when Fortune Trucking, a local company that employed 47 people in a town of 4,600, announced that slow Internet speeds might force it to leave town. Although the company’s headquarters were located a mile outside of the Windom’s jurisdiction, community members successfully lobbied to bring municipal fiber to Fortune, saving those jobs and stabilizing the local economy.
Alpha Natural Resources, a coal mining company, stayed in Bristol, Virginia, thanks to the BVU municipal fiber network
When the city of Princeton, Illinois set up a municipal broadband network, it kept 300 jobs in the community with the global industrial machinery company, Ingersoll Rand.
"Municipal broadband can be a powerful lever against the digital divide that condemns people to the isolation and reduced economic opportunities experienced by many of our low-income, disabled, and people of color community members" - Kshama Sawant, Seattle City Councilmember
In this Podcast, Chris speaks with Curtis Dean of Iowa Municipal Utilities about the prevalence of municipal networks in that state, focusing in on economic development results starting at 11:10. Dean highlights Hansen’s Clothing, a high-end men’s clothing manufacturer in Spencer, Iowa that expanded its online business exponentially when it connected to the municipal broadband network.
Municipal networks support home-based productivity:
In 2010, DirecTV announced the creation of a virtual call center, allowing 100 residents in southwestern Virginia to work from home, relying solely upon municipal broadband access.
150 home-based English teachers in Powell, Wyoming were connected to students in South Korea by the Korean venture capital firm, Skylake Incuvest; this unorthodox pairing was made possible by Powell's investment in FTTH.
Medical companies Ohio Health and Cardinal Health; Battelle Memorial Institute, a non-profit that relies on quantum computing to encrypt information; and numerous educational facilities use Dublin, Ohio’s municipally-owned fiber network, Dublink, for their healthcare, education and research needs.
"We are embarking on new initiatives with our local school district and regional colleges and universities to leverage broadband and to facilitate discussion between schools and the business community to strengthen, retain and attract quality workforce" - Dana McDaniel, Deputy City Manager of Dublin, Ohio
Lakeland, Florida invested in dark fiber community infrastructure, and has since reaped the rewards; the Florida Polytechnic University and Lakeland Regional Health, a medical center, both rely on the network for their operations. (Jump to 16:30 of the Broadband Bits Podcast for more details).
Municipal networks initiate tech booms and incubate start-ups:
"...in the 21st century, in this age of innovation and technology, so much of the prosperity that we're striving for, so many of the jobs we want to create, depend on our digital economy" - President Barack Obama, Speech at Cedar Falls Utilities
One Bay Area city, San Leandro, has used a city-owned fiber conduit to rival Silicon Valley tech companies, and now houses the world’s largest cluster of 3-D printing firms, along with the Westlake / OSIsoft Technology Complex, a tech campus.
The city of Dublin, Ohio, is home to the Dublin Entrepreneurial Center, a combination start-up incubator and data center located in the city’s metro center offices that now lists more than 80 tenants.
In the town of Spanish Fork, Utah, a municipal network is responsible for community savings of $2 million annually, as well as local government revenues exceeding $1 million, which can be used for community projects and initiatives.
Howard County, Maryland, has seen significant public savings (of up to $3 million a year) and impressive technological advances in its school system since switching to municipal broadband services.
Municipal networks increase home values:
Housing prices increased by 50 percent in one year when Google decided to locate a data center in the city of The Dalles, Oregon, in 2006 on account of its advanced technological infrastructure and high-speed municipal broadband access.
Another study, this by the Fiber-To-The-Home Council Americas in conjunction with researchers from the University of Colorado, showed that single family homes that can boast a FTTH connection are worth, on average, 3.1 percent more than their fiberless counterparts.
This White House report (which, by the way, utilized ILSR data!) finds that the existence of municipal networks and the market competition that these networks stimulate has tremendous economic benefits for local businesses and communities. The 37-page report highlights the successes of Chattanooga, Tennessee; Wilson, North Carolina; Lafayette, Louisiana; Scott County, Minnesota; Leverett, Massachusetts; and the Choctaw Nation Tribal Area in Oklahoma.
The New York Times highlights municipal fiber in a recent article: “For the Tech Savvy With a Need for Speed, a Limited Choice of Towns With Fiber.”
A report by the Government Accountability Office (GAO), “Federal Broadband Deployment Programs and Small Business,” argues that municipal broadband access positively affects small businesses by allowing them to streamline operations and improve efficiency.
Why do many municipal broadband networks end up being built in conservative districts, crossing political lines? Jim Baller, Joanne Hovis, and Ashley Stelfox of the Coalition for Local Internet Choice, in conjunction with Broadband Communities’ Masha Zaegar, argue that job creation and economic development is the “killer app” for local fiber networks.
Robert Pepper, Vice President of Global Technology Policy at the multinational tech company, Cisco, published an op-ed in The Huffington Post, which highlights the need for universal broadband adoption. Read: The Key to Social and Economic Development? Broadband Adoption.
"The message to policymakers is clear: If you want to increase economic growth, focus on broadband." - Robert Pepper, Vice President of Global Technology Policy at Cisco
Corporate site selectors have been placing more and more emphasis on broadband Internet access as they look for locations in which their companies can thrive. For more on this, read: “The Importance of Broadband to Economic Development.”
Does Broadband Boost Local Economic Development? ask researchers at the Public Policy Institute of California. They find that broadband access has a statistically significant economic benefit in the fields of business management, utilities, and technology.
A Novermber 2016 report from the consulting firm Analysis Group and funded by Fiber-to-the-Home council shows how competition drives lower prices and better download speeds for everyone. Specifically, the report focused on markets with Gigabit service.
Chris interviews Michael Curri, President of Strategic Networks Group, an organization that provides technical advice regarding broadband Internet to both firms and municipalities; Curri indicates a multiplier effect of ten times - meaning a return of $10 for every dollar invested where economies effectively utilize broadband.
Many communities, like Bozeman, Montana, view municipal broadband as a potential economic growth model that will allow them to catch up to other cities that have embraced high-speed Internet access; in this Community Bits Podcast, Chris speaks with Brit Fontenot, Economic Development Director for the city of Bozeman; David Fine, Bozeman Economic Development Specialist; and the President of Hoplite Industries, Anthony Cochenour.
"Having the infrastructure in place around technology, as well as the asset of this really historic and charming downtown, is a really interesting intersection and I think a lot of people are drawn to that." - Kimberly Van Dyk, Director of Planning and Community Revitalization of Wilson, North Carolina
A Knoxville news station, WBIR, covers Chattanooga's municipal network, focusing on the economic opportunities it has created - opportunities that Knoxville has missed out on because of its lack of high-quality service.
Athens, Tennessee, has struck a deal with Chattanooga's EPB and the Volunteer Energy Cooperative (VEC) that could facilitate the city's interest in a municipal fiber network. According to the Times Free Press, the Athens Utility Board (AUB) hammered out the final agreement earlier this month.
AUB is leasing fiber from VEC that carries a gigabit signal from EBP to the AUB system.
According to the article, AUB has explored the prospect of developing their own fiber network as early as November 2013 and now offers Internet access to one business in a local business park. AUB General Manager Eric Newberry told the AUB Board that they plan to approach other local businesses to set up additional commercial accounts. They plan a slow buildout and urge local businesses, many of them clamoring for a reliable connection, to be patient as they take next steps.
Athens is part of the Chattanooga-Cleveland-Dalton area in the southeast corner of the state and home to around 13,500 people. In March, the City Council voted unanimously to pass Resolution 2015-11 supporting local authority for telecommunications. [See the PDF of the Minutes p.1]
Thusfar, the investment has cost $58,258.69 for labor, materials, and equipment. The Board had budgeted $100,000 for the project.
For the first time in four years, EPB is asking its board of directors to approve a rate increase for electric power charges, reports the Chattanoogan. According to EPB, revenue from the Fiber Optic division has kept electric power prices in check for the past four years.
Price increases are always a frustration for residents and businesses, but this is actually another example of how the entire community, even those who may not subscribe to EPB's fiber network, have beneifted via reduced energy rates. We wrote about this last in 2012.
According to the article, several years of deadly storms have caused damage that have increased the average cost of cleanup from $2 million per year to $6 million per year. Additionally:
Officials said this rate increase "is driven by a continuing trend over several years of higher-than-normal costs associated with the greater frequency of devastating storms and by large peak energy demand charges that EPB pays to TVA for power generation. These demand charges are not covered by regular power sales during months with extreme fluctuations in temperature, particularly when there are a few days of extreme temperatures and the rest of the month is much milder."
The article also notes that the fiber optic division has made $13.4 million over the past fiscal year. Debt from the investment made to offer telephone services is expected to be paid off this June.
[EPB CEO Harold] DePriest said it was "the best investment we ever made."
