For the second week in row, our staff has felt compelled to address a misleading report about municipal networks. In order to correct the errors and incorrect assumptions in yet another anti-muni publication, we’ve worked with Next Century Cities to publish Correcting Community Fiber Fallacies: Yoo Discredits U Penn, Not Municipal Networks.

Skewed Data = Skewed Results

Professor Christopher S. Yoo and Timothy Pfenninger from the Center for Technology, Innovation and Competition (CTIC) at the University of Pennsylvania Law School recently released "Municipal Fiber in the United States: An Empirical Assessment of Financial Performance." The report attempts to analyze the financial future of several citywide Fiber-to-the-Home (FTTH) municipal networks in the U.S. by applying a Net Present Value (NPV) calculation approach. They applied their method to some well-known networks, including Chattanooga's EPB Fiber Optics; Greenlight in Wilson, North Carolina; and Lafayette, Louisiana's LUS Fiber. Unfortunately, their initial data was flawed and incomplete, which yielded a report fraught with credibility issues.

So Many Problems 

In addition to compromising data validity, the authors of the study didn’t consider the wider context of municipal networks, which goes beyond the purpose of NPV, which is determining the promise of a financial investment.

Some of the more expansive problems with this report (from our Executive Summary):

Telecompetitor - May 25, 2017

Municipal broadband networks do not have a strong financial track record, according to an analysis conducted by the University of Pennsylvania’s Center for Technology, Innovation and Competition. The municipal broadband financial analysis, which looked at 20 municipal fiber projects, found that only nine were cash-flow positive and that of those, seven would need more than 60 years to break even.

...

An Opposing View

Municipal network advocate Christopher Mitchell, director of the Community Broadband Networks Initiative at the Institute for Local Self-Reliance, pointed to several flaws in the Penn Law municipal broadband financial analysis.

He noted, for example that a substantial portion of the 20 networks studied were “early in the process and very small.” He also argued that the 2010-2014 study period may have biased the results, as that period included a recession and subscribership for some of the networks has increased substantially since 2014. He noted, for example, that EPB’s broadband network in Chattanooga had about 50,000 to 55,000 subscribers in 2014 but has now hit the 90,000 mark.

The Penn Law authors’ approach was “not the proper way to measure these networks,” said Mitchell in a phone call with Telecompetitor. The analysis “doesn’t take into account jobs created or the impact on the municipal budget,” he said.

He argued, for example, that a municipality that previously paid $1 million annually for connectivity might instead pay itself $500,000 for connectivity on the municipal network.

...

Read the full story here.

It’s no small feat to plan, deploy, and operate a municipal citywide Fiber-to-the-Home (FTTH) network, but communities are doing it. We’ve put together a Citywide Municipal FTTH Networks list and a map, with quick facts at your fingertips. If your community is considering such an investment, this list can offer a starting point on discovering similarly situated locations to study.

The list is divided by state and each state heading offers a description of any barriers that exist and a link to the statute in question. Under each community, we also included relevant links such as to the provider’s website, coverage on MuniNetworks.org, and reports or resources about the network.

We used four basic criteria to put a community on our list and map:

• The network must cover at least 80% of a city.
• A local government (city, town, or county) owns the infrastructure.
• It is a Fiber-to-the-Home network.
• It is in the United States. 

Share the list far and wide and if you know of a community network that meets our criteria that we missed, please let us know. Contact H. Trostle at htrostle@ilsr.org to suggest additions.

Residents of Vernon, California, will soon have the option to connect to the City's fiber optic network. Vernon offers dark and lit fiber to local businesses via 35 miles of fiber but residents are stuck with slow DSL connections. An EGPNews.com article reports:

City officials say they hope to bridge the digital gap for its residents by becoming an Internet Service Provider, creating, and operating a small-scale broadband residential service program. The Internet will be provided to residents through direct fiber optic connections or via a wireless service connection.

The program will be available to all existing and future residences in the city.

Vernon Light & Power Department Fiber Optic Division serves this town's 5.2 square miles located south of downtown Los Angeles. The population is only 112 in 31 existing households. The network will also connect a future residential project, Meta Housing, scheduled to be completed by the end of 2013. The City is the smallest incorporated city in the state, describing itself as "exclusively industrial." Vernon is home to over 1,800 businesses that employ 50,000 people from surrounding communities. 

The new initiative will connect residents for a one-time connection fee of $100. Monthly service will cost $40.65, which is $10 less than DSL. The fiber connections will be 10 times faster than current DSL speeds. Residents should be able to access the network by November 1.