Submitted by acohill on Wed, 04/20/2005 - 15:06
Ray Buzzard, of Dalton Utilities, spoke about the Dalton, Georgia community broadband project. Dalton's community fiber project, only about two years old, has already had very positive economic development effects by keeping hundreds of manufacturing jobs in the community. The high performance, low cost network persuaded some local manufacturers to stay in the community rather than moving elsewhere.
Local government was a key anchor tenant by making an early commitment to use the system.
Dalton adopted a retail business model, in which the utility sells services directly to customers (voice, video, data). They had to do this because they could not attract service providers with the low number of potential subscribers. The project has achieved a 45% take rate in less than two years, and 47% is their break even point--they expect to meet that before the end of 2005.
Some of the advice Buzzard had included:
Submitted by acohill on Tue, 04/19/2005 - 10:46
The Monday afternoon keynote was by Keith Wilson, the CEO of Dynamic City, which has the contract to design, build, and operate the Utah UTOPIA project (an 18 community fiber project serving 300,000 homes).
The U.S. has the most expensive broadband in the world; the per megabit cost of broadband in Japan is ninety cents. In Korea, it's $2.50. In the U.S., it averages $25-$30 per megabit, or thirty times higher than the lowest. Clearly, the current reliance on incumbents to provide broadband is not working.
Wilson identified four characteristics of a viable communitywide network:
A wholesale business model that allows for many service providers (as opposed to just one voice provider, one video on demand provider, etc.) reduces the risk for the network owner--if a service vendor fails or pulls out, the financial health of the network is less at risk.
Networks are like airports--a shared facility built by the community and used by multiple service providers (airlines) to offer a variety of services. Airports are good for communities because no airline would come to a community and build their own airport.
Communities need a "communications utility," and no less than the future of the community is at stake. A successful network must have widespread availability, must be affordable, and must offer customers choice. A closed network cannot offer all three, because the incumbent providers don't want competition. Private buildouts (the current situation with incumbents) capture the future of a community because no other provider will come, so the community becomes hostage to a single company.
If regulated monopolies have not worked in the past in terms of affordability and choice, why do we think unregulated monopolies (what we have now, in effect) will work better? What is best for a single company is not necessarily best for the businesses and residents of a community.
Submitted by acohill on Tue, 04/19/2005 - 10:04
Scott Wilkinson, a VP for Hitachi Telecom, gave a talk about broadband in Japan. The typical broadband fiber connection in Japan is 100 megabits/second, and typically costs about $58/month; costs have dropped 66% in the past four years. Most broadband connections in Japan are data only, so the "triple play" is not a big consideration. The connections support video on demand, which is very popular, but there is no broadcast television content. The connections work very well for video on demand, with near real time viewing (i.e. no long wait to download before viewing).
Fiber To The Home (FTTH) is growing rapidly in Japan, and the big loser is cable modem service. The electric companies in Japan are NOT offering Broadband over Powerline (BPL), but instead are selling fiber service, which should be a clue to communities that think BPL is the way to go.
ADSL is seen as a problem in Japan, even though it has a high subscriber base. ADSL and VDSL are both available and offer much higher data rates than typical DSL services in the U.S., but the distance senstivity is a big issue, as subscribers just a few blocks away from each other can end up with very different levels of service.
The typical range of applications in Japan are very similar to the applications and services in the U.S., but the Japanese service providers have found that when people are given more bandwidth, they use it, which refutes the telco argument that no one has a need for high bandwidth connections. One of the trends is more work from home and from remote locations; the high bandwidth supports high quality videoconferencing and actually often provides a better level of service than is available in some business offices. So affordable broadband has become an engine for new kinds of work opportunities.
Services in Japan are driving demand, not connections. As more services ae available, more people sign up for high speed connections. The installation fee for fiber averages $150, so that can be a source of funding to help pay for community fiber builds. Fiber systems in Japan are profitable, with fees distributed this way:
Submitted by acohill on Mon, 04/18/2005 - 14:39
PacketFront is a vendor of network equipment designed specifically for community broadband projects. Matt Wenger, an expert in communitywide broadband and senior analyst for the company, gave the talk.
Wenger strongly advocated a services orientation for community broadband projects. His thesis throughout the talk was the current connection-based model used by the telcos and the cable companies discourages innovation and use of broadband.
Wenger spoke at length at the connection between broadband and economic development, and said, "If you don't have a broadband strategy, you don't have an economic development strategy." He went on to show the connection between small business job growth and the potential for broadband to increase small business jobs in the community.
Wenger had some good case studies that led to his proposition that a focus on services is most likely to be successful. He advocated letting a particular service (like VoIP or video on demand) determine bandwidth needs and quality of service, and those two factors in turn determine price. A wholesale model encourages innovation and service growth, and revenues go up for the network owner (the community) with a service-based model. Wenger illustrated how revenues tend to go down using a connection-based model.
Submitted by acohill on Mon, 04/18/2005 - 14:27
Berge Ayvasian, a VP at the Yankee Group, a technology forecasting group, gave the morning keynote. Ayvasian had some interesting data: the Yankee Group projects that the number of households served by broadband will double over the next three years, from about 30 million to 60 million. Households served by community broadband projects are expected to grow by more than 600%, much faster than DSL growth (100%) or cable modem (75%). Cable is growing slowest because cable companies already have much of the market locked. up. Cable will still have at least twice as many household as DSL.
Ayvasian described the current duopoly problem correctly. The telcos and the cable companies that form the dupolopy in most communities believe they can make more money from existing customers, rather than by increasing the number of customers served. So they have little incentive to expand service coverage. But that businsess mode leaves communities at the mercy of the duopoly.
Ayvasian also mentioned a start up community effort in Fontana, California, where local leaders have declared, "Broadband is not an expense, it is an investment in the future." The Fontana project will use an open access, wholesale service model (the right approach).
Ayvasian also mentioned that other countries are moving fast. Ethiopia intends to have broadband available throughout the country by 2008, so I have a new slogan for communities: "Our town--almost as good as Ethiopia!"
In summary, Ayvasian proposed several principles that he said should drive broadband.
Submitted by acohill on Mon, 04/18/2005 - 07:34
I'll be blogging at the Digital Cities conference for the next couple of days (Monday and Tuesday). The meeting is being held in Reston, Virginia, near D.C., and promises to be a lively meeting. Stay tuned.
Submitted by acohill on Thu, 04/14/2005 - 08:05
Here is an excellent article [link no longer available] on how the telcos are strangling communities and denying them the economic development benefits that come from affordable broadband.
Some community broadband projects have now been around long enough for useful data to emerge. This article cites the St. Cloud, Florida effort, where local officials are saving residents and businesses millions of dollars on broadband. The officials there correctly note that that money, instead of being shipped out of the community and usually out of state, is now freed up and being put to work within St. Cloud--an enormous economic development benefit.
Here is the last paragraph of the article, which sums up the current situation:
These corporations say that they’re shutting down homegrown broadband efforts to safeguard the best interests of American free enterprise. But, as Dianah Neff, Philadelphia’s chief technology officer, asked in a recent column for ZDNet: “When was the last time they were elected to determine what is best for our communities? If they’re really concerned about what is important to all members of the community, why haven’t they built this type of network that meets community needs or approached a city to use their assets to build a high-speed, low-cost, ubiquitous network?”
Submitted by acohill on Tue, 04/12/2005 - 16:03
The Free Press has released three useful reports on broadband that ought to be required reading for any citizen's group trying to convince public officials and economic developers that something needs to be done.
Submitted by acohill on Sun, 04/03/2005 - 19:25
For a sobering look at the future, this article on South Korea is a wake-up for anyone who thinks the United States is technology savvy.
New technology does not get tested in the U.S. anymore; instead, software and hardware firms go to South Korea, where virtually every household and business has broadband, most cellphones also have data connections, and everyone is jacked in. Massive government spending on a national fiber grid has dramatically accelerated the use of broadband, and it's affordable throughout the country.
Granted, South Korea's small size gives it some advantages. But the mystery is why our elected and appointed officials seem content to do nothing or worse, hand the keys to the future of our communities over to a a few big companies determined to keep us well behind the rest of the world.
Submitted by acohill on Tue, 03/29/2005 - 09:42
Central California is the location of yet another pointless fight over broadband. Forward-thinking public officials are trying to do something good for their businesses and citizens, and a predictable set of knee-jerk reactions to it pop up.
Fresno County wants to look at increasing the number of broadband access and service providers by building infrastructure and letting private sector companies use it to deliver those services. But the predictable hysteria about how government should not be in the service business has ensued. Last time I checked, the *only* thing governments do is provide services, so I'm not sure that's a very strong argument.
As Lawrence Lessig noted recently, public street lights did not put electric companies out of business. And I will further note that building public roads did not put construction companies and delivery services out of business.
Fresno wants to build broadband roads so that private sector companies can use those roads to deliver access and services. Now there are two ways to pursue that model. Fresno is going to buy access and services from the private sector and resell them to broadband customers. Customers like this because you get a single bill with everything on it, and you have a single point of contact for service and support.
The other way to do it is to let companies sell direct to customers. In this model, you may have several bills (e.g. one for access, one for VoIP, one for email services, etc.). And you have several different companies to deal with in terms of service and support.
Both approaches have some advantages and disadvantages--the former model looks better from a customer perspective for billing and support. The nonprofit network operator makes more money to cover expenses and to build out the network. But it's a more complex way of doing business, since the nonprofit operator has to be the middleman for everything.
Submitted by acohill on Tue, 03/08/2005 - 06:46
According to most reports that I have seen, the Heartland Institute is an "astroturf" organization (the term refers to a group that has a hidden agenda--in other words, it's appearance is fake, like Astroturf).
I mention them because the Institute has been busy issuing reports saying that community broadband is bad for communities, and does so mostly by using scare tactics, suggesting that community investments "could" raise taxes, as one example. The problem is that there is no evidence that it does, and some data that suggests it lowers taxes because of increased economic development. That's what happened in Cedar Falls, Iowa. After they invested in fiber, they were able to lower taxes while nearby communities had to raise taxes.
Don't believe everything you read (even this column). The beauty of the Internet is that you have the option of doing your own research and developing your own sources of reliable information.
Submitted by acohill on Mon, 02/28/2005 - 13:22
There are many advantages to working out of the home, but snow days are not one of them.
Normally, the neighborhood cable network is reasonably responsive during the day, because kids and parents are at work. I can get done what I need to do without waiting.
But with six inches of snow on the ground and more falling, schools and many businesses are closed, and apparently many people have headed for the Internet, completely bogging down the cable modem service. It's very pokey, with long waits for simple things like loading a Web page.
And that's a perfect example of why cable and DSL, over the long term, simply don't have what it takes to deliver broadband. If one snow day makes my neighborhood broadband service slow to a crawl, imagine what will happen as more and more users get on and do more and more high bandwidth stuff like Voice over IP and IP television.
We're thirteenth in the world in terms of broadband cacpacity and deployment, behind places like Finland, Norway, and South Korea. And here is where I remind you of my favorite suggestion for a community economic development slogan: "Our town--almost as good as South Korea." It is a pretty sad situation when it comes to that, and it has.
Submitted by acohill on Sun, 02/20/2005 - 10:13
The New York Times (registration required) has a very biased article about Philadelphia's plan for citywide wireless broadband. The paper interviewed mainly opponents of the plan, and seemed to go to great lengths to interview those opponents, while trivializing successful community projects. Worth a read just to understand the anti-community sentiment out there.
It's unfortunate that the MSM (MainStream Media) is unwilling to make the effort to report both sides of the issue. I'm not arguing that the Times should be in favor of community technology projects, but rather that their reporting should strive to present both sides of the issue fairly.
Submitted by acohill on Fri, 02/18/2005 - 08:17
If you are interested in community broadband, you may want to take a look at the upcoming Digital Cities Expo, which will be in northern Virginia (Reston) in April.
The conference will have sessions covering the economic, legal, financial, technological, and infrastructure issues surrounding municipal broadband (Disclaimer: I'm one of the speakers).
Submitted by acohill on Thu, 02/03/2005 - 09:47
This CNet article says that businesses are realizing the value of dark fiber, and are willing to pay for it.
Here is the money quote:
"....Ford [Motor Company] found that it would cost less to lay its own optical fiber lines than to subscribe to a service from the local phone company."
Bingo. That's exactly right. As more and more businesses require more bandwidth beyond one or two T1 lines, the high prices from incumbents are tipping the tables in favor of community projects. Medium and large businesses in your community can become anchor tenants for a community digital transport system (aka duct, fiber, and wireless). Ford is building their own, but it would be cheaper for them to join a community project.
Good news? Not if your state is one of several that have anti-municipal legislation pending that will take the right of communities to decide their own future away from them.
This article shows how wrong-headed that legislation is. Let's see....our state will outlaw efforts to lower business costs, and force our biggest employers to buy overpriced services from near monopoly providers. That's a great Knowledge Economy strategy.
Get your legislators on the phone, invite them to lunch, and give them a copy of this article. It's a good first step.
Submitted by acohill on Tue, 01/25/2005 - 13:54
Here is an excerpt from a brochure about a project in Southside Virginia, a rural area that has traditionally relied on tobacco as a primary engine of its economy. Furniture and textile manufacturing were also mainstays for jobs and development, but over the past twenty years, all three have declined sharply.
The low cost of living, combined with the proximity to Greensboro and the North Carolina Research Triangle, may make Southside one of the best places to work in America, once this infrastructure is in place.
Also included as a service will be MSAPs in some locations, which create very high performance community intranets that support next generation multimedia services. The MSAP concept was pioneered by me while I was Director of the Blacksburg Electronic Village. Blacksburg has had an MSAP in operation since 1999, and Danville, Virginia also has an MSAP.
Note the emphasis on leasing capacity to "all interested providers," which includes incumbents, who, if they are smart, will realize they can lower their costs by leasing instead of overbuilding.
The Mid-Atlantic Broadband Cooperative (MBC), a non-profit cooperative with funding from the Economic Development Authority (EDA) and the Virginia Tobacco Commission (VTC), has contracted to deploy an advanced open-access wholesale broadband network in Southside Virginia. The RBI is a 700-mile fiber-optic network with 48 strands of dedicated fiber backbone, Synchronous Optical Network (SONET) architecture, dual rings with 13 OC-192 backbone sites and 65 satellite locations providing low speed & high speed interconnect facilities (OC-3, OC-12, OC-48, STS, VT). In addition to the turn-key implementation of the RBI, MBC has invested in building a new state of the art Network Operations Control Center (NOCC) in South Boston, Virginia.
The RBI network will connect four cities, 20 counties and 56 industrial parks providing access to nearly 700,000 citizens and more than 19,000 businesses throughout Southside Virginia. The goal of this project is to promote economic development opportunities for the region, attracting technologybased business and industry. Network construction begins in January 2005 and will be turned-up in phases. MBC plans to have the entire network fully operational by December 2006. MBC will be selling/leasing fiber and services on a wholesale basis to all interested providers.
Submitted by acohill on Tue, 01/25/2005 - 13:47
Northern Illinois, which is surprisingly rural in nature despite being a relatively easy drive to Chicago, has grabbed hold of the future. Below is a press release announcing an ambitious regional project to get affordable, high capacity broadband throughout that area. In announcing the effort, an official connected with the effort said, "The communication infrastructure we're talking about will be as important as electricity, water."
Northern Illinois Technology Triangle Unlocks New Opportunities for Northern Illinois Communities
Rochelle Municipal Utilities announces plans for a multi-gigabit capacity fiber optic ring to serve local rural communities
Rochelle, IL - Today, Rochelle Mayor Chet Olson unveiled plans for a superior fiber-optic telecommunications network labeled the Northern Illinois Technology Triangle (NITT). The network will provide multi-gigabit capacity to the Northern Illinois region, connecting communities across Northern Illinois and opening new opportunities for growth in education, research and business.
The NITT is a joint venture between Rochelle Municipal Utilities (RMU) and the Illinois Municipal Broadband Communications Association (IMBCA). It will provide a looped broadband fiber network in a triangle along I-88 from Rock Falls to Naperville, with a section north to St. Charles, and from St. Charles along I-90 to Rockford, and then along I-39 from Rockford to Rochelle. The physical infrastructure will be implemented in three parts. IMBCA has already leased existing fiber along I-88 from Naperville west to Rock Falls and is now negotiating leases for existing fiber on I-90. Rochelle Municipal Utilities plans on installing the remaining leg of the triangle, from Rochelle to Rockford, where no fiber exits. The NITT is the first municipal utility fiber optic network consortium in Illinois.
Chet Olson, Rochelle's Mayor, said, "We're pleased to play a part in bringing about the Northern Illinois Technology Triangle. NITT is the beginning of a new era, not only for Rochelle, but for all communities in this region that choose to access this network. For my community, it means an opportunity to expand our economic base from manufacturing and rail service to technology services and support." The network ring is based upon fiber optic cable and will offer 33 (or more) wavelengths, each with the capacity to carry data at a rate up to 40 Gigabits per second. With just one Gigabit connection, a family can download their favorite DVD movie in less than one (1) minute, something which would normally take 13 days to download using a telephone dial-up connection.
Submitted by acohill on Wed, 01/19/2005 - 21:04
The northern region of New Hamphsire is taking control of it's economic future by developing a technology master plan for the region, as reported by the AP.
One of the drivers of the project is the need to be competitive from an economic development perspective. Design Nine is providing the coordination and guidance for the effort.
Submitted by acohill on Sat, 01/15/2005 - 07:57
The City Council of St. Paul, Minnesota has approved a study to consider the feasibility of citywide wireless broadband.
The three month study will look for "the common good" that might be gained from community-managed telecom infrastructure. This is, as far as I know, the first time the common good has been explicity acknowledged in this kind of study. It has been implicitly part of many other community telecom projects, but it's about time we started this particular conversation in more earnest.
What has dominated the discussion so far has been the "unfairness" of community telecom projects, all viewed through the lens of monopoly telecom providers. Using that yardstick, community water systems are "unfair" because someone might want to build their own, private water system. Public sanitation would be "unfair" because someone might want to get into the sewer business. Our legislators and government officials need to start thinking more clearly about these issues.
Submitted by acohill on Tue, 01/11/2005 - 20:51
USA Today has an article about Lafayette, Louisiana, which has been trying to put together a community fiber project for the past year. The southern Louisiana community has apparently been beaten down by BellSouth, which has vigorously opposed the deal.
BellSouth has claimed it is "unfair" for communities to offer a service the company could offer, even though it provides only DSL in the community, a pale shadow of the robust fiber network the city was planning.
At the risk of boring my regular readers, there are two ways to approach community telecom projects. One is to regard telecom infrastructure just like roads. Communities build the roads, but private companies (like BellSouth) deliver services (like dialtone or TV programming) to customers. The other approach is to regard telecom infrastructure like the municipal water or electric system, in which the city itself provides the customer services.
The latter is certainly more efficient, but given that many of our elected leaders still don't take any of this very seriously and given that we have a ridiculously complex regulatory environment, I think the former approach (a public/private partnership) is the only alternative.
Rightly or wrongly, communities that are trying to create public monopolies in this area are losing. The telecoms are outspending them and are buying whatever laws are needed to prevent community investments. But communities must invest to stay viable in the global economy, and Lafayette knows that. From the article:
"The future of Lafayette shouldn't be left to the whim of the big telecommunications companies, insists City Parish President Joey Durel. Installing fiber-optic cable, he credibly argues, is no different from laying down sidewalks or sewer lines.
In fact, the "triple play" plan mirrors the action Lafayette's city fathers took a century ago when they realized the private power companies were passing them by in favor of larger, more lucrative markets in Baton Rouge and New Orleans. To survive, they built their own municipal power system.
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