Submitted by acohill on Wed, 01/27/2010 - 16:35
I receive a lot of inquiries asking for help understanding open access. The broadband stimulus funding has raised awareness of this business model, and I have written a short paper explaining how it works and why. The PDF is attached to this article, or you can visit the Design Nine Web site to download it.
Submitted by acohill on Thu, 01/21/2010 - 10:19
A story in the Financial Times (registration may be required) suggests investments in broadband are peaking. The article is a little misleading, because it suggests that this is a sign of "maturation." Maybe. Maybe not.
Broadband investments are peaking because cable and telephone companies have spent a lot over the past decade upgrading their antiquated copper-based infrastructure, and in their view, there is not a lot left to do. Yes, fiber to the home deployments continue to grow, but large parts of the U.S. have been redlined by the incumbents as "too expensive" for fiber. So most of this investment has been focused on what the FCC calls "little broadband," not "big broadband." Big broadband requires fiber.
Small and medium-sized businesses stuck on DSL are already calling it "tomorrow's dial up" (an exact quote from an angry business person in West Virginia). To attract jobs and businesses, communities will have to make basic broadband infrastructure investments in "big broadband."
Submitted by acohill on Fri, 01/15/2010 - 08:25
I have added the Benton Foundation to the blogroll on the right. Benton has been posting some very useful items on community broadband and municipal broadband projects.
Submitted by acohill on Tue, 01/12/2010 - 07:40
Hong Kong Broadband Network Ltd. is offering 100 megabit symmetric connections to its customers for $13/month. Costs are going to be lower for them because most of the customer base is living in high rise apartment buildings, which are less expensive to cable. I don't know about Hong Kong, but in Japan, the building codes require telecom duct to every apartment from the ground floor, meaning it takes under an hour to run fiber to a new customer in a Tokyo apartment. Meanwhile, in the United States, many of us are still getting our broadband via copper cable technology invented in the late 1800s.
Submitted by acohill on Thu, 01/07/2010 - 10:06
Chris Mitchell of the Institute for Local Self-Reliance has an excellent article on municipal and community broadband at Ars Technica. Mitchell discusses some of the positive outcomes from the Lafayette, Louisiana municipal network, where you can get a 50 megabit symmetrical Internet access connection for just $58/month--which would qualify it for the lowest prices in the country. A ten megabit symmetric connection is just $29/month, which is also probably the lowest price in the country for that level of service.
It is the symmetric service that is so important. Many incumbent providers will tout services "up to 50 megabits" without noting that the service is asymmetric, meaning you may have 50 megabits downstream but as little as 2-5 megabits upstream, and that both the upstream and downstream bandwidth gets shared with a bunch of your neighbors (often 25 to 50 of your neighbors).
Why is symmetric bandwidth important? It enables work from home job opportunities and enables running a business from home. The availability of symmetric bandwidth is an economic development and jobs issue. A community that does not have symmetric broadband services is cutting off jobs and business growth.
Finally, while the article highlights the positive impact in Lafayette from the municipal network, it is important to note that there are other business models for muni networks that do not involve getting local government to sell services in direct competition with private providers. The open access, open services model being pursued by local governments in Virginia and Utah are doing extremely well, although you don't hear much about them because there is tremendous pressure from incumbents and lobbyists to not talk about them--they don't want to have to tell legislators there is a "third way" that provides an appropriate role for government but keeps local governments out of direct competition. nDanville, The Wired Road, and Utopia are all doing extremely well.
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Submitted by acohill on Mon, 01/04/2010 - 10:03
Via MuniNetworks, a link to a podcast that describes how Orem City, Utah is benefiting from the open access, open services, community-owned Utopia network. Local governments in Virginia that have invested in open access, open services networks are also benefiting in the same way. A community broadband network, with infrastructure owned by the community but services offered by the private sector, aggregates demand across the entire community, which leads to increased competition among private sector providers, does not compete with incumbents, and when done right, creates sharp drops in the cost of telecom services. The Wired Road network, in rural and mountainous southwest Virginia, is seeing price drops of 40% to 70% on the cost of Internet access for government and institutional customers.
Submitted by acohill on Mon, 11/23/2009 - 09:30
Jeff Daily at App Rising reports that Utopia, the big community-owned fiber project in Utah, is having substantial success getting homeowners to pay for the fiber coming to their homes--to the tune of $3,000 per home. This may sound like a lot of money, but the market value of a residential home with fiber increases by $5,000 to $7,000, according to a Render study.
Homeowners routinely spend $5,000 or $10,000 or more on home renovations like kitchen makeovers and bathroom upgrades, and they rarely see even a 1 for 1 return on the investment. Brigham City, Utah is also building fiber to the home, and they are using a model I have long advocated--a pass by and tap fee. Brigham City has created a special assessment area and is charging property owners a fair portion of the fiber network, just as cities and counties do routinely with water and sewer pass by and tap fees. As citizens and businesses begin to read about the advantages of community-owned fiber (lower prices, more choice), it will become easier for these projects to start with user-based financing from day one.
Submitted by acohill on Tue, 10/20/2009 - 09:42
The Bill and Melinda Gates Foundation has proposed to the FCC that $5 to $10 billion be spent getting fiber to anchor institutions like schools, libraries, and health care facilities in communities. It's a worthy idea, but as policy, the unintended negative impact will be to make it more difficult to get fiber to homes and businesses in those communities.
The Gates plan is dis-aggregation of demand, and what we want is aggregation of demand. The Gates Foundation will take the biggest spenders for broadband in a community and remove them from the buying pool. When this happens, costs for everyone else go up, or don't go down.
What very few people and policymakers understand is that true community broadband networks are very different from the command and control institutional networks that have been the mainstay of telecom for the past forty years. Policymakers in Washington and groups like the Gates Foundation are talking to senior telecom folks with no experience designing and managing community broadband networks that have a goal of getting everyone connected. When you talk to someone who has been building centralized, top down, single provider networks for thirty years, guess what you get? You get another centralized, top down, single provider network.
It really isn't a technology issue, it is a business model issue. Command and control, centralized networks (think the phone company, the cable company, any wide area institutional network) have a business model that does not work--if those models worked, we'd all have fast fiber connections today. So the Gates Foundation, with the best of intentions, certainly, is proposing something that will be an economic catastrophe for communities, businesses, and economic development.
Submitted by acohill on Mon, 10/19/2009 - 07:35
The Design Nine-designed open access network nDanville has been selected by the Intelligent Community Forum as one of the Smart21 communities for 2010. This international award looks not only at technology but how communities integrate technology into their community and economic development plans. Danville, Virginia's nDanville network was the first municipal open access, open services network in the United States, and has been connecting business customers since 2007. The community has successfully attracted new businesses and jobs because of the high performance network, including a $400 million data center that will be placed in what was formerly one of the largest textile mills in the country (the mill closed years ago with the loss of thousands of jobs).
The City of Danville Utilities Department took the lead in the effort, and has installed more than 100 miles of fiber throughout the City, and has taken fiber to every single business park and every single lot in each park, and has run fiber in the downtown area, including the historic Tobacco Warehouse District, which has fiber to renovated tobacco warehouse commercial buildings, apartments, and condos.
All services on the nDanville network are provided by private sector service providers, and businesses have a choice of 100 megabit Layer 3 service-oriented connections and Gigabit point to point connections.
Submitted by acohill on Fri, 10/09/2009 - 09:10
Ski season is right around the corner in New England, and I just spent three days working with a group of communities in a very rural part of New England on broadband issues. Like many rural communities, large portions of this region are both unserved (still on dial up) and underserved (poor quality DSL or cable modem). Complicating the problem is a telephone infrastructure that is in poor condition, meaning erratic DSL service and extremely slow dial up.
I kept meeting people that were trying to work part time or full time from home, but were extremely frustrated because they either had only dial up at home or very slow DSL. Cable service was available in only a few small areas because of the rural nature of the region. What it means, practically, is that the incumbent telecom companies are controlling growth and land use in the region, not the local governments. I heard story after story about business location decisions made entirely on the basis of where there was broadband availability. While many of the stories were from professional people, including a software developer, a real estate property manager, and a financial consultant, the most interesting story came from a custom cabinet maker, who had located his business in a downtown retail area because it was the only place where there was broadband service.
You might wonder why a woodworker needs broadband, but this craftsman designs all his work on the computer and sends the finished drawings to a firm with computerized cutting machines that cuts all the various parts and pieces of the cabinets out and ships them back to the cabinetmaker for assembly and installation. You can't exchange CAD drawings over dial up. And even cable and DSL are barely adequate; for this kind of engineering design work, you need symmetric bandwidth so that you can upload the drawings.
Local leaders need help understanding that zoning, land use, energy conservation, and business growth are increasingly out of their control because the telecom companies (and where they offer broadband) are driving all these decisions.
Submitted by acohill on Thu, 09/17/2009 - 08:32
Powell, Wyoming's community-owned citywide fiber network is up and running, and the town is starting to get phone calls from businesses interested in taking advantage of the affordable broadband and the fact that every home has a high performance fiber connection.
Powell community leaders report a Denver firm is visiting to discuss bringing 100 work from home jobs to the community. Here is the money quote:
"The citywide fiber optic network absolutely drove the decision...."
Submitted by acohill on Thu, 09/10/2009 - 08:45
Chris Mitchell at MuniNetworks has a great piece on the dilemma faced by the FCC, which is tasked with coming up with a national plan for broadband. The FCC has to balance the interests of the incumbent telephone and cable providers with the needs of the public. And the "public" includes an increasing number of home-based workers and businesses for whom the current "little broadband" services are grossly inadequate.
Heavy-handed Federal regulation is not likely to fix the problem. Making it easier for localities to invest in basic telecom infrastructure and operate it as an open access broadband digital road system is a third way. Open access broadband provides a graceful path for incumbents to slowly migrate from their antiquated copper-based systems to high performance fiber and wireless networks without going broke. And the open access approach keeps local governments out of the telecom and broadband service business--leaving it to the private sector, where it belongs.
Mitchell puts his finger directly on the problem, which is the incumbents have been reluctant to change their business models. So their advice to the FCC is to change little or nothing, because that is the path of least work for them. But it does nothing to make American businesses and American workers more competitive in the global economy. Other countries are investing heavily in fiber to the premise, while the U.S. tries to prop up fifty year old copper technology.
But open access provides enough that the FCC, communities, and incumbent providers ought to all be able to agree to at least remove the current regulatory stumbling blocks to this alternative.
Submitted by acohill on Fri, 08/28/2009 - 08:21
This story says that software for the Apple iPhone and iPod Touch has grown to $2.5 billion. This is a market that did not exist just two years ago. What the article does not mention is that most of the programmers writing and selling software for the iPhone are working from home, and many of those businesses are making hundreds of thousands of dollars per year.
This is where broadband becomes important. These home-based software businesses have to have reliable, high performance broadband connections--to coordinate activities with other programmers and co-workers also working with home, to upload and download software, and to access online business services (e.g. accounting, printing, etc.) that enables these work from businesses.
Economic developers: What is your strategy for attracting these new home-based businesses? Are you working with local builders and developers to ensure that "Internet ready" homes are available? Are you supporting a regional effort to improve access and affordability of broadband? Do you have a virtual business incubator that is designed to help home-based entrepreneurs grow successfully?
Communities that market their quality of life, their recreational resources, and that have open access broadband have a recipe for growth.
Submitted by acohill on Fri, 08/21/2009 - 12:40
Here is an interesting article about a study of current "cloud" computing services, which "seem to come up short. This really should not be a surprise. Businesses that think cloud computing services are going to be a panacea for their IT problems are going to be very disappointed.
First, cloud computing is just the latest IT industry buzz phrase, and is the latest in what is now a forty year history of selling old wine in new bottles. In this case, we are talking about very old wine indeed. Cloud computing is just the mainframe. And the mainframe was redefined in the early eighties as the mini-computer. And the mini-computer was redefined in the early nineties as client-server computing. And client-server computing became Web applications. And Web applications became Web 2.0. And Web 2.0 became cloud computing.
But all of those buzz phrases were and still are architecturally quite similar. The user is connected at a distance to a central repository of data. However, as the distances between the user and the data have grown, network latency, or how long it takes data to travel across the network between user and repository, has become a big problem. The Internet offers virtually no control over latency, for a whole variety of reasons, including the fact that the Internet was never, in its original design, intended for real-time transaction-based processing (cloud computing).
The answer is robust local, high performance open access broadband networks, which allow two things to happen--you can move the cloud closer to the user, and you can control and limit latency. Distributed cloud computing improves performance and reduces or eliminates the single point of failure that is being designed into some cloud environments. Apple, for example, is building a giant data center in North Carolina. But what happens if that facility loses power in a major storm? Apple and other cloud competitors like Amazon and Google do create redundant data centers, but a few massive data centers can't solve the latency problem the way putting cloud servers on local open access networks can.
Submitted by acohill on Fri, 08/14/2009 - 13:57
This Scientific American article discusses something I and others have been saying for years--the 100 year old electric grid we use for residential and business power was not designed for electric cars, which have extremely high amperage power draws. It is not so much that the grid can't handle one or two electric cars in a neighborhood; it can, and the load is not much different than things like welders or potter's kilns. But the grid was not designed for say 35% of residential homes plugging in their electric cars every evening at 5:30, at the very same time that residential electric use already peaks.
Part of the solution is broadband. Resilient, reliable fiber broadband connections to every home will enable electric providers to talk to home power controllers. The home power controllers will have enough smarts to turn the car charging on and off at the direction of the power company so that the load is balanced throughout the night, when electricity costs the least to generate.
That's right--broadband is part of the energy independence solution.
Submitted by acohill on Wed, 07/29/2009 - 14:27
A submarine cable serving several African countries has been damaged. The cable is the only Internet route out of several west African nations, putting the entire country into a virtual Internet blackout, with slow, expensive satellite links the only way for data to move in and out of the countries. Here in the U.S., some counties and states are bigger than these countries, and route diversity is now a serious issue for relocating businesses.
Submitted by acohill on Tue, 07/07/2009 - 10:44
The NOFA (Notice of Funds Availability) for broadband stimulus funding was released last week; the document defines how to apply for those funds, and both private sector companies and communities can apply. On page 66, beginning at line 1470, the NOFA does something very important: it provides an explicit preference for networks that offer open access services (or open services) to end users. Here is the exact statement:
Reviewers will also consider whether the application proposes to construct infrastructure and implement a business plan which would allow more than one provider to serve end users in the proposal funded service area.
This means networks that offer competitive pricing from more than one provider get preference--this is huge, and could have important long term consequences.
The rules also do something else quite important on the same page (page 66, line 1463), where there is explicit preference for open access transport, which in telecom jargon is "interconnection." The rules say that companies that post their interconnection fees publicly and agree to nondiscrimination will get preference.
Why is the interconnection clause important? I have specific knowledge of one phone company that offered the exact same circuit/service to a community project at FIVE TIMES the fee they charge to other telcos. That is discriminatory pricing, and it is done to discourage competition and to keep community projects out of the "club."
When the dust settles on the broadband stimulus funding in a couple of years, these two little items buried on page 66 may turn out to be the most important part of the whole effort.
Submitted by acohill on Mon, 06/08/2009 - 16:38
I sat through a presentation by an electric utility on their BPL (Broadband Over Powerline) offering. The company is committed to being able to provide broadband connectivity to their rural customer base, which is terrific. They should be commended. But the service starts at 256 kilobits for $30 and ends at 3 megabits for $90. The system requires that the electric company install repeaters at least every 3500 feet, or about every half mile, throughout the entire service area--active electronics spaced more closely than DSL (another copper-based technology). And fiber signals can be transmitted tens of miles before needing repeaters. The firm has been testing the system for more than two years and is still not ready to offer it because it is susceptible to noise, which reduces the available bandwidth (fiber has no noise or interference issues). The representative called the system "very complex," and said, "...it looks simple, but it is very complicated, as we are finding out." What may save the experiment is that the firm intends to roll out smart grid energy conservation and meter reading services, and the savings there may help pay for the equipment and maintenance. But the local region will still have "little broadband" compared to other rural areas rolling out fiber (which also supports smart grid uses).
Submitted by acohill on Sun, 05/24/2009 - 11:01
Here is a story about the state of North Carolina trying to entice Apple to place a 100 job server farm in the state. With unemployment in North Carolina nudging 11%, state officials are smart to try to attract Knowledge Economy businesses, and server farms are a growth industry. The massive amounts of data being stored "online" have to reside in a physical place, and the companies that are making a business out of this (e.g. Apple, Microsoft, Google, Amazon, and many smaller firms) have several requirements.
They have to spread these data centers out for security reasons--fires, floods, and terrorism can happen almost anywhere, so no reputable firm wants to store all its data in one place. So they have multiple data centers, each storing complete copies of all the data. Second, spreading the centers out helps speed data to and from its destination. Different data centers will deliver data to customers based on customer location.
When picking sites for these server farms, these companies are, of course, looking for tax benefits, but your community won't get on the short list unless you have local fiber, good fiber routes out to major Internet switchpoints, and reliable electric power.
All things that are relatively easy to get started on if you want businesses of the future.
Submitted by acohill on Tue, 05/05/2009 - 07:54
From the good folks in Wilson, NC, an excerpt from a letter that fiber equipment manufacturer Alcatel wrote in support of the right of communities to improve broadband services. Good for Alcatel. In part, it is probably a business decision, which makes it even more interesting--the company must know that municipal broadband efforts are good business.
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