Municipal Networks

This election season, Comcast is once again devoting funds to an investment it considers necessary - influencing elections in Seattle (WA) and Fort Collins (CO).  In Seattle, Comcast and CenturyLink have donated $50,000 to a political action committee that supports a candidate opposed to publicly owned Internet infrastructure. In our analysis, we’ve run a range of possible scenarios and offered both a conservative Comcast loss estimate and figures based on higher loss of subscribership.

A freshman Michigan state representative introduced a sweeping bill last week that would ban any city and town in the state from using public funds to provide municipal broadband service — publicly owned internet infrastructure. A review of state campaign finance and lobbying records found that the representative’s campaign was heavily financed by telecommunications companies and trade associations. She also dined with trade association lobbyists in the months leading up to introducing the bill.

MI state Rep Michele Hoitenga, who is chair of the Michigan House's Communications and Technology Committee, introduced the bill, HB 5099, on October 12. The bill says that a city or town “shall not use any federal, state, or local funds or loans to pay for the cost of providing qualified internet service,” effectively banning municipal broadband outright. Campaign finance records show that two of her largest campaign contributors are AT&T Michigan and the Telecommunications Association of Michigan (TAM): AT&T gave her campaign $1,500 while TAM provided her with $3,500 — large amounts for a first term state representative. The Michigan Cable Telecommunications Association — a separate entity from TAM — gave Hoitenga’s campaign $1,000.

[Commentary] In the interest of openness and transparency, the Kentucky Communications Network Authority (KCNA) would like to address some statements about KentuckyWired that have appeared in the public forum lately. KCNA would like Kentucky’s citizens to be properly informed.

KentuckyWired will be helping private industry. KentuckyWired is building a “Middle Mile” network — the primary purpose of which is to give broadband service to state agencies. The network will also be the middle mile between the global internet and any company or organization leasing access to the network’s extra capacity. KentuckyWired will be an ultra-high-speed, high-capacity network to which the private internet service providers (ISPs) can connect. Think of it like a major highway with exit ramps into every county. KentuckyWired is not competing with ISPs so much as facilitating them and making it easier for them to reach places where they previously could not, or would not, go.

[Phillip Brown is the director of KCNA]

In Fort Collins (CO)—a town of about 150,000 north of Denver—Big Telecom has contributed more than $200,000 to a campaign opposing a ballot measure to simply consider a city-run broadband network. It's the latest example of how far Big Telecom is willing to go to prevent communities from building their own internet and competing with the status quo.

"It's been wild," said Glen Akins, a Fort Collins advocate for municipal broadband. "We're overwhelmed by the amount of money the opposition is spending." When the residents of Fort Collins vote on November 7 they'll have a couple of ballot measures to consider, including one on city-run internet. If that measure is approved, Fort Collins will be able to change the city charter to allow it to run a municipal broadband utility. This doesn't mean it will happen for sure, and the city still hasn't finalized what that utility would look like, but it opens the door to further discussions.

A state lawmaker in Michigan wants to prevent cities and towns from using any government funding to provide Internet service. Michigan state Rep Michele Hoitenga (R-Manton) submitted a bill that says cities and towns "shall not use any federal, state, or local funds or loans to pay for the cost of providing qualified Internet service." State Rep Hoitenga's bill does say that a city or town "may enter into an agreement with one or more private parties to provide qualified Internet service," as long as no government funds are used. Even with that exception, the bill could discourage cities and towns from pursuing public-private partnerships, according to an analysis by the Institute for Local Self-Reliance's Community Broadband Networks project.

Many of the power cooperatives that helped electrify rural Tennessee in the 1930s and 1940s are gearing up for a similar effort to bring high-speed broadband to rural areas not connected to today's information superhighway. But similar to electrification of the South in the early 20th century, the telecommunications upgrades for rural broadband are likely to be costly and take years or even decades to fully implement.

"We know that in rural America there is a lack of broadband and that is holding back many communities and residents from fully engaging in today's economy," Jim Matheson, CEO of the National Rural Electric Cooperative Association (NRECA), said. "It's just like electricity in the 1930s. The economics make more sense in the densely populated areas and it's far more challenging to serve sparsely populated areas with capital-intensive services." But Matheson and Tennessee power co-op leaders insist membership-owned cooperatives are well suited for the challenge, even if they are likely to need government help and subsidies to bring broadband everywhere

[Commentary] Public-private partnerships, or PPPs, are a popular way to build community broadband networks. These networks typically are the result of local government entities finding ways to partner with private companies. But what if communities “think differently” about how to form PPPs?

Ammon (ID) (pop. 13,800) today celebrates its success at thinking differently to produce a city-owned gig network. The city built the network with no debt and got an impressive 70% of the potential customers to sign up for service. One key is new technology. The other is that the “private” in this PPP structure is citizens themselves.

[Craig Settles is a broadband industry analyst, consultant, and author of “Building the Gigabit City.”]

Kentucky's plan to build one of the country's largest publicly owned broadband networks was touted as a cornerstone of the effort to save the Appalachian economy by bringing high-speed internet to some of the poorest counties in America. It was supposed to take a year to finish, but three years later only a fraction of the 3,000 mile network of fiber optic cables known as Kentucky Wired has been built.

Construction has been plagued by delays, forcing the state to pay $7 million in penalties to its private-sector partners with the potential of "tens of millions" more. State officials had been counting on public schools and libraries to help pay some of the bills but that plan has fallen through, and project officials plan to ask state lawmakers for millions of dollars in taxpayer money to make up the difference. Now, some of the state's most influential lawmakers want to pull the plug, and have asked project leaders how much that would cost.

Google failed to deploy gigabit internet and video service to parts of the Kansas City metro area in the timeframe it promised. The Kansas Corporation Commission confirmed that Google missed deadlines to bring service throughout four Kansas cities — Mission Hills, Westwood, Westwood Hills and Kansas City. Google said in 2012 that it planned to bring service throughout those cities within five years.

The Kansas City Star has taken its watchdog role quite seriously with regard to Google Fiber. The report about the Google missed deadlines was followed a few days later by an editorial from the Star’s editorial board questioning the benefits Google Fiber had brought to the Kansas City area. The editorial noted, for example, that Google’s commitment to install free high-speed internet service for non-profits in the area is expected to end by January, even though 40 non-profits have not yet been connected. According to the editorial, Google Fiber “has changed Kansas City but hasn’t transformed it.” This attitude is quite different from what Telecompetitor experienced in another gigabit city — Chattanooga, where local utility EPB was the first U.S. network operator to undertake a citywide gigabit rollout and where local supporters helped leverage the gigabit rollout to attract numerous high-tech companies to the community, bringing new jobs and generally helping to revitalize the community.

More and more rural electric cooperatives are learning that their existing distribution networks can lend themselves to highly efficient deployment of broadband for their member-owners. Based on the distances that define rural America, one of the surest ways to effectively build a broadband network is to use an existing electric co-op infrastructure. Many co-ops have found that building out a broadband network is a productive way to serve customers, and can actually be profitable as well. But the challenges they face are numerous, and every build-out brings a new set of circumstances. With that in mind, CoBank interviewed leaders from six co-ops that have launched successful broadband initiatives in order to find out what works – and what doesn’t.