February 28, 2011 By Craig Settles
Every year in North Carolina, at least a few members of the state Legislature introduce a bill that would crush community broadband networks in favor of large telecom and cable companies.
One way they attempt this is by asserting that all community networks fail. Truth is, of the more than 80 community networks in the U.S., only a few have closed down. You’ll read about many of those successes in this column.
Time Warner’s allies in the Legislature recently introduced the most sweeping and intrusive anti-municipal network bill in quite some time. The extent to which it inhibits and micromanages communities’ efforts to bring constituents broadband when incumbents won’t essentially strips communities of their freedom to choose and make decisions in their best economic interests.
Incumbents actually use two arguments to support their stance, not just in North Carolina but in other states too. Ironically it’s impossible for both to be true, and in fact both are false claims. If you plan to pursue broadband, even through public-private partnerships, expect to hear both and be prepared to neutralize them.
Untruth No. 1 is that community networks will compete unfairly with incumbents and put them out of business (Time Warner’s lead argument this year). Untruth No. 2 is that all community networks fail because governments and/or public utilities are incompetent to run these networks. Think about it for a minute: It’s extremely unlikely that you can be incompetent and put a billion dollar company out of business.
If community networks’ track record is approximately 78 wins and two losses, they are hardly facing impossible odds of success. Sure, some networks stumble along the way. But no incumbent to my knowledge has gone out of business because of municipal networks. In fact, a common reason community networks stumble is because of the unfair obstacles incumbents throw in their way. Yet communities work past them and move on.
Here are a few brief profiles from those “winning” networks. These efforts are insightful and inspirational. They show the paths by which communities can make better broadband a reality.
Wilson, N.C., (population 51,000) got no love from Time Warner for its broadband dreams, so the city put together a plan, secured bond financing, put itself on a 12-year payback plan and built the Greenlight fiber network. Greenlight offers gigabit speeds to businesses. The city is significantly ahead of schedule on securing subscription rates that will enable it to pay back its debt.
Salisbury, N.C., spent nearly five years planning its Fibrant fiber network. The network launched in December and is generating customers. I was there a few weeks ago meeting with the mayor, council members and stakeholders. They’re bullish on future prospects. Also in the state, Asheville’s Mountain Area Information Network (M@IN) is a nonprofit created in 1996 by local businesses to run dial-up services when no incumbent would service the community. In 2003, M@IN began building a fiber network that was key to retaining and attracting several businesses and research facilities responsible for a significant number of quality jobs.
Elsewhere, Santa Monica, Calif., (population 88,000) is a success story among city-owned networks. The city’s IT staff designed, self-financed, built and marketed a fiber network that generated $2.5 million in surplus capital. In 2004, the city generated $750,000 in initial financing through savings by replacing its antiquated voice and data communications system with city-owned dark fiber. This financed the expansion of fiber through the city to replace old infrastructure. Then Santa Monica started selling services to businesses that Verizon wasn’t providing, which generated more capital for the city that went for more fiber. With this leapfrog approach, a citywide network has been built that’s capable of delivering gigabit speeds. Citywide wireless in Santa Monica may be added one day.
On a smaller scale, Keene, N.Y., recently completed a $400,000 broadband network that local residents and businesses paid the local telco to build. About 90 percent of the community is covered. The small telco was struggling and didn’t have the wherewithal to upgrade its network to fiber, so the community passed the hat. Many towns may not want to follow this path, but it’s worth exploring.
Not all community networks are fiber. Cambria County, Pa., put together a business plan for a 693-square-mile wireless network. The county raised $10 million through conventional bank financing. Of course, this occurred in 2008 when money was easier to get. But a thorough needs assessment might uncover potential financing options for when the economic recovery picks up speed.
Riverside, Calif., a midsize urban city of about 330,000 people, built its wireless network to provide 1 Mbps service to constituents and city workers. The city has aggressively tackled the digital divide with a range of programs targeted to disadvantaged youth, unemployed adults and the elderly — while encouraging all constituents to participate in various initiatives to spur innovation. This year the Intelligent Community Forum named Riverside to its Top 7 Intelligent Communities of the Year.
Public utilities also contribute their share to the winner’s circle. Tiny Reedsburg, Wis., (population 8,000) couldn’t draw the attention of incumbents, so the Reedsburg Utility Commission decided to build its own broadband while it already was upgrading its electrical infrastructure. Fiber network service launched in 2003. As is typical in these scenarios, as soon as the network went live, the local incumbent cable company fell all over itself offering services. The utility commission avoids price wars by relying on extensive “we are the community” marketing that’s enabled it to prosper.
Lastly, the network that does the most to totally obliterate the myth of public-sector network failures is Chattanooga, Tenn.’s public utility network, called EPB. The utility launched a gigabit network that’s widely acclaimed. Every month it seems the network announces new services and capabilities, and is not the least bit shy about generating nationwide publicity. Chattanooga was also named to the 2011 Top 7 Intelligent Communities of the Year list.
There are dozens more community networks that represent a range of business models, technologies, financing options, goals and successes. They are inspirations, role models and possibly collaborators. Communities need to come together to stand behind — and beside — North Carolina communities as they fight legislation that aims to quash their community networks. At the same time, communities should move their own plans forward. If you want better broadband, it’s up to you to get it.
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