Municipal Broadband 2.0Death of muni-broadband greatly exaggerated 10:57AM Wednesday Aug 27 2008 by Karl Bodetags: business · alternatives · municipalWhile it's true that many municipal fiber and wireless broadband projects have failed due to the incompetence of those deploying them, it's also true that there's a very broad coalition of industry interests lined up to ensure that these projects not only fail, but that they're properly maligned at every possible opportunity. Despite this, Telephony Online notes that municipal broadband lives on, largely because industry remains unwilling to fill the broadband coverage caps that created the concept in the first place. Anyone who thinks the municipal broadband market is headed south, however, needs to take a closer look. For every visible failure, there are multiple other cities, towns and villages either building or looking to build their own fiber-to-the-home (FTTH) networks, for the simple reason that they want broadband facilities they can't convince their local telco and cable incumbents to build. According to the article, recent failures have resulted in a new push, where projects are "more practically grounded in market realities," and municipalities are more interested in being ISPs instead of wholesalers. State laws (passed in 14 states) lobbied for by incumbent ISPs that either forced towns and cities to be wholesalers or banned them from offering service are also getting harder to pass, as bigger pocketed opponents (like Google) step into the ring. The discussion of a national broadband policy also means more people are paying attention to the nation's broadband coverage gaps. That in turn means more people are noticing the longstanding incumbent ISP hypocrisy of not wiring an area, then bringing out the lawyers when those areas attempt to wire themselves. Related:- Digital Wireless Canopy to Cover NJ City
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- Solar Wi-Fi Plan Ends In Lawsuit
- Free Wi-Fi In San Francisco Before Year's End
- NYC Wireless Network Tackles Both Roadkill and Terrorism
- Locals Try To Keep Utopia Afloat
- Powell, Wyoming: Population 5,500, Fiber Fed
- Lafayette Unveils FTTH Pricing
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 Shoreline Your Freedom Fries Are Stale
join:2003-09-29 Santa Clara, CA
| Bad/lack of service, lack of competition.. .. and federal government collusion with telcom companies have been a key point here in the Bay Area for the push to muni. Some areas already have it, but pretty soon, at very least, the entire Silicon Valley will be muni-fi'ed. Or maybe Google-fi'ed.
Can't wait to have muni options here. | |
|   TK Junk Mail Go ahead, make my day Premium join:2002-03-03 Margate City, NJ clubs:
·Comcast
| Retail municipal FTTH has 1 big failing - ......
........... the ability to tax and tax to bailout the system when the municipal system is losing money hand over fist. And that is why state laws passed preventing this. It isn't just incumbent ISPs doing this, but legislators distrustful of local taxing authorities.
A Utah state law, passed after those two fiber projects were in discussion, prohibits municipally owned networks from selling retail services.
“What happened in Utah is something we have been talking about for years — the state law that effectively prohibits retail service is, in my view, a very substantial part of what is wrong with the environment in Utah and particularly iProvo,” said Jim Baller, attorney with Baller & Herbst, which represents municipalities -- My BLOG .. .. Internet News .. .. My Web Page Ask yourself one question: 'Do I feel lucky?' Well, do ya punk? | |
|  |   delusion FTL
@algx.net
| Re: Retail municipal FTTH has 1 big failing - ...... This is somewhat a mis-approximation of what's happening with ftth in utah. Iprovo was owned and operated by the city of provo and had trouble breaking even. Utopia is different, it's a conglomerate of several cities that control the lines, but retail services are left to whatever corporations want to use the lines to compete. Currently there are about 3-4 providers (AT&T used to be one).
Where utopia shines is in the connections/cost. Residential fiber connections are 15/15 for ~40 and 50/50 for ~60 dollars a month. They do have caps but 500GB is pretty generous and you don't get kicked off for going over, but will have to pay for additional bandwidth.
Business connections can go up to 1gbit symmetrical.
Ping times in games to close networks are sub 15ms.
A business that has say a dual T1 (3mbit) connection that costs them around ~700-1000 dollars a month would save significantly by getting a 30/30 business connection (10 times the bandwidth) for around 150 a month. They could even keep the ancient T's as a backup if they are worried about SLA's and just enjoy the 10x bandwidth for the extra 150. | |
|  |   delusion FTL
@algx.net
| Let me put it another way.
As a business would you accept to saving ~6000 dollars a year in internet connection costs if your risk for future taxes went up ~3000 dollars a year?
As a consumer would you accept the potential risk of paying 100-200 more a year in taxes if you could get a 50/50 connection for the same or less than you are paying for currently? | |
|  |  nasadude
join:2001-10-05 Rockville, MD
·Comcast
| said by TK Junk Mail :........... the ability to tax and tax to bailout the system when the municipal system is losing money hand over fist. And that is why state laws passed preventing this. It isn't just incumbent ISPs doing this, but legislators distrustful of local taxing authorities. give me a frickin' break.
most of these "legislators distrustful of local taxing authorities" have either been told or paid (or both) to be distrustful by the incumbent phone or cable company.
that's where they get their information that makes them "distrustful". | |
|  |  karlmarx
join:2006-09-18 Nashua, NH
·Fairpoint Communic..
| Sort of like bailing out bear sterns now isn't it. Hmmmm.. government bailing out megacorp = good, government bailing out THE PEOPLE = bad? -- The happiest countries are the most secular. The struggle AGAINST corporations is the struggle FOR humanity! | |
|  |  |   TK Junk Mail Go ahead, make my day Premium join:2002-03-03 Margate City, NJ clubs:
·Comcast
| Re: Retail municipal FTTH has 1 big failing - ...... said by karlmarx :Sort of like bailing out bear sterns now isn't it. Hmmmm.. government bailing out megacorp = good, government bailing out THE PEOPLE = bad? Bailing out Bear Sterns bad too. Never approved of corporate bailouts. -- My BLOG .. .. Internet News .. .. My Web Page Ask yourself one question: 'Do I feel lucky?' Well, do ya punk? | |
|   Nightshade sic semper tyrannis Premium join:2002-05-26 Salem, OR
edit: August 27th, @05:10PM
| Market Failure If the industry is unwilling to fill in the demand, for whatever reason, and the supply is there, or vise versa it is called market failure. Many of these towns, especially Lafayette, have tried many times to convince the industry that the demand is there and when the industry is unwilling to do anything about it, then of course the citizens are going to fill in the demand somehow. Usually if the private sector doesn't do it then the government will.
I believe that the best way to get things done is with the private industry. However, if the private sector fails to step up to the plate capitalism has interesting ways to fulfill the demands of its economy. In this case the citizens will demand that the local government will step up to the plate and deliver, for good or ill.
I have no sympathy for any private company unwilling to satisfy the demands of people, especially when the people turn to other avenues to satisfy the demand the private company will use tactics to thwart the people using that avenue. As far as I am concerned the private company had their chance and blew it. If they are unwilling to get things done and take that opportunity to satisfy that demand then who will? -- True Happiness Must Come From Within | |
|  |   sirching
@savvis.net
| Re: Market Failure I believe that Minneapolis has an excellent model for its Muni wireless.
1)The City owns the fiber backbone 2)Private company USI Wireless owns/installs the wifi equip 3)City has signed contract to be anchor tenant, guaranteeing the private wifi company a base amount of revenue. 4)Wifi company offers consumers lower cost internet, at up to 3mbps. 5)Wifi company handles end-user support, minimizing the hassles the city has to deal with.
There have been some technical issues getting the bus worked out and signal coverage up, but its getting better and better. I dropped DSL and now get the same speed at $15/month less, and I can use it most places in the city, not just in my home. | |
|  axus
join:2001-06-18 Washington, DC
·Verizon Online DSL
·Cox HSI
| Wholesaling is more appropriate Government run businesses are a bad idea. I think it's good for them to build the infrastructure, get it going, and then sell access to it or sell the infrastructure with conditions attached. Ideally one company would run the wholesaling side, and ISPs would resell from them.
That said, there has to be something working that people can buy internet access from. Governments can do what they have to do to make high speed internet available, and get their own ISP up and running. Attract some competition for their ISP, then sell their ISP, then sell the wholesale part to someone who cannot be an ISP.
The best case scenario would be what Verizon promised to Pennsylvania, where a company builds the infrastructure and the state pays for it, but that showed how untrustworthy companies can be when they aren't held accountable. | |
|  |  hottboiinnc ME
join:2003-10-15 Toledo, OH
·buckeye cable
| Re: Wholesaling is more appropriate What about cities that own their own water department or power company? bad idea? if it wasnt for some of these towns they wouldnt have had power when they started them or the private water companies would be charging out the ass to just supply the residents with a meter. | |
|  |  |  MTU Premium join:2005-02-15 Santa Maria, CA
·AT&T Yahoo
| Re: Wholesaling is more appropriate Timely subject. Just received notice of third increase in 18 mos. in water rates from local PRIVATE water company. State PUC solicits comment but does not interfere. Researched to find that almost half of U.S. water companies are privately 'owned' by German and a French companies.
Of course, the original water systems were built by tax payers and then sold off by the minions of Milton Friedman currently in power.
Same with roads and bridges (built by taxpayers) being sold-off to corporations (most foreign owned). | |
|  |  |  |  EPS
join:2008-02-13 Hingham, MA
| Re: Wholesaling is more appropriate Very true- in my hometown, we have some of the highest water rates in the state (to the point where the state government has to subsidize ratepayers so it doesn't get ridiculous), and yet some of the lowest prices for power and electricity. (which aren't cheap anywhere in eastern MA, admittedly)
Who owns the water company? Aquarion, a subsidiary of the British utility Kelda Group. Who owns the power company? The town government.
Now, to be fair, we have very good water quality, some of the best I've seen. But so do areas served by the state-operated MWRA... Boston has been said to have the best water in the world (and they only had to flood three towns!) | |
|  |  |  |   Josh S
@adc.com
| Fun with accounting It's not just as simple as municipal broadband getting "bailed out" with tax money. Municipal broadband has two other claimed benefits that make that more complicated: 1) Property values of homes passed by fiber increase. Thus, in theory, those people will pay more property taxes, and 2) having good broadband availability makes for a better business environment, so more businesses will locate in the municipality - increasing jobs and tax revenue. Thus, even if municipal broadband does not pay for itself with subscriber fees, it still can be a break-even or better proposition.
The problem is that I don't see how you could ever account for those effects with a high level of accuracy. How can you say what fraction of economic growth or increase in property values is due to broadband? So I guess in the end I declare myself to be a die-hard neutral on this topic. You just have to look at it case-by-case to see if it makes sense, and even then, what do you look at? | |
|  |   a333 A hot cup of integrals please
join:2007-06-12 Corona, NY
·Verizon Online DSL
| Re: Fun with accounting I personally think government's shouldn't be solely funding FTTH or any kind of i-net for that matter. And in any case, they don't need to do so either, if they can quit cuddling up to the telecom lobbyists. The gov't blew its chance back in the mid-90's, when telcos were busy screwing around with CLEC's. Had the teleco act actually been enforced, we would've had some real competition, the way they have in France. France's FTTH ain't paid-for by their gov't, but yet, CLEC's like Free.fr were the ones to start it. years before the baby bells over here were even CONSIDERING FTTH. Clearly shows what actual enforcement of telecom laws can do. | |
|  |  |  EPS
join:2008-02-13 Hingham, MA
| Re: Fun with accounting I think a "real" competition only would work when all providers own their own networks, honestly... otherwise everyone is beholden to the ILEC, which sort-of works in some places and not really in others.
Personally, I think one thing that could have fostered competition would have been to force the separation of landline and wireless companies- independent wireless companies would have incentive to compete against the landlines for internet access once the technologies matured to that point.
Of course, then again, the independent wireless carriers currently (T-Mobile, Sprint) have never seemed to interested in stealing landline internet customers, so maybe my proposal wouldn't do anything at all except wipe out VZ and T's stock prices (and I own stock in VZ, so that would be bad) | |
|   CNWedit
@sbcglobal.net
| Municipalities funding fiber There are creative ways for municipalities to fund fiber networks without putting their taxpayers at risk. Most cities/towns use general obligation bonds, that use the revenue generated by selling services on the network to pay off the debt. In the early years, this is a big tough because the more popular the service is, the more money is spent to connect customers, making the fiber network look much less successful that it actually is.
Networks that survive this early period can flourish because the revenue keeps coming in and the capital expense is a one-time thing. | |
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