Defining down the definition of internet ‘service’ will hurt rural economy

As was once the case with phone service, a strong standard should be enforced for internet.

By Rob Souza, CEO of OTT Communications

Published by the Portland Press Herald, Maine Voices, Oct. 12, 2017

NEW GLOUCESTER — We are writing to further the discussion and support the opinion of the Portland Press Herald Editorial Board (Oct. 2) regarding the Federal Communications Commission and that panel’s proposal to redefine the minimum internet service level. We agree that if the FCC redefines downward “adequate” service, rural Americans will lose out and be left further behind economically, educationally and in terms of quality of life.

In the late 1800s, at the dawn of the telephone industry, the larger established telephone companies couldn’t make a viable business case to serve low-density rural areas, so they didn’t. Understanding the importance of communication to their enterprises, local farmers and businessmen leveraged their personal resources to build their own rural phone networks. All of the Otelco/OTT Communications companies originated that way.

oday is no different: Instead of phone service to rural areas, it’s internet via fiber to the premises that we struggle to deliver to those rural communities. If you listen to the FCC, you might think that other technologies like mobile wireless could serve in place of fiber optics. To a degree, they can – if the definition of “served” is reduced.

The current FCC standard is a download speed of 25 megabits per second and an upload speed of 3 Mbps. Mobile signals can theoretically reach those speeds – assuming there’s a mobile carrier that has infrastructure in these rural areas capable of delivering high-speed service – and therein lies the problem. As the Press Herald editorial noted, Verizon is abandoning thousands of rural customers around the country, including hundreds in Maine, because they claim it is too costly to provide service in rural areas.

If legacy phone companies like ours – or, for that matter, the FCC – were allowed to arbitrarily reduce the standard of service we deliver, where might those costly-to-serve rural residents be today? From our perspective, the combination of our dedication to the communities we serve, FCC oversight and the Universal Service Fund (which was created to ensure that all Americans have access to a basic phone line) has kept rural America from falling behind in communications.

Today, communication equates to internet connectivity. Where we’re concerned, the best way to provide connectivity is through fiber optics. It’s reliable, it’s scalable and it exceeds the current FCC definition of served – making it futureproof. Even if the FCC reduces the definition of “served,” we’ll continue to deploy fiber to the degree that finances permit; it’s simply the right way to do business in the best interest of our customers.

The problem is that with a reduction in internet speed requirements, others may choose to deploy technologies that will need to be replaced in the near future as the demand for internet speed increases – and it increases daily.

With a limited Universal Service Fund available to assist in the costly deployment of high-speed internet infrastructure, reducing the minimum requirements for internet delivery would allow the allocation of funds for technology that is barely serviceable now, and will sure to be outdated in the next few years.

According to the FCC website, the mission of the commission is to regulate interstate and international communications by radio, television, wire, satellite and cable in all 50 states, the District of Columbia and U.S. territories, and its work is guided by the following strategic goals:

 Promoting economic growth and national leadership.

 Protecting public interest goals.

 Making networks work for everyone.

• Promoting operational excellence.

In our opinion, by reducing the standard for adequate internet speeds, the commission would be in direct conflict with all of these guiding principles.

As the Press Herald editorial points out, “True high-speed internet is a necessity for an economy driven by the latest technology. The areas that lack it are already in trouble and are falling further behind, and that won’t stop unless the government does something more than change a definition.” Otelco couldn’t agree more.

ABOUT THE AUTHOR

Rob Souza is CEO of OTT Communications, a division of OTELCO, which provides business communication technology and high-speed internet in Maine, New Hampshire and Massachusetts and serves residential customers in six states. He can be contacted at: rob.souza@ottcommunications.com

Creating a Broadband Policy without Doughnut Holes

By Trevor Jones, OTT Communications.

People are working to get broadband access to rural areas in companies like OTT Communications and at town halls, state houses and Federal agencies across the country.  The latter two groups are focused on two different vehicles for promoting broadband.  First, they set policies to promote broadband expansion and the construction of new networks.  Second, they distribute state and Federal monies in the form of grants to subsidize construction of networks where there isn’t necessarily a business case.When setting policy and awarding grants, the focus is on the “un-served,” although there is some recognition that a second group, the “under-served,” is also important. One guideline we use to determine who belongs in these groups is a government set definition of broadband.  Currently, the Federal definition is 25/3, but it grows over time as customer demand for bandwidth increases.  If you think logically, you might think the un-served are those without at least 25/3 and Federal grants are focused on getting everyone to 25/3 – but you’d be wrong.

Actually, The Federal government sets the bar for investment much lower than that.

The Catch 22 Created by an “Un-served First” Broadband Policy

The Federal standard for “un-served” for funding under the Connect America Fund is 4 Megabits per second down by one megabit per second up – meaning that if you have more than 4 megs today, your community cannot get Federal funds to improve coverage, even though the Federal definition of broadband is 25 megs.

Impacts of Broadband policy on GreenbushLogically, it makes sense that the areas with the worst connections should get funding first, but here’s the rub: this policy all but forces rural service providers to by-pass the town centers, which get decent DSL coverage, in favor of the outskirts of town.  Some people call this the “doughnut hole effect.” Although we want to build broadband for economic development, money is not available to build broadband in town centers, where you generally find the most economic activity.  Take this example from Rural Greenbush, Maine:

If you don’t know Greenbush, it’s all very Rural.  There is no cable broadband, but OTT Communications does have DSL in town.  Federal funds are available to support broadband through the Alternative Connect America Model (“ACAM”) in the orange areas on the other side of the river, and in the lighter green areas in the northeast of town.  The rest of Greenbush, including the majority of the Route 2 corridor, is in the doughnut hole.  Not only are there no Federal funds to support deployment there, but most of OTT’s capital budget over the next several years will go to the ACAM blocks as well, resulting in faster service around the outside of the “doughnut” leaving the center of town underserved.

This is an example of a Federal program, but Maine’s own grant programs offered through ConnectME have similar drawbacks. They focus very strongly on the un-served, at the expense of the under-served.

Filling in the Doughnut Hole

Doughnut HolesI don’t know about you, but I like munchkins (not talking about the Wizard of Oz here).  The doughnut holes are just as worthy of investment as the outside of the doughnut, and we need to find ways to fill them in. Some of this can be done by private industry, but if we want it done quickly, some adjustments to broadband policy would be a big help.

Where Private Industry Can Help

Our parent company, Otelco, spends millions of dollars each year on expanding and enhancing service.  Over the next several years, much of those funds will go to ensuring that the ACAM service areas are built out. However, there are some things we are doing to enhance service in areas that aren’t getting funding.

For starters, when we’re building out to an area that qualifies for funding, we pass several homes that aren’t funded. We use our own capital budget to connect them, increasing the size of fiber cables and installing the necessary drops and equipment. For example, when we built a recent ConnectME funded project to 30 homes in an unserved area in Gray, Maine, we brought fiber to another 50 homes we passed on the way there.

We’re also doing stand-alone projects in un-funded areas where we can, but these projects are small in comparison to the size of the area we are working to serve.  We’re currently working on deploying fiber in parts of Whiting, Vermont as part of this effort.

How Funding Practices Might Change to Speed Deployment in the Doughnut Hole

Modifying the funding model would also help fill in the doughnut hole.  Rather than have two standards, a definition of broadband and a lower definition of un-served, imagine having a single definition of broadband, and funding broadband deployment on the net improvement in bandwidth.  For example, if we define broadband as 25/10 and used a tiered structure like the one displayed below, we could establish tiered funding based upon the net improvement in broadband speed.

Tier Service Level Service Designation
5 50/50+ Served
4 25/10 and 50/50 Served
3 25/3 and 25/10 Unserved
2 15/2 and 25/3 Unserved
1 10/1 and 15/2 Unserved
0 Below 10/1 Unserved
One Tier Improvement 10% Funded
Two Tier Improvement 20% Funded
Three Tier Improvement 30% Funded
Four Tier Improvement 50% Funded
Five Tier Improvement 60% Funded

In this way, there is funding to improve performance for the under-served, and more funding to bring broadband to the un-served.

Keeping our eyes on the ball

While we’re working on the worthy goal of bringing broadband to the un-served, let’s remember that our goal is better broadband for everyone.  Eliminating doughnut holes that leave town centers un-served requires a joint effort on the part of industry and policy makers, and smart policies that put funding where it can do the most good.

Regional Broadband Approaches: Achieving Scale with Community Networks.

By Trevor Jones, OTT Communications

Fiber TownMore and more, communities are considering the possibility of building publicly-owned broadband infrastructure.  In the process, some are finding that regional broadband approaches offer economies of scale and other benefits. It can be difficult for multiple communities to work together while competing for resources and economic opportunity, but a handful of groups are making the attempt to build regional broadband networks in New England.

The Benefits of Regionalization in Broadband

Regional broadband approaches provide many benefits over go-it-alone municipal broadband.  As you might expect, the benefits fit broadly into the term “economies of scale,” but they go beyond mere cost savings. A regional network can be both more cost effective and more reliable than a smaller localized network.  Here are some examples of how regional broadband approaches can deliver better results:

  • Extending the middle-mile. In Maine, the Three Ring Binder is an outstanding middle mile asset, but it doesn’t touch every underserved community. As a result, many towns that aren’t located along the 1100-mile route must consider building across neighboring towns for access. By working together, towns can share costs and build networks that interconnect across town boundaries.
  • Route diversity and redundancy in the middle mile. In Massachusetts, MassBroadband 123 connects a more underserved towns than the Three Ring Binder, but many of those connections lack diversity. A regional approach can make the network more reliable by making highly reliable “rings” where MassBroadband123 does not.
  • Operating efficiency. Trucks, technicians and call centers to support customers all come with fixed costs, or “overhead.” Those fixed costs either don’t increase, or don’t increase proportionally as the number of customers grows. This is a key cost-saving element of “economies of scale.”
  • Buying power. Bigger buyers have bargaining power and pay less than smaller buyers. A consortium of towns buying many gigabits of Internet bandwidth and tens of thousands of email accounts will pay less per megabit and less per email account than a single town that needs only one gigabit of Internet and a few hundred email accounts.

With benefits like these, it’s a wonder more communities aren’t following this path, but we do have a few notable examples in New England that we look to for results as they explore regional broadband.

Three Examples of Regional Broadband Approaches in New England

  • EC FiberEC Fiber: This coalition of 24 towns in East-Central Vermont, provides 10, 25, 100 and 500Mbps service options to residents. EC Fiber’s funding approach is unique, because when the government bond market collapsed in 2008, it funded its growth from the contributions of local investors that wanted to connect their towns. This approach has been so successful that the coop was able to attract $9 million in outside financing last year. Its goal is to connect all residents in its territory and expects to have completed construction to every home in 21 of its 24 towns by 2019.
  • Wired West - an example or regional broadband approachesWired West: This cooperative of 26 communities in Western Massachusetts is striving to leverage economies of scale to bring true broadband service to its members. Thwarted at times by changes in broadband policy at the state level, Wired West is now working to pool its members’ resources to create efficiency in the operation of networks that will be constructed and owned by its member communities, but designed to work together.
  • Our KatahdinOur Katahdin: This volunteer-driven non-profit organization is working to promote community and economic development in the Katahdin region of Maine. It has identified the digital economy as a key industry in which the region has key advantages, including access to the Three Ring Binder, quality of life advantages, cooler weather and unused industrial space suitable for data center development. The group recently received a Broadband Planning Grant from the ConnectME Authority, and is in the early stages of developing a plan to expand broadband access in the region.

Will more towns follow suit with their own regional broadband approaches? It may be too soon to tell. We’ll be watching these attempts at regionalization to see how they balance the competing interests of their members and stakeholders against the benefits of working together.

This post originally appeared in the OTT Communications Blog.

Bringing Broadband to Maine’s Rural Communities: Insights for Maine from National Success Stories.

Join us on October 25th to hear from broadband success stories from across the country.

Bringing Broadband to Maine’s Rural Communities: Insights for Maine from National Success Stories Sponsored by the Maine Broadband Coalition, CEI and Island Institute

Broadband access is a critical driver of economic growth and prosperity, and necessary for rural Maine’s future. Join us to learn about four rural broadband success stories from around the country. Our speakers are leaders in creating and implementing innovative rural broadband models.  They will share their stories and discuss how they engaged stakeholders, providers, funders, businesses, and state, local and county government to bring broadband to their communities and spur economic growth.

Our speakers include:

Mark Erickson, Economic Development Agency Director for Winthrop, MN, and Board Member of RS Fiber, a Minnesota cooperative that used an innovative business model to expand Fiber to 10 cities and 17 townships in rural Minnesota.

Tim Herwig, District Community Affairs Officer, Office of the Comptroller of the Currency (based in Chicago, IL), who helped RS Fiber set up innovative equity financing that leveraged additional debt financing to build out the co-op network.

  • Carole Monroe, CEO, and  Stan Williams, CFO Valley Net Inc., the operations company of EC Fiber in Vermont, a community-owned fiber network of 24-member towns in central Vermont.
  • Danzel Hankinson, a community leader who was instrumental in developing LeverettNet, a fiber network in the town of Leverett, Massachusetts, population 2000.
  • Page Clason, a community leader who was integral in spearheading and overseeing implementation of the first island gigabit network, in Islesboro, Maine, which has just received voter approval for bonding.

Presenters will address challenges and successful strategies for their respective projects regarding:

  •          Community engagement and outreach to potential customers;
  •          Securing contracts and financing;
  •          Overseeing construction and network operations; and
  •           Achieving adoption or subscription rates

Thank you to our partners! The Island Institute and NeighborWorks America

How Chebeague Island crossed the digital divide – keeping pace with Internet use calls for mixed solutions

By David Hill, Island Institute

Islanders provide for themselves and Chebeague Island is no exception. Over the years, we Chebeaguers have built our own library, recreation center, museum, daycare center and affordable housing; created an assisted living facility; and even provided our own ferry service.

Plus, we became our own town, seceding from Cumberland. So it should come as no surprise that when islanders couldn’t convince anybody to provide Internet service, we took up the challenge and did it ourselves.

We’re proud of our homegrown Internet service, but with the need for even more speed and investment, we need the cooperation of local, state and federal governments, as well as that of FairPoint, which will finally offer Internet on the island.

Beverly Johnson, the owner of an island plumbing company, had been authoring the island website, www.chebeague.org, since 1996, before the term “blog” had even been invented. I’m Beverly’s brother-in-law, and a business counselor and director of the Maine Small Business Development Center at CEI in Wiscasset. We both wanted speeds faster than dial-up and decided to do something about it.

We approached GWI, TimeWarner, Verizon and others, but with no success. With no alternative, we knew we would have to do it ourselves.

In 2006, we met Peter Petersen of Swanville, who had founded Mainely Wired to provide better Internet for himself and his neighbors—just like us! He agreed to set us up and train us in the art and science of wireless Internet installations. And so it happened that a plumber and a business counselor became network engineers.

We recruited a dozen “investors,” who formed Chebeague.net, LLC with the intent to provide for the community rather than for themselves. Bolstered by a $75,000 grant from the ConnectME Authority, plus grants from the Island Institute (publisher of The Working Waterfront) and Chebeague’s Recompense Foundation, a new ISP (Internet Service Provider) was born (www.chebeague.net).

In our “spare time,” Bev and I climbed roofs and crawled through cellars making the first hundred or so installations around the island. For the more technically minded, our five T1 lines provided about 7.5 mpbs to the island, delivered to homes wirelessly at 900 mHz, and households could hope for almost 756 kbps in upload/download speeds. We were in heaven.

We could email and surf the web. But that was before YouTube, Netflix and AppleTV became so popular. And it was before we had almost 200 customers sharing that 7.5 mbps.

We again approached the phone company, FairPoint by now, but again had no success. In 2012, Chebeague.net obtained another ConnectME $75,000 grant, bringing 20 mbps of bandwidth to the island via microwave from Portland to be shared by Chebeague’s homes and businesses through FairPoint’s leased telephone lines, fed by Chebeague.net’s central trunk fiber optic cable. We could offer 6.0 mbps down and 1.5 mbps up and again we were happy.

But remember YouTube, Netflix and AppleTV? We needed more bandwidth and in short order increased it to 30 mbps and then 35 mbps, the limit of our microwave radio equipment at the time. But even that was not enough to meet the growing demands of year-round and seasonal islanders.

So in 2015, we went back to our friends at Axiom Technologies and upgraded our microwave equipment to handle up to 225 mbps, currently delivering 100 mbps to the island, a long leap from the 7.5 mbps we started with.

We recently learned that FairPoint has received a grant from the Federal Communications Commission to run fiber optic cable under Casco Bay to serve the island school and library with 100 mbps service and “unserved locations and… locations with low speed Internet” with at least 3 mbps down and 1 mbps up.

We have had several communications with FairPoint Maine’s top executives, offering to share facilities (particularly the fiber optic cables) and work together to provide island residents with the best and fastest Internet service possible.

Over the past nine years we have invested almost $300,000, half from “investors,” half from taxpayers and built a loyal customer base of 250 homes/businesses, 87 percent of the year-round households and half of the seasonal residences.

We hope to work with FairPoint to utilize the new fiber under the bay to increase the bandwidth available and to upgrade the copper wiring on the island to make Internet available to the few residences that have not been able to enjoy DSL service.

In addition, we eagerly await the results of the Island Institute’s study of broadband infrastructure on the islands, currently being conducted by Tilson.

Although we are proud of our contribution to the island by crossing the digital divide and forever avoiding the pain of dial-up Internet service, there is still a long way to go.