Access to the Internet is the most significant economic enabler of our time. Broadband access enhances access to education, healthcare, and economic opportunity. Its importance is so clear to economic development professionals that many towns are choosing to build their own broadband networks or provide TIFs and other incentives to their local carriers in order to encourage their construction. These towns see broadband Internet access as a key competitive advantage. They know it will be easier to bring businesses and skilled workforces to their communities if they have high speed broadband access.
A state law that prevents a town from taking action to advance broadband access, likewise, puts a community at a significant economic disadvantage as compared to similarly situated communities in neighboring states. This makes municipal broadband very much an issue of digital equity – one that hits home for us, since two of our home states, Alabama and Missouri have restrictive laws.
Interestingly, the companies that make up the OTELCO family and many others around the country were founded, built, and paid for by local farmers and businessmen in the late 1800s when private industry couldn’t make a business case to build telephone infrastructure in rural areas. What would these communities look like today if the federal government made it illegal for those farmers and businessmen to build that, then state-of-the-art, communication infrastructure?
Why States Pass Anti-Municipal Broadband Laws
Proponents of anti-municipal broadband laws take the paternalistic view that the states need to protect taxpayers, and the municipalities themselves from the investment risk should the network fail to attract enough subscribers to be self-sustaining. While this does happen from time to time, many municipal networks are profitable. In addition, a simple “profit and loss” calculation doesn’t always paint the whole picture for a community, which is equally interested in attracting and retaining businesses and homeowners.
Community Broadband opponents also point out that municipalities don’t necessarily have prior experience building and operating telecommunications networks – an observation that, while true in most cases, completely ignores the fact that towns usually contract with an experienced provider or providers to operate the network and serve customers. Leverett MA is a great example where OTELCO serves as the ISP and handles all customer facing functions, and Holyoke Gas and Electric is the network operator and manages the physical network infrastructure maintenance and operation.
At the end of the day, it really comes down to whether or not you believe the government should make direct investments in infrastructure or leave those investments to private industry, even in cases where private industry is not actively investing in the community.
States Taking a Different Approach
While some states are moving to restrict municipal networks, others are encouraging local action to improve broadband availability in unserved and rural areas. For example Maine has a provision for the ConnectME Authority to award planning grants and infrastructure grants to communities planning to build their own broadband networks. Massachusetts also set aside $40 million for communities to pursue broadband solutions, although it did encourage them to work with established providers on their projects.
These investments by State governments are encouraging local investment by communities and by private industry. Massachusetts currently has several projects underway in its Western Hill Towns, and Maine has several towns conducting feasibility studies. In many cases, networks are being built in towns that have no Cable TV and very limited DSL – networks that might not otherwise have been built.
Congress Could Level the Playing Field
The current environment has already created digital “haves” and “have-nots,” particularly in rural areas. The divergent paths of the states will perpetuate rural “have-nots” in some states, while states that are investing close the gap more quickly. A law that removes barriers to local investment would put the power to act in the hands of those most effected by the lack of commercial investment, and put rural Alabama on a level playing field with rural Massachusetts for Internet commerce, educations and jobs.
By Trevor Jones, OTT Communications
The transition that is currently taking place in the telecommunications industry hasn’t happened before. For the first time, an all-new network is being built to replace the network that was there before – fiber instead of copper. It’s a complicated job, and a very expensive one. Some private companies, like ours, have begun this transition on their own, while others are having a hard time justifying the expense, especially in rural areas.
Rather than be left behind, some rural communities like Islesboro in Maine and Leverett and Mount Washington, Massachusetts, are banding together and taking matters into their own hands. It’s a big job, and if your town is considering doing the same, you’ll probably want to first look for a partner who is willing to build a network for you and bear most of the cost. Lucky towns will find such partners.
If your community does decide that it needs to build and operate its own network, you have a big job ahead of you. It will be important to break the job into manageable chunks, and get the right help from trusted partners to successfully serve your community. Throughout this process, you’ll be tempted to take shortcuts or hand the reigns over to someone else who says they can do it all and save you the trouble. In the long term, the best result will probably come when those leading the broadband effort in your community are more involved, and have more control over the process.
The Four Primary Roles in Building a Community Broadband Network
There are many moving pieces involved in bringing broadband service to a community, and while you could certainly divide it up more, there are four main roles involved in bringing a community network from concept to completion. They are:
- Broadband Committee. This is a local group of interested citizens who oversee the community broadband effort. These dedicated individuals will interview potential providers, apply for grant funds, and administer RFP’s to choose the various contractors involved in building and operating the network and serving customers. Members of this committee may also be chosen to head a governing board, such as the MLP board in Leverett and similar Massachusetts towns.
- Design-Build Contractor. Sometimes the design and build functions are separate, but often the same firm that does your network design will have the trucks and personnel to build the network. You may also want an independent Owner’s Project Manager to keep the design-build firm on task.
- Network Operator. A network operator monitors and maintains the electronics on your broadband network. When things aren’t working right, they troubleshoot problems and dispatch technicians when necessary, either from their own crews or third party contractors.
- Internet Service Provider / Telephone Service Provider. On many municipal networks, like the one in Leverett, Massachusetts, a single Internet service provider is awarded a contract to provide service for 3-5 years. The ISP provides the Internet and phone connections over the community’s network, along with ancillary services like email. In addition, the ISP provides end-user technical support and customer service, as well as billing and collecting end-users and remitting the communities portion of the fees to the town.
Why One Stop Shopping May Not Be Ideal for Community Broadband Networks
Having a separate builder, operator, and ISP may seem like a lot of extra work, but you may want to consider the added effort in the best interest of your community. Just like you will want to connect your town to the Internet with diverse middle-mile connections in order to ensure reliability, having some diversity in your service providers gives you added flexibility and security over the long run.
For example, having a Network Operator that is independent from your design-build contractor provides a level of experienced, third-party oversight to protect the quality of the network being built. The eventual operator has not only the expertise, but also a vested interest in ensuring that the network is well designed and built.
Alternately, having different entities perform the Network Operator and ISP functions on your community network will facilitate smoother transitions should you decide you need to make a change in either the network operator or the ISP. In such situations, you have a trusted partner with their own records, systems, and expertise to help support the transition. Things might not go so well if you only have one partner and they’re less than cooperative because they’re losing your business. Case in point: we were able to effect a seamless transition from the prior ISP in Leverett, MA, thanks in part to the support of Holyoke Gas and Electric, the network operator in Leverett.
Need Help Planning Your Community Network Initiative?
We’d love to help. If you’re thinking of applying for grants from the ConnectME Authority, the Massacutsetts Broadband Institute, or another state or Federal agency to assist in planning a broadband project, let us know! We also encourage you to download our free Municipal Broadband Primer.
This post originally appeared in the OTT Communications Blog.
Portland Press Herald, Oct 2, 2017
Redefining ‘adequate’ coverage will slow the rollout of much-needed high-speed service.
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: firstname.lastname@example.org
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.
Logically, 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
I 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|
|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|
|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.
By Trevor Jones, OTT Communications
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 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: 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 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.