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

Important series of meetings!

The ConnectME Authority will be conducting a series of community forums to receive public comment regarding broadband issues in Maine as part of the creation of a triennial strategic plan. Citizens, business owners, municipal representatives and others are being encouraged to participate. Four forums will be held at:

  • Wed., 9/16, from 5:00PM to 7:00PM in Abromson Hall at the University of Southern Maine (USM) in Portland
  • Mon., 9/21, from 5:00PM to 7:00PM at the Wells Conference Center at the University of Maine at Orono (UMO)
  • Wed., 9/23, from 2:00PM to 4:00PM, and 5:00PM to 7:00PM at the Campus Center of the University of Maine at Presque Isle (UMPI)
  • Wed., 9/30, from 5:00PM to 7:00PM in the Jewett Hall Auditorium of the University of Maine at Augusta (UMA)
High speed ahead: South Portland joins Rockport in upgrading its fiber optic network

High speed ahead: South Portland joins Rockport in upgrading its fiber optic network

By James McCarthy, MaineBiz

Chris Dumais at South Portland City Hall

Chris Dumais at South Portland City Hall. Photo by Tim Greenway, MaineBiz.

Bob O’Brien, one of the owners of the Noyes Hall & Allen Insurance Co. in South Portland, readily admits an insurance company don’t necessarily require the kind of bandwidth that the local tel

evision production company Lone Wolf Media might need for uploading videos to clients ranging from National Geographic to “Nova.”

Yet, because he also serves on the city’s economic development committee, O’Brien says the recent installation of a fiber optic one-gigabit-per-second Internet network in his neighborhood is great news, even if the benefits might prove modest for an insurance company.

“We’re definitely looking forward to improved speed and greater reliability,” he says. “I really do see it as an economic development tool. Right now, we’re only the second town in Maine to do this. It makes us stand out. It’s great that a lot of folks at City Hall thought outside of the box to make this happen.”

One of those out-of-the-box thinkers is Chris Dumais, the city’s director of information technology, who credits City Manager James Gailey and former Assistant City Manager Jon Jennings . . .

Read the full article at MaineBiz.biz

Productive legislative session is a good start

Positive steps part of multi-year effort to make Maine’s economy competitive

(Augusta, Maine) Although Maine was rocked by national publicity last year exposing the state’s scarce access to highly reliable and very high-speed Internet, an alliance of businesses and organizations says the state has made fairly good progress correcting course in the current legislative session.

The Maine Broadband Coalition (MBC) is supporting LD 465, LD 1063 and LD 1185, all three of which are still alive in Augusta. LD 465 would help ensure that Maine’s internet backbone, the 3 Ring Binder, is fully utilized. It removes a state surcharge that falls disproportionately on rural areas. The Maine House of Representatives passed the bill this morning and sent it on to the Senate. LD 1185 would provide $6 million in funding to local broadband planning and community broadband investment through the ConnectME Authority.

MBC members say LD 1063 is particularly important. The was bill passed unanimously by the Joint Standing Committee on Energy, Utilities and Technology, and is a key stepping stone in a long process of building state-of-the-art communications infrastructure. The bill now waits approval by the full legislature and Governor Paul LePage.

“This is the first overhaul of the state legislation supporting broadband since 2006,” said Carla Dickstein, a founding member of MBC. “It puts into place mechanisms that promote strategic planning, measurable goals and objectives, with public input and annual reporting required. And for the first time, it allows the state to support local broadband planning efforts. If we’re going to bring world-class Internet to Maine, we have to be very wise about how we proceed, and this bill gets us started in the right direction.”

Dickstein said passing L.D. 1063, “An Act To Promote Community Broadband Planning and Strengthen Economic Opportunity throughout Maine,” would go a long way toward correcting Maine’s path.

“Since we’re a rural state, private companies send us to the back of the line for cutting edge Internet infrastructure. If the full legislature sends the bill to the governor and he signs it into law, that’ll be a strong indication that state leaders recognize Maine’s economic future depends on stimulating build-out of critically needed infrastructure,” Dickstein said.

Maine municipalities are growing frustrated with large incumbent telecommunications providers who do not want to invest in rural areas, but who also try to tell legislators that Maine “doesn’t need” high-speed Internet. Impatient with that combination, municipalities are taking matters into their own hands. In March, the City of Sanford released a request for proposals to establish a public-private partnership to expand Sanford’s broadband infrastructure by building a city-owned fiber optic network.

On Saturday, voters in the town of Islesboro overwhelmingly approved beginning the process of making “FTTH,” or “Fiber To The Home, available to every island resident. In the last year, both Rockport and South Portland announced that they would install Internet networks capable of speeds up to 1 gigabit-per-second, both upload and download. Bangor, Sanford and Portland have also expressed interest in the “municipal broadband” concept.

“A selectman in Islesboro told the Portland Press Herald on Saturday that his town is ‘a community intent on keeping up with the world, and maybe getting ahead of the world,’” Dickstein said. “I think what we’re seeing across Maine, and in Augusta, is that communities are recognizing how high the stakes actually are for Maine’s economy. Cutting-edge Internet is no luxury, it’s a crucial necessity.”

Maine Broadband Coalition (MBC) is an informal federation of public policy professionals, educational institutions, businesses, non-profit organizations and individuals who are concerned about Maine’s economic future. For more information visit www.MaineBroadbandCoalition.org.

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