How To Finance a Community Broadband Network When Incumbents Fight Back

By Craig Settles

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Municipal broadband networks may the fastest way for smaller communities — and those in areas without much competition — to bring better broadband to their businesses and residents. These networks aren’t generally popular with incumbent communications providers, which have a history of suing to stop them. However, their tactics have changed.

In 2005, the main goal of large incumbent telcos and cable companies was to try for an outright ban on municipal networks. As the public vigorously fought back, incumbents switched to creative assaults on communities’ ability to find or use money to pay for networks. Eighteen states have restrictive muni network legislation (see map) that makes building a community-owned network impossible or difficult, especially when it comes to funding them.

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Citizens Against Public Waste Call Broadband a Luxury Not a Necessity

Technically I agree with Mr. William’s assertion that broadband services (Internet access and video services) are not a necessity…currently.  Sending and receiving e-mail or posting the satisfaction of your latest latté are not necessities nor are they guaranteed in our Constitution.  Then again neither is health care, but it now considered a human right so the current administration saw it fit to make sure that every citizen has it.

Electricity was not considered a necessity at the beginning of the twentieth century, but many communities saw its utility to stimulate their economy.  Now electricity IS a necessity because there are several life-sustaining devices that require electricity to operate.  Citizens subsidize the rates of the poor and elderly to provide them electricity.  Telephone service suffered the same fate.  It transformed from being a luxury to a matter of public safety;  thus, the Universal Service Fund.

Now we are undergoing the same debate on broadband services.  We are at the point on the adoption curve where it is going beyond a toy for nerds and geeks to playing a vital role in the economic vitality of a community.  The economic and social benefits of broadband services are well documented which bring it beyond the point of being called a luxury for the rich.  Communities should decide on the local level whether they would like to expend funds to build a broadband network if they feel that the incumbent service providers are not doing a satisfactory job.  Remember that much like water, roads, sewer, and electricity, the market for broadband services is not typically competitive in most communities.  There are typically one or two different service providers in a community.

Many communities are struggling to keep businesses and citizens in their community.  They seek ways to drive economic activity and a good broadband network is one way to accomplish that goal.  The most successful communities in this endeavor are not actually providing services, but offer open-access to any service provider that wants to sell services in their community.  The service provider purchases access from the municipality which supports the operation, maintenance, and growth of the networks.  Some communities are even seeing a net positive flow into their general fund;  therefore, building a broadband network can be done without wasteful government spending.  Before you know it, broadband networks will be necessity for the health, eduction, and safety of its citizens.

BroadbandBreakfast.com Staff, BroadbandBreakfast.com

WASHINGTON, July 29, 2010 – Speaking in a webcast by the Broadband Policy Series this afternoon, David Williams of Citizens Against Public Waste said that there “wouldn’t be any circumstances in which government should step in” where community broadband is concerned. According to Williams, even when local governments step in, there tends to be a centralizing process by which one locality wants the same services as another locality, thus evolving the process to a Federal level.

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Vt. broadband Internet access: Where is it?

By DAVE GRAM
The Associated Press

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EAST MONTPELIER, Vt. — Marlene and Mike McCarty, real estate brokers who do much of their work at home less than four miles from the Vermont Statehouse, say they spend hundreds of dollars and hours each month on things they wouldn’t have to if they had broadband Internet access.

Despite promises for years by state officials and phone and cable companies that they would have broadband by 2010, they’re still waiting. Now Vermont is in the heat of a gubernatorial campaign, and the candidates are making a new round of promises about broadband and fixing Vermont’s spotty cellular phone coverage.

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FCC: Broadband Starts at 4 Mbit/s

I applaud the Commission for actually being bold enough to state that 200 Kbit/s is not broadband, although I contend that 4 Mbit/s is not a substantial definition beyond this year.  The point is that the FCC is actually trying to be a bit forward looking minus the two commissioners that seem bent on serving a different master.  One of the reasons that consumers opt for lower speed is the cost of higher speed services is out of their budget range.  The price per bit for broadband in many areas ranks as some of the most costly transport in the world.

After upgrading its standard definition of broadband to 4 Mbit/s, the Federal Communications Commission (FCC) says in its annual broadband deployment report that the prospects for getting high-speed Internet access to 14 to 24 million Americans in poor or rural areas that lack it are “bleak.”

When the FCC began issuing its annual broadband deployment reports in 2004, it set the standard for broadband Internet access at 200 Kbit/s. In the report it issued Wednesday, the commission says that it doesn’t consider a household a broadband-connected home unless it has a high-speed Internet connection with a minimum download speed of 4 Mbit/s and upstream speed of 1 Mbit/s. (See FCC: Up to 24M Lack Broadband Access.)

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Open LTE network in the US reaches next phase – now find a tenant

Philip Falcone of Harbinger Capital Partners is a step closer to his American dream: a national open access, wholesale-only, net-neutral LTE network. He first unveiled the plans in March and now the venture has a name (LightSquared), a management team (headed by former Orange CEO Sanjiv Ahuja) and a supplier (Nokia Siemens Networks). Falcone brought a number of assets into the company (SkyTerra, Terrestar), giving LightSquared generous spectrum resources of 59 MHz. The assets are valued at USD 2.9 billion, and the company said it has an agreement for another USD 1.75 billion in debt and equity financing.

NSN won the contract to build a network of 40,000 base stations within five years, to cover 92 percent of the US population, with the remaining coverage to be provided by satellite. The project is expected to create around 100,000 direct and indirect jobs. The order is worth USD 7 billion (EUR 5.5 billion) over eight years to NSN. The company’s sales were EUR 12.6 billion in 2009, so the contract adds an average 5.5 percent to sales each year. After acquiring Motorola’s networks business for a nice price, this is another good deal for NSN.
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Cruizo Works With Three California Counties to Build Fiber Network

WASHINGTON, July 14, 2010 – Santa Cruz, Monterey and San Benito counties want $43 million from the National Telecommunications and Information Administration fund for high-speed internet.

$12 million in matching or in-kind contributions have already been promised to build about 312 miles of broadband fiber from downtown Santa Cruz into rural parts of Monterey and San Benito County. Continue reading

Americas Report: Google to Build Out Multiple Fibre Cities?

In our continuing series of previews for the “Connected States of America” documentary, TelecomTV’s Guy Daniels visits the headquarters of Google to learn more about the companys plans to create a Fibre City. In an exclusive interview with Google Chief Technology Advocate, Michael Jones, it now appears that there may be more than one winner — good news to the 11,000 cities that want the prize. Further previews will appear in NewsDesk every week.

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