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Muni Broadband Hits New Speed Bumps

Mari Silbey
1/25/2017
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Fibrant may be a cautionary tale for municipal broadband. The muni-owned organization out of Salisbury, N.C. earned bragging rights in 2015 when it announced broadband service with speeds up to 10 Gbit/s. But now a local newspaper is reporting that the City Council has agreed to look at options to offload Fibrant operations either through a leasing or management deal with third parties, or through the complete sale of the utility.

The negative turn for Fibrant is a sign that local lawmakers are growing tired of the annual debt payments required to keep Fibrant's network going. According to a report in the Salisbury Post, those payments amount to $3 million a year, and the city so far has little to show for its investment. While nothing has been decided yet about Fibrant's fate, the fact that the City Council is considering its options may mean that this muni broadband experiment is headed for an untimely end. (See Carolina Town Becomes First US 10-Gig City.)

Not far from Fibrant, the state of Virginia is facing a different but related broadband debate. Lawmakers in the Virginia House of Delegates have proposed legislation -- House Bill 2108 -- that would make it more difficult for municipalities in the state to operate their own broadband services. The move follows a court decision last year overturning an FCC ruling that would have made it illegal for states to put up barriers to municipally-owned broadband networks. (See Is Wheeler's FCC Legacy Now in Doubt?)

In the wake of that case, Virginia legislators now want it to be illegal for local governments to embark on municipal broadband projects if at least 90% of the service area already has access to Internet service with average speeds of at least 10 Mbit/s and 1 Mbit/s upstream. Republican delegate Kathy Byron has put forth the proposed broadband bill, and while no vote has been scheduled on it yet, Byron's fellow Republicans control both houses of the Virginia government.

Municipal broadband has an uneven history, with some disastrous failures countered by some spectacular successes. Owning and operating a broadband network is hard, and just as some private companies have crashed and burned in the business, so too have muni providers discovered that broadband is no get-rich-quick scheme – where "getting rich" means closing the digital divide, improving regional finances and transforming the economic development environment.

However, there are many experts who believe a longer view on municipal broadband is needed. While Fibrant in North Carolina may not be turning out the way its early champions had planned, former Fibrant broadband director Kent Winrich, who resigned from the position last August, says the utility's current predicament isn't a sign that communities should stop investing in their own broadband futures. Winrich argues that fiber networks are a tool. The model for financial success shouldn't be "build it and they will come," but rather build it with upfront buy-in from the community and tie the broadband blueprint to well articulated economic development policy.

"I don't know if they realize what they really have," says Winrich, referring to the city of Salisbury and Fibrant's network infrastructure assets.


Interested in fixed broadband market coverage and insights? Check out our dedicated gigabit/broadband content channel here on Light Reading.


Winrich also believes that in Fibrant's specific case, the utility unfortunately got caught in the middle of major technology changes as it deployed its network services. Initially he says Fibrant focused heavily on delivering traditional television... just as the online video revolution was getting underway. And Fibrant deployed all fiber when Winrich says it's becoming increasingly clear now that hybrid networks combining fiber and wireless technologies may make the most economic sense.

Since resigning from Fibrant last summer, Winrich has moved on to a new gig, but he's not leaving the broadband sector. Instead, Winrich is now CTO at a consulting firm called Open Broadband dedicated to helping both companies and communities "design, deploy and operate managed broadband networks." And he says business is picking up.

In particular, Open Broadband wants to bring more high-speed Internet access to underserved areas and help neighborhoods where students don't have the broadband connections they need to keep up in school.

"We're in this to make a difference," says Winrich.

Winrich also has some choice words for how commercial Internet service providers have controlled broadband access in the market. He notes that ISPs are "given billions of dollars to provide services to [citizens] and are just going backward" as a measure of progress through their efforts to block muni broadband while also not adequately serving certain communities.

In Virginia, meanwhile, there is growing backlash against the efforts of legislators to aid commercial ISPs in hampering municipal broadband builds. Numerous companies went on record last week to oppose bill 2108, stating in a letter to the state government that the bill would "impair economic and educational opportunities that contribute to a skilled workforce from which businesses across the state will benefit."

The authors also declared that, "Communities with data speeds limited to the HB 2108 target of 10/1 megabits cannot realistically hope to attract or retain modern businesses or provide their residents, particularly their young people, a reason to stay in them. These communities will be condemned to economic stagnation or worse – like the 'ghost towns' that died a century ago for lack of adequate electricity."

Organizations signing on to the letter include some big names. Among them are: the Fiber-to-the-Home (FTTH) Council , Google (Nasdaq: GOOG), Netflix Inc. (Nasdaq: NFLX), Nokia Corp. (NYSE: NOK), Ting (owned by Tucows ) and more.

The effort suggests that while municipal broadband may be hitting a rough patch, the fight to make it a viable option for communities with limited Internet access isn't over.

— Mari Silbey, Senior Editor, Cable/Video, Light Reading

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kq4ym
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kq4ym,
User Rank: Light Sabre
2/6/2017 | 9:52:58 AM
Re: Basic education
It may be that goernments should only be involved in providing services to those who can't readily get them, for example rural communities or those without resources to pay. Providing broadband to all maybe have been a risky gamble to start with, without knowlege and experience to pull it off without being victim to the hired guns?
GregW333
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GregW333,
User Rank: Lightning
1/29/2017 | 11:09:27 AM
Governments should mandate Open Access
Giving tax payer money to private enterprises to do what they should be doing is un-American. All government funding should mandate Real retail Open Access. Even if the $ goes to the ILEC or Cable company or the Muni. Otherwise all the government is doing is picking decade long winners and adversely impacting the free market. Incumbents are powerful enough not to beg for government handouts. Plus, large incumbents who get free money for a non competitive area can use the profits to compete in competitive areas. Doesn't sound like a free and fair market to me. You want government handouts... You will deploy open access. Simple and fair for the entire broadband ecosystem.
brooks7
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brooks7,
User Rank: Light Sabre
1/27/2017 | 12:53:53 PM
Re: Basic education
I think the impetus to government involvement has to do with the way that the Service Providers allocate their capital.  Nobody invests in anything without a Return on Investment.  The only question is - WHEN.  Rural areas have never been at the top of the list for that reason.

seven

 
msilbey
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msilbey,
User Rank: Blogger
1/27/2017 | 10:08:42 AM
Fibrant RFP is now posted
And Salisbury has officially issued an RFP for "Fibrant FTTP Provider Arrangement" http://www.ctcnet.us/news/city-of-salisbury-nc-issues-rfp-for-fibrant-fttp-provider-arrangement/ 

(Thanks, Kevin!)
mendyk
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mendyk,
User Rank: Light Sabre
1/27/2017 | 10:05:33 AM
Re: Basic education
Pomposity alert: Quite a few years ago, I had a somewhat tense discussion with Sen. McCain about the "digital divide." His take was (and I would guess still is) that people who live in remote or sparsely populated areas have other quality-of-life advantages and shouldn't expect the government (read other taxpayers) to provide them with all the amenities that come with living in tighter quarters. For some reason, he kept bringing up Vail, CO, to emphasize his point. Fact is, this is a big country, and infrastructure investment -- even at the government level -- should be weighted toward areas where it will have the biggest impact.
f_goldstein
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f_goldstein,
User Rank: Moderator
1/26/2017 | 11:05:29 PM
Re: Basic education
Or let them eat cake.

Most of the places without broadband service also don't have cellular service, or at least not much. Certainly a lot of places in Massachusetts I've been working with, sparesely-populated hill towns, don't have cell service everywhere. Some residents use satellite Intenret but even that doesn't work in every location, due to hills and trees in the way.

It's nice if private providers will step in but if there are no subsidies, it often isn't profitable, and no company intentionally does big things that lose money. Government subsidizes a lot of things for rural people already.
freehe
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freehe,
User Rank: Light Sabre
1/26/2017 | 10:53:36 PM
Re: Basic education
@mendyk, excellent point. Part of my schooling was without using the internet and we flourished in academic study and did well.
freehe
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freehe,
User Rank: Light Sabre
1/26/2017 | 10:51:39 PM
Re: Basic education
@f_goldstein, thanks for sharing. I agree, I think it is bad for a municipality to have no broadband. I guess them assume everyone can use their smartphone if they want to use the internet.

 
freehe
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freehe,
User Rank: Light Sabre
1/26/2017 | 10:49:43 PM
Muni Broadband benefits
As the article stated, broadband and fiber provide many benefits such as closing the digital divide, improving regional finances and transforming the economic development environment.

Hopefully the NC government will find a suitable vendor that can provide broadband services in the most efficient and effective maner that meets the needs of all residents and local companies.
freehe
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freehe,
User Rank: Light Sabre
1/26/2017 | 10:47:58 PM
Muni Broadband
Implementing any new technology requires the right leadership, skills set, strategy and implementation plan. It sounds like Fibrant did not study the market well enough to identify emerging industry trends, if they had, they might have implemented a hybrid approach instead and would still be in business with the NC government.

 
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