Every now and then, we stumble across something, read it twice, and then decide we need to verify it. In North Kansas City, a municipal fiber network operating in partnership with KC Fiber, is delivering a gig to residents at no ongoing charge after a reasonable one-time fee. To get the story, our interview this week for Community Broadband Bits is with Brooks Brown, Managing Partner of KC Fiber. KC Fiber is now running the North Kansas City municipal fiber network, liNKCity.
The network delivers a free gigabit to the schools and after a one-time fee of $50-$300 (depending on desired connection capacity) residents can get a high quality fiber Internet connection with no additional charges for 10 years. KC Fiber is not your ordinary ISP, coming from the data center world where it does business as Data Shack. We discuss how this background makes it easier for KC Fiber to offer the gigabit at no ongoing cost in our interview. Read the rest of our coverage of North Kansas City.
In Idaho, Ketchum appears to have abandoned its flirtation with a municipal fiber optic network, choosing instead to lay conduit as a way to encourage private investment. The decision is an interesting result that suggests incumbent Cox Communications has considerable power over local decision making.
Readers may recall how in May 2013 the local broadband advisory committee booted Cox representatives off the roster. Residents began to receive telephone calls which amounted to push polls from the incumbent cable provider; the then-Mayor would would have none of that. Even though communities leaders had not stated they were considering a municipal network, they were put off by Cox's underhanded approach.
Since then, the administration has changed and it appears this time Cox has successfully shanghaied the decision. Cox is back on the committee establishing a plan and pressing for the result we would expect. From a Mountain Express article:
Guy Cherp, vice president of operations for Cox Communications, was part of the strategic planning committee. He said the group concluded that the city should not become a public Internet provider, as the cost would be exorbitant and high bandwidth is not needed by most Wood River Valley businesses. Those who desire it, he said, can pay for private installation—and several local businesses do.
Ketchum’s Internet service is as good as it is anywhere, Cherp said—speaking to the 2013 Magellan report, which stated that traditional broadband users complained of inconsistent speed and reliability, as well as slower service during peak Internet times.
“The notion that Ketchum is lagging behind, we don’t see that,” he said.
When a community invests in a municipal broadband network, it often does so because it hopes to reap economic benefits from the network. Many people and organizations have explored the positive relationship between municipal Internet networks and economic development, including a White House report published in January 2015. Municipal networks create jobs by ensuring businesses have fast, affordable, and reliable Internet access; the old DSL and cable networks just don't cut it. These networks improve the productivity of existing businesses and attract new businesses to communities, allow individuals to work from home more effectively, support advanced healthcare and security systems, strengthen local housing markets, and represent long term social investments in the form of better-connected schools and libraries. They also create millions of dollars in savings that can be reinvested into local economies.
"Upgrading to higher speed broadband lets consumers use the Internet in new ways, increases the productivity of American individuals and businesses, and drives innovation throughout the digital ecosystem." - Executive Office of President Obama
When municipalities choose to deploy fiber networks, they introduce Internet services into the community that are not only significantly faster than DSL and cable, but more reliable. With more reliable fiber connections, businesses and individuals are far less likely to experience temporary blackouts that can halt productivity in vexing and expensive ways. And because these networks are locally-owned and operated, business owners do not have to spend hours on the phone with an absentee Internet Service Provider like AT&T in the (albeit unlikely) event of a problem.
We at the Institute for Local Self-Reliance have catalogued numerous examples of economic development achievements that have occurred as a result of local governments deploying a municipal broadband network. Below, you can find a wide range of articles, studies, anecdotes, and other resources that speak to the economic successes enabled by municipal networks, organized by topic:
Look no further than Morristown, Tennessee, for an example of job creation thanks to municipal fiber. The city took advantage of its local electrical utility, Morristown Utility Systems, to provide gigabit speeds, and businesses jumped at the opportunity. In 2013, Oddello Industries, a furniture manufacturer, brought 228 jobs to the community after investing in a $4.4 million site expansion in Morristown. More recently, a call center looking to relocate to the city was wowed by the municipal utility’s offer to install fiber for free because the city valued the future economic benefits the call center would bring to Morristown over the cost of the fiber installation.
Our economic development fact sheet outlines several of the job creation opportunities that have resulted from municipal networks.
In 2012, Spirit Aerosystems opened up a new manufacturing facility in Chanute, Kansas, creating 150 jobs that require high quality broadband Internet.
HomeServe, a home repair company, expanded its call center to 140 employees because of Chattanooga, Tennessee’s robust municipal broadband infrastructure; in Chattanooga, HomeServe employees could get faster residential service than executives had in the company's Miami headquarters.
In 2015, Hardide Coatings, a surface coating manufacturer located in Henry County, Virginia, that relies on the municipal broadband provider MiNet, added 29 high-paying jobs to the local economy.
"You can't grow jobs with slow Internet." - Stephanie Rawlings-Blake, Mayor of Baltimore
The Dalles, Oregon, received a much-needed economic boost in the form of 200 jobs and millions of dollars in tax revenues when Google invested $1.2 billion in a data center that used the city’s municipal fiber network, Q-Life.
A new data center in Dawsonville, Georgia, created 12 high-paying jobs and expanded the local tax base thanks to the municipally-owned North Georgia Network.
Increased competition in Chattanooga, Tennessee, due to the city’s powerful municipal fiber network, induced Comcast to bring 150 new jobs to town.
The city of Mount Vernon, Washington has two things in common with our country’s first president, but unlike George, it boasts an impressive municipal broadband network that has attracted high-tech businesses. For example, a digital legal firm, Blank Law, relocated from Seattle to Mount Vernon in order to take advantage of faster speeds offered by the city’s municipal broadband network. While high-speed Internet was not the only reason Blank Law cited for choosing Mount Vernon over other towns (other reasons include quality of life and free parking), it played a significant role. Fiber is rarely the sole reason for a relocation, but it can often be a deciding factor.
Zeyuan, a Chinese wood floor manufacturer, and GOK International, a Chinese furniture assembly plant, built manufacturing centers in Danville, Virginia, knowing they would benefit from connecting to the city’s municipal broadband network.
"It's almost a feeling of disbelief when we tell companies today we can provide a gig to your business and to your house...These companies want to go where they can see the gig service." - Marshall Ramsey, President of the Morristown, Tennessee Chamber of Commerce
Pixel Magic, a visual effects producer, and Tapes Again, a media reproduction and processing company, both set up shop in Lafayette, Louisiana to support the state’s burgeoning film industry — and access to the municipally-owned LUS Fiber greatly facilitated these activities.
Faneuil, a customer care center, and SPARTA Inc., a defense contractor, were attracted to Martinsville, Virginia in large part because of the city’s municipal network, MiNet.
In the small Minnesota town of Gibbon, the fiber network from the RS Fiber Cooperative convinced the owner of Advocate 3D to take up residence in town where the family could live the small-town life but the business could still obtain the high-speed, reliable connectivity they needed for their 3D printing business.
Municipal networks serve existing businesses and keep critical jobs in town:
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The small Minnesota town of Windom nearly entered crisis mode when Fortune Trucking, a local company that employed 47 people in a town of 4,600, announced that slow Internet speeds might force it to leave town. Although the company’s headquarters were located a mile outside of the Windom’s jurisdiction, community members successfully lobbied to bring municipal fiber to Fortune, saving those jobs and stabilizing the local economy.
Alpha Natural Resources, a coal mining company, stayed in Bristol, Virginia, thanks to the BVU municipal fiber network
When the city of Princeton, Illinois set up a municipal broadband network, it kept 300 jobs in the community with the global industrial machinery company, Ingersoll Rand.
"Municipal broadband can be a powerful lever against the digital divide that condemns people to the isolation and reduced economic opportunities experienced by many of our low-income, disabled, and people of color community members" - Kshama Sawant, Seattle City Councilmember
In this Podcast, Chris speaks with Curtis Dean of Iowa Municipal Utilities about the prevalence of municipal networks in that state, focusing in on economic development results starting at 11:10. Dean highlights Hansen’s Clothing, a high-end men’s clothing manufacturer in Spencer, Iowa that expanded its online business exponentially when it connected to the municipal broadband network.
Municipal networks support home-based productivity:
In 2010, DirecTV announced the creation of a virtual call center, allowing 100 residents in southwestern Virginia to work from home, relying solely upon municipal broadband access.
150 home-based English teachers in Powell, Wyoming were connected to students in South Korea by the Korean venture capital firm, Skylake Incuvest; this unorthodox pairing was made possible by Powell's investment in FTTH.
Medical companies Ohio Health and Cardinal Health; Battelle Memorial Institute, a non-profit that relies on quantum computing to encrypt information; and numerous educational facilities use Dublin, Ohio’s municipally-owned fiber network, Dublink, for their healthcare, education and research needs.
"We are embarking on new initiatives with our local school district and regional colleges and universities to leverage broadband and to facilitate discussion between schools and the business community to strengthen, retain and attract quality workforce" - Dana McDaniel, Deputy City Manager of Dublin, Ohio
Lakeland, Florida invested in dark fiber community infrastructure, and has since reaped the rewards; the Florida Polytechnic University and Lakeland Regional Health, a medical center, both rely on the network for their operations. (Jump to 16:30 of the Broadband Bits Podcast for more details).
Municipal networks initiate tech booms and incubate start-ups:
"...in the 21st century, in this age of innovation and technology, so much of the prosperity that we're striving for, so many of the jobs we want to create, depend on our digital economy" - President Barack Obama, Speech at Cedar Falls Utilities
One Bay Area city, San Leandro, has used a city-owned fiber conduit to rival Silicon Valley tech companies, and now houses the world’s largest cluster of 3-D printing firms, along with the Westlake / OSIsoft Technology Complex, a tech campus.
The city of Dublin, Ohio, is home to the Dublin Entrepreneurial Center, a combination start-up incubator and data center located in the city’s metro center offices that now lists more than 80 tenants.
In the town of Spanish Fork, Utah, a municipal network is responsible for community savings of $2 million annually, as well as local government revenues exceeding $1 million, which can be used for community projects and initiatives.
Howard County, Maryland, has seen significant public savings (of up to $3 million a year) and impressive technological advances in its school system since switching to municipal broadband services.
Municipal networks increase home values:
Housing prices increased by 50 percent in one year when Google decided to locate a data center in the city of The Dalles, Oregon, in 2006 on account of its advanced technological infrastructure and high-speed municipal broadband access.
Another study, this by the Fiber-To-The-Home Council Americas in conjunction with researchers from the University of Colorado, showed that single family homes that can boast a FTTH connection are worth, on average, 3.1 percent more than their fiberless counterparts.
This White House report (which, by the way, utilized ILSR data!) finds that the existence of municipal networks and the market competition that these networks stimulate has tremendous economic benefits for local businesses and communities. The 37-page report highlights the successes of Chattanooga, Tennessee; Wilson, North Carolina; Lafayette, Louisiana; Scott County, Minnesota; Leverett, Massachusetts; and the Choctaw Nation Tribal Area in Oklahoma.
The New York Times highlights municipal fiber in a recent article: “For the Tech Savvy With a Need for Speed, a Limited Choice of Towns With Fiber.”
A report by the Government Accountability Office (GAO), “Federal Broadband Deployment Programs and Small Business,” argues that municipal broadband access positively affects small businesses by allowing them to streamline operations and improve efficiency.
Why do many municipal broadband networks end up being built in conservative districts, crossing political lines? Jim Baller, Joanne Hovis, and Ashley Stelfox of the Coalition for Local Internet Choice, in conjunction with Broadband Communities’ Masha Zaegar, argue that job creation and economic development is the “killer app” for local fiber networks.
Robert Pepper, Vice President of Global Technology Policy at the multinational tech company, Cisco, published an op-ed in The Huffington Post, which highlights the need for universal broadband adoption. Read: The Key to Social and Economic Development? Broadband Adoption.
"The message to policymakers is clear: If you want to increase economic growth, focus on broadband." - Robert Pepper, Vice President of Global Technology Policy at Cisco
Corporate site selectors have been placing more and more emphasis on broadband Internet access as they look for locations in which their companies can thrive. For more on this, read: “The Importance of Broadband to Economic Development.”
Does Broadband Boost Local Economic Development? ask researchers at the Public Policy Institute of California. They find that broadband access has a statistically significant economic benefit in the fields of business management, utilities, and technology.
A Novermber 2016 report from the consulting firm Analysis Group and funded by Fiber-to-the-Home council shows how competition drives lower prices and better download speeds for everyone. Specifically, the report focused on markets with Gigabit service.
Chris interviews Michael Curri, President of Strategic Networks Group, an organization that provides technical advice regarding broadband Internet to both firms and municipalities; Curri indicates a multiplier effect of ten times - meaning a return of $10 for every dollar invested where economies effectively utilize broadband.
Many communities, like Bozeman, Montana, view municipal broadband as a potential economic growth model that will allow them to catch up to other cities that have embraced high-speed Internet access; in this Community Bits Podcast, Chris speaks with Brit Fontenot, Economic Development Director for the city of Bozeman; David Fine, Bozeman Economic Development Specialist; and the President of Hoplite Industries, Anthony Cochenour.
"Having the infrastructure in place around technology, as well as the asset of this really historic and charming downtown, is a really interesting intersection and I think a lot of people are drawn to that." - Kimberly Van Dyk, Director of Planning and Community Revitalization of Wilson, North Carolina
A Knoxville news station, WBIR, covers Chattanooga's municipal network, focusing on the economic opportunities it has created - opportunities that Knoxville has missed out on because of its lack of high-quality service.
A feasibility study conducted by the Lubbock Power & Light (LP&L) Electric Utility Board this April discussed several potential benefits of installing a fiber optic cable in the City of Lubbock, Texas. Charles Dunn, a member of the Utility Board, proposed installing fiber optic cables alongside the city’s utility lines, which are currently being buried underground as part of a three-phase, $1.9 million downtown redevelopment initiative.
A fiber optic cable, Dunn contended, could increase Internet speeds hundredfold (from a max speed of around 10 Mbps to one above 1 Gbps), attract high tech companies to the city, and induce Texas Tech University students to stay in Lubbock after they graduate. In Lubbock, where Internet speeds run about 35 percent slower than they do in the rest of the state, a fiber network could be a boon for businesses and residents alike.
According to the April feasibility study, the fiber project might not even eclipse $100,000. LP&L would shoulder the costs of the project by drawing from its own budget. Both Dunn and LP&L director of electric utilities, David McCalla, believe that fiber would greatly benefit the community.
CEO of McDougal Companies, Marc McDougal, also argued in favor of the installation of the cable. From Fox 34 News:
Quite honestly, it would give us something that very few cities have... It would give us a huge advantage in another market to recruit businesses for downtown Lubbock.
Changes in leadership in Chanute have put the community's FTTH plan in suspended animation. In April, the City Commission decided to delay financing shortly before the scheduled bond sale. It is unfortunate that residents and businesses will lose the opportunities the fiber deployment would bring. Nevertheless, they deserve the right to make their own choices, good or bad.
The community of Chanute deployed a network incrementally with no borrowing or bonding in order to improve efficiencies, save public dollars, and control connectivity for municipal facilities. Local schools and colleges, struggling to compete, began taking advantage of technology in the classroom and expanded distance learning. The network eventually created a number of economic development opportunities when community leaders started providing better connectivity to local businesses. We told Chanute's story in our 2013 report "Chanute's Gig: One Rural Kansas Community's Tradition of Innovation Led to a Gigabit and Ubiquitous Wireless Coverage."
Chanute made history when it was the first municipality in Kansas to obtain permission from the Kansas Corporation Commission to issue bonds for the project. They also became the first municipality in the state to seek and receive "eligible telecommunications carrier" (ETC) status. Chanute was awarded over $500,000 in Rural Broadband Experiment Funds from the FCC. Whether or not they will still be able to take advantage of those funds remains a question. After taking action and putting so many of the necessary pieces in place, it is disheartening to see the plan abandoned by politicians.
Regardless of the future of the FTTH project, Chanute has the infrastructure in place to encourage more economic development, connect community anchor institutions, and allow the community to control its own costs. The FTTH project is still a possibility.
When we talk to municipal network leaders about lessons learned, they often tell us that marketing is an area where they feel a particularly vulnerability. Whenever we see a great piece of marketing from a municipal network, we like to share it.
When Longmont rebranded its FTTH network under the name NextLight, they released this awesome video. Check it out!
For years, we have urged municipal networks to cooperate in various ways to lower costs. For instance, by building a shared middle mile network to aggregate their bandwidth and get a better deal due to the higher volume. So it came as a bit of a shock that Georgia Public Web has been helping many municipal networks in these ways for well over a decade. David Muschamp, President and CEO of Georgia Public Web (GPW), joins us for episode 156 of Community Broadband Bits to discuss what the member-owned nonprofit organization does to improve Internet access across the state.
GPW operates over 3000 miles of fiber connecting businesses and even entire communities. They operate a 365-24-7 network operations center and provide consulting, focusing particularly on the needs of the nearly 30 local governments that own the company.
As we have learned, communities with municipal networks have tended to be politically conservative. Nevertheless, conservative state level politicians have often supported measures to revoke local authority to encourage local Internet choice. Recently, Alabama State Senator Tom Whatley, a Republican from Auburn, expressed his support for local authority in AL.com.
Whatley introduced SB 438, which would remove service area restrictions on municipal providers and remove the currently restriction preventing other municipalities from providing voice, video, or Internet access services. As he notes in his opinion piece, the bill did not move beyond the Transportation and Energy Committee, but he also asserts that he will be back next year to press for the measure.
Auburn is near Opelika where the community has deployed a FTTH network to serve residents and spur economic development. If the restrictions are eliminated, Opelika could expand to Auburn and even other rural areas nearby.
Whatley makes comparisons to the strides America made with the national interstate system. He also acknowledges the way Chattanooga's network has transformed what was once described as the "dirtiest city in America." Whatley takes the same approach we encounter from many communities where, after failed attempts to entice private providers to serve their citizenry, eventually decided to take on the task themselves.
He writes:
As a Republican, I believe the private sector is usually the best and most efficient method for providing a service. But when private companies, for whatever reason, make a decision not to serve an area, we should not handcuff the people of that region if they decide to use a public entity to receive that service (in this case, broadband Internet) in order to compete today for the jobs of tomorrow.
Many communities feel like they are an island without proper connectivity but Islesboro, Maine, is literally an island... without proper connectivity. This week, we talk with Page Clason, Manager of the Broadband Internet Working Group for the island that is moving toward a fiber solution to expand high quality Internet access.
We discuss the differences between a mainland community and island life, the dynamic between full time residents and people who live on the island part of the time, and what Islesboro is doing to ensure everyone has high quality Internet access. We also touch on the discussions around how to pay for the fiber. We recently wrote about the vote to move forward with an engineering study and contractor search.
Communities all over Colorado have voted to reclaim local authority during the past year. Even though elected officials in Fort Collins are exploring the municipal network option, the City Council has yet to present the question to voters. Editors at the local news outlet, the Coloradan, recently expressed their support for a municipal broadband network, urging community leaders to let voters decide.
The Editorial Board focuses on the benefits Fort collins can expect from increased economic development, telemedicine capabilities, and relieved congestion from telecommuting. They see Internet access as one of the essential services cities provide such as water and electricity. The Editorial Board notes that city leaders have already budgeted $300,000 to create a strategic plan that includes community broadband.
The Board acknowledges that there are many unanswered questions - funding, cost, motivation for a deployment. Yes, questions need to be answered along the way, but it is time to move forward:
One hurdle is a 2005 state law that bans municipalities from starting their own telecommunications service, however, either a local vote or a federal waiver could override the law.
The time is now to sidestep the ban and approve municipal broadband.
