Fast, affordable Internet access for all.
financing
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Presentation and Panel Discussion about Community Broadband
Craig Settles kicks off this event with a 45 minute presentation discussing what community networks should do to succeed financially and how they can go beyond simply making broadband access available to more people. Bryan Sivak, Chief Technology Officer of the District of Columbia; Joanne Hovis, President-Elect of NATOA and President of Columbia Telecommunications Corporation; and Gary Carter, Analyst at City of Santa Monica Information Systems Department responded Craig Settles' presentation. One of the key points is something we harp on here: if community broadband networks run in the black according to standard private sector accounting procedures, that is great. But it is a poor measure of how successful a community network is. Community networks create a variety of positive benefits that are not included in that metric and those benefits must be considered when evaluating such a network.
UTOPIA Confronts Critics, Continues New Strategy
The Utah “Taxpayers” Association thought it would get an upper hand with a BBQ in Orem just before the city council voted on a new construction bond.
ECFiber Launches Pilot Project
The pilot project will provide a solid foundation for the capital lease used to build out the rest of the network, providing 100% coverage in 23 towns in East Central Vermont. While the intent of the project is to prove that the larger project is viable, according to Nulty, “it will be able to stand on its own if we don’t raise another dime of capital.”The project is expected to cost some $80 million in total to cover the 23 participating towns. ECFiber has already obtained the necessary permissions from the State to offer video and telecommunications services. The Pilot Project targets the town of Bethel, where the central hub for the entire network is located. ECFiber is one of many groups that are using a nonprofit ownership model to build the network. The towns work together to create a nonprofit that will finance, own, and operate the network to ensure community needs are put before profits -- now and in the future. Update: The pilot project will only offer broadband and phone services due to the high fixed cost of trying to offer video services for such a small population.
Cedar Falls, Iowa, Upgrading Cable Network to FTTH
An HFC plant uses thousands of active devices (such as amplifiers) to keep data flowing between the customer and the service provider. Any one of these devices can fail, interrupting service. In contrast, the all-fiber plant will be a passive optical network, with no active components between the distribution center and the end user. Fewer “moving parts” means fewer points of failure and a more reliable system.CFU puts community needs first:
“We know from experience that economic growth comes to cities that keep their infrastructure up to date, whether it’s roads, water, electricity or broadband,” said Krieg [CFU General Manager]. “CFU is going to do what it takes to make sure Cedar Falls has leading-edge communications technology, and maintain economical rates for internet and video services.”The network was launched in 1996, one of the first communities with citywide broadband access.
Powell Buys FTTH Network From Itself, For Itself
Under the new agreement, Powellink will become a fifth enterprise for the city, joining the electric, water, waste water and sanitation enterprises. The other four enterprises will loan Powellink the $6.5 million, and payments from service providers using Powellink — such as TCT — will go back to the enterprises to pay off the loan.City Administrator Zane Logan had previously told me that he thought Powellink was a much better approach to attracting jobs to the area than the approach frequently used by communities - tax breaks to companies in return for creating jobs. In the Powell Tribune article, he explained how this approach allows Powell to be more self-reliant.
Logan said he believes the new agreement will help Powell during a difficult economic climate. The state cut its funding of cities and towns this year, and sales tax revenues are down. “We’re trying to help ourselves and not be dependent on the state,” he said. “The Legislature is saying cities need to take care of themselves, and I like to think that Powell is doing that.”Local cooperative TCT had the right to another four years of exclusive operation as the sole service provider but gave that up, meaning the network will now be open access. In return, TCT does not have to guarantee revenue to the City (as it agreed to do in each year it was an exclusive service provider). These changes come about as Cablevision bought Bresnan, the cable incumbent that had radically lowered rates to compete with Powellink. It will be interesting to see how Cablevision continues or changes company policy in Powell.
Photo courtesy of Ernie Bray
Brigham City Develops Alternative Method to Finance Publicly Owned FTTH
100 Mbps to everyone for $350 billion
Want to provide 100-Mbit/s broadband service to every U.S. household? No problem: Just be ready to write a $350 billion check. Federal Communications Commission (FCC) officials shared that jaw-dropping figure today during an update on their National Broadband Plan for bringing affordable, high-speed Internet access to all Americans. The Commission is schedule to present the plan to Congress in 141 days, on Feb. 17.Don't get me wrong, I agree that $350 billion is a lot of money. On the other hand, we spent nearly $300 billion on surface transportation over 4 years from 2005-2009. $350 billion buys a fiber-optic network that will last considerably longer. Additionally, such a network will generate considerably more revenue than a highway. In fact, these networks will pay for themselves in most areas if they can access to low-interest loans. Consider the comments of Deputy Administrator Zufolo (of the Rural Utilities Service) from my recent panel at NATOA:
Zufolo explained the RUS decision to use its $2.5 billion in funds primarily to subsidize loans and not provide grants, as the agency's best opportunity to make the more efficient use of the federal money and have maximum impact. Because the default rate on RUS loans is less than 1% and the subsidy rate is also low, only about 7%, it costs the government only $72,000 to loan $1 million for rural network development, she said.Let's say that RUS decides to embark on getting 100 Mbps to everyone in a rural area - some of the projects will be riskier than the standard portfolio, so let's assume it costs the federal government $100,000 to loan $1 million (makes it easier math too). In order to spur the $350 billion investment for these networks, the government would have to put up $35 billion.