Out on the coast of the great state of Washington, community networks are making waves. Orcas Island residents recently made headlines with their homegrown wireless network, and Mount Vernon’s fiber network previously appeared in the New York Times. Now, the city of Anacortes is considering its options.
Anacortes: Fiber-to-the-Home?
The city is negotiating with an engineering firm to develop a fiber network that best provides connectivity for the 16,000 residents. The engineering firm is expected to present to the city council next on November 16th.
Public Works Director Fred Buckenmeyer estimates the cost of fiber optic installation at about $15 million. The city of Anacortes has applied for a $375,000 grant from Skagit County to help pay for the construction, but the city would likely need a take-rate (homes to subscribe to the network) of 35 - 40% to break even on the project.
Mount Vernon: Open Access
Anacortes’ plan is rather distinct from that of its neighboring community Mount Vernon. The network in Mount Vernon is an open access fiber available to government and local businesses, not residents, in Mount Vernon, Burlington, and the Port of Skagit.
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.
As in the recent testimonial from Opelika Mayor Gary Fuller, Mayor Boudreau described how Mount Vernon's network has created a quality of life where high-tech has enhanced local medicine, encouraged new businesses, and created and environment rich with competition.
Mount Vernon's open access network provides infrastructure for nine service providers. Some of these providers offer services only to businesses, while others also serve government, retail providers, and specific industries such as the medical community. Hundreds of public and private customers receive fast, affordable, reliable connectivity through these providers and the city's publicly owned network.
We first introduced you to Mount Vernon in 2013. The community began deployment in 1995 and have added incrementally to the network to serve nearby Burlington and the Port of Skagit. Government facilities, schools, hospitals, and businesses save millions while utilizing top-notch technology. Businesses have relocated to the area to take advantage of the network and enjoy the high quality of life in the relatively affordable area with its abundance of outdoor recreation.
Mayor Boudreau recognizes that Mount Vernon's success may not be easy to come by for every community but believes each should have the ability to decide that for themselves. She writes:
A group of municipal leaders and their private sector small ISP partners submitted an ex parte filing with the FCC today stating that they see no reason to fear Title II reclassification of Internet access. The statement, signed by a variety of towns and providers from different areas of the country is reproduced in full:
Dear Chairman Wheeler,
As a group of local governments and small ISPs that have been working to expand the highest quality Internet access to our communities, we commend you for your efforts to improve Internet access across the country. We are committed to a free and open Internet without blocking, throttling, or discriminating by ISPs.
As local governments and small ISPs, we wanted to ensure you are aware that not all local governments and ISPs think alike on matters like reclassification. For instance, on July 18, 2014, the mayors of New York City; Portland, Oregon; and San Francisco called on you to issue the strongest possible rules to guarantee Net Neutrality. Each of these communities is also taking steps to expand and improve high quality Internet access to their businesses and residents.
Our approaches vary but are already resulting in the highest level of service available because we are committed to expanding high quality Internet access to supercharge local economies and improve quality of life. We have no interest in simply replicating older triple play model approaches. We want to build the infrastructure of the future and we see nothing in the proposed Title II reclassification of Internet access that would hinder our ability to do that. As Sonic CEO Dane Jasper has strongly argued, ISPs that don’t want to interfere with their subscribers’ traffic should expect a light regulatory touch.
We thank you for your leadership during this difficult period of transition. We understand that many of our colleagues have trouble trusting the FCC given a history that has, in many cases, ignored the challenges small entities face in this industry. But whether it has been increasing the speed definition of broadband, or calling for the removal of barriers to community networks, we have been impressed with your willingness to take on powerful interest groups to ensure the Internet remains a vibrant, open platform.
We look forward to working with you to ensure that future rules recognize the unique challenges of small providers and innovative approaches to expanding access.
Over the past few months, Chris has been globe trotting to communities giving presentations and learning more about municipal networks across the country. After spending some time in Seattle, he headed to Mount Vernon, Washington to present at the Connect with the World conference on October 9th.
The event took place at Skagit College and included other speakers such as Craig Settles, Susannah Malarkey, and Mark Anderson. The video of his presentation is now archived and available to view.
Mount Vernon has operated its open access fiber network since 1995, serving public facilities and local businesses. We spoke with Kim Kleppe, Information Systems Director, and Jana Hansen, Community & Economic Development Director, in episode 38 of the Community Broadband Bits podcast.
As our readers know, Seattle has pursued better connectivity for some time and the idea of publicly owned infrastructure is not a new idea in the Emerald City. Chris will be presenting his thoughts on the possibility of a municipal network.
The next day, Chris visits Mount Vernon for the Connect with the World event. The October 9th conference focuses on creating a tech friendly environment for economic development, better educational opportunities, and improved healthcare. The full agenda [PDF] is available online and registration is still open. The program runs from 10 a.m. - 3:30 p.m. at Skagit Valley College.
Mount Vernon's open access network provides an infrastructure for several ISPs. The network slashes the community's telecommunications costs and attracts employers in fields such as healthcare, aerospace, and engineering. The network also serves the communities of Burlington and the Port of Skagit.
In the wake of the Comcast Time Warner Cable proposed merger, an increasing number of local communities across the country are expressing their dissatisfaction with their broadband options. The Concord Monitor recently published an editorial suggesting the community prepare for publicly owned fiber.
Concord's main street will soon be excavated; the Monitor recognizes that this creates an excellent opportunity to adopt a dig once policy. As we know from places such as Sandy, Oregon and Mount Vernon, Washington, dig once policies accompanied with intelligent conduit policies can make a significant impact. Deployment costs less and happens faster when the network's foundation already exists.
The Monitor notes that the merger underscores the importance of municipal networks to protect affordable access:
The companies serve different geographic regions, so proponents of the merger claim prices won’t increase. The flip side of that, of course, is that prices won’t go down because the two companies won’t compete against each other for future business. The merger needs regulatory approval and may never happen. But other factors suggest the city should, as technology expert Susan Crawford suggests, see high-speed internet service as a basic utility like the provision of electricity or water.
Crawford is the author of the new book Captive Audience: The Telecom Industry and Monopoly in the New Gilded Age.
“Truly high-speed wired internet access is as basic to innovation, economic growth, social communication and the country’s competitiveness as electricity was a century ago,” Crawford contends in the book, “but a limited number of Americans have access to it, many can’t afford it, and the country has handed control of it over to Comcast and a few other companies.”
Plan on spending Thursday, October 9 in Mount Vernon, Washington. Chris will speak with three other experts on creating a local environment attractive to the tech industry.
The "Connect With The World" event will occur at Skagit Valley College's MacIntyre Hall from 10 a.m. - 3:30 p.m. PDT. Other speakers will be:
Mark Anderson: One of FORTUNE's “100 Smartest People We Know,” Mark is a frequently sought after speaker around the world. His long- running weekly newsletter, Strategic News Service (SNS), counts a stellar readership, including the likes of Michael Dell, Bill Gates and Steve Ballmer.
Susannah Malarkey: Executive Director of the Technology Alliance, a statewide organization of leaders from technology businesses and research institutions dedicated to Washington’s long-term economic success.
Craig Settles: Municipal broadband expert for journalists at CNN, the Wall Street Journal, New York Times, Time Magazine and a host of business, technology and local media outlets.
Mount Vernon's municipal open access fiber network serves public entities and businesses within the City, in nearby Burlington, and in the Port Skagit area. The community began the project in 1995 and developed the network incrementally. We spoke with Kim Kleppe, Information Systems Director, and Jana Hansen, Community & Economic Development Director, in episode 38 of the Community Broadband Bits podcast.
For more on the event, contact Jana at (360)336-6214 or email her at: janah@mountvernonwa.gov.
In a recent New York Times article, reporter Kate Murphy shined a light on fiber's increasing role in economic development. Murphy discussed several of the same networks we have followed: Wilson, NC; Chattanooga, TN; Lafayette, LA; and Mount Vernon, WA.
Murphy acknowledged that successful companies are moving from major metropolitan areas to less populated communities out of necessity:
These digital carpetbaggers aren’t just leaving behind jittery Netflix streams and aggravating waits for Twitter feeds to refresh. They are positioning themselves to be more globally competitive and connected.
Murphy notes that countries where governments have invested in critical infrastructure offer more choice, better services, and lower rates. She also points to successful local initiatives, often in less populated communities where large private interests have not invested:
Stepping into the void have been a smattering of municipalities that have public rather than private utility infrastructures. Muninetworks.org has a map that pinpoints many of these communities. They are primarily rural towns that were ignored when the nation’s electrical infrastructure was installed 100 years ago and had to build their own.
Murphy spoke with several business owners that moved from large metropolitan areas to smaller communities because they needed fiber. For a growing number of establishments, fiber networks are the only kind that offer the capacity needed for day-to-day operations. Information security firm, Blank Law and Technology, moved to Mount Vernon to take advantage of its open access fiber network. It helps when customer service representatives live in your neighborhood:
More communities now embrace "dig once" policies to facilitate installation of future and current networks. The idea is to be mindful of trenching for transportation and utility projects and encourage collaboration between agencies. However, this is implemented in a variety of ways, some more effectively than others. By establishing requirements for conduit installation in development codes, communities can save big dollars if they build or expand a network in the future.
Communities such as Sandy, Oregon, and Mount Vernon, Washington, have instituted such policies. Both communities require private developers to install conduit when disturbing existing roads or building roads for new subdivision construction. Conduit itself is inexpensive and the digging is already done, so the added burden is light.
Both of these communities have plans, including maps, that allow them to be strategic in where they require conduit to be placed. They are not simply adding conduit blindly, though that policy may be better than doing nothing at all (experts are divided on the matter).
In Sandy, the code change (see Sec. 17.84.60) was a simple expansion of existing policy. The city added "broadband (fiber)" to the list of public facilities, such as public water, sanitary sewer, and storm drainage. Underground communication lines join a list of other required improvements that are to be installed in new developments at no expense to the city. Other items on that list include drainage facilities, mailbox delivery units, street lights and a underground power lines. (see Sec. 17.100.310).
Anticipated connectivity raises the value of new homes and makes them more attractive to today's buyers. Scott Lazenby, City Manager in Sandy, spoke to us for a recent podcast and told us how a developer in the area is excited about the potential. SandyNet plans to offer 100 Mbps Gbps residential service via the new conduit at an incredibly low $40 per month; the developer sees that as a major selling point.
