Muni Fiber and Politics

Miles Fidelman mfidelman at meetinghouse.net
Tue Jul 22 16:09:05 UTC 2014


Well yeah, the LECs would definitely come unglued.

But... first off, what do you mean by "free?"  Someone has to pay the 
capital and operating budgets - so if not from user fees, then from taxes.

So.. it's a nice thought, but not likely to happen.  Heck, have you ever 
seen a water utility that doesn't charge?

Now... having said that -- I could see something like this happen in 
California:

- California allows (maybe requires) that developers pay "impact fees" 
when building new houses -- i.e., the cost of a house, in a new 
development, may include $20,000+ to pay for new infrastructure - roads, 
waterworks, police and fire substations, schools, you name it - if you 
buy a new house, you pay for the full cost of the infrastructure behind 
it (built into the financing of course - first the construction 
financing, then the bridge financing, then ultimately the mortgage)

- I have seen some California communities at least toy with including 
conduit and fiber in master plans and requirements placed on developers 
- after all, it's needed to feed municipal buildings, street light 
control, and so forth - and better to have common-user conduit and fiber 
in the ground than have multiple people digging up the streets later - 
fyi: a street cut typically takes 1 year off pavement lifetime, unless 
very carefully repaved - practically nobody does a good job of 
permitting street cuts to avoid this - San Antonio being a really 
notable exception (I worked for a GIS firm that built their right-of-way 
management system - they were a real rarity in good right-of-way 
management practices)

- so I could see building the capital cost of a FTTH network into new 
housing (the same way water and phone wiring is standard) - but that's 
not free, and that still begs the question of who lights the fiber

- still, the LECs would come unglued (and have)!

Miles Fidelman


Aaron wrote:
> So let me throw out a purely hypothetical scenario to the collective:
>
> What do you think the consequences to a municipality would be if they 
> laid fiber to every house in the city and gave away internet access 
> for free?  Not the WiFi builds we have today but FTTH at gigabit 
> speeds for free?
>
> Do you think the LECs would come unglued?
>
> Aaron
>
>
> On 7/21/2014 8:33 PM, Miles Fidelman wrote:
>> I've seen various communities attempt to hand out free wifi - usually 
>> in limited areas, but in some cases community-wide (Brookline, MA 
>> comes to mind).  The limited ones (e.g., in tourist hotspots) have 
>> been city funded, or donated. The community-wide ones, that I've 
>> seen, have been public-private partnerships - the City provides space 
>> on light poles and such - the private firm provides limited access, 
>> in hopes of selling expanded service.  I haven't seen it work 
>> successfully - 4G cell service beats the heck out of WiFi as a 
>> metropolitan area service.
>>
>> When it comes to municipal fiber and triple-play projects, I've 
>> generally seen them capitalized with revenue bonds -- hence, a need 
>> for revenue to pay of the financing.  Lower cost than commercial 
>> services because municipal bonds are low-interest, long-term, and 
>> they operate on a cost-recovery basis.
>>
>> Miles Fidelman
>>
>> Aaron wrote:
>>> Do you have an example of a municipality that gives free internet 
>>> access to it's residents?
>>>
>>>
>>> On 7/21/2014 2:26 PM, Matthew Kaufman wrote:
>>>> I think the difference is when the municipality starts throwing in 
>>>> free or highly subsidized layer 3 connectivity "free with every 
>>>> layer 1 connection"
>>>>
>>>> Matthew Kaufman
>>>>
>>>> (Sent from my iPhone)
>>>>
>>>>> On Jul 21, 2014, at 12:08 PM, Blake Dunlap <ikiris at gmail.com> wrote:
>>>>>
>>>>> My power is pretty much always on, my water is pretty much always on
>>>>> and safe, my sewer system works, etc etc...
>>>>>
>>>>> Why is layer 1 internet magically different from every other utility?
>>>>>
>>>>> -Blake
>>>>>
>>>>>> On Mon, Jul 21, 2014 at 1:38 PM, William Herrin <bill at herrin.us> 
>>>>>> wrote:
>>>>>>> On Mon, Jul 21, 2014 at 10:20 AM, Jay Ashworth <jra at baylink.com> 
>>>>>>> wrote:
>>>>>>> Over the last decade, 19 states have made it illegal for 
>>>>>>> municipalities
>>>>>>> to own fiber networks
>>>>>> Hi Jay,
>>>>>>
>>>>>> Everything government does, it does badly. Without exception. There
>>>>>> are many things government does better than any private organization
>>>>>> is likely to sustain, but even those things it does slowly and at an
>>>>>> exorbitant price.
>>>>>>
>>>>>> Muni fiber is a competition killer. You can't beat city hall; once
>>>>>> built it's not practical to compete, even with better service, so
>>>>>> residents are stuck with only the overpriced (either directly or via
>>>>>> taxes), usually underpowered and always one-size-fits-all network
>>>>>> access which results. As an ISP I watched something similar 
>>>>>> happen in
>>>>>> Altoona PA a decade and a half ago. It was a travesty.
>>>>>>
>>>>>> The only exception I see to this would be if localities were
>>>>>> constrained to providing point to point and point to multipoint
>>>>>> communications infrastructure within the locality on a reasonable 
>>>>>> and
>>>>>> non-discriminatory basis. The competition that would foster on the
>>>>>> services side might outweigh the damage on the infrastructure side.
>>>>>> Like public roads facilitate efficient transportation and freight
>>>>>> despite the cost and potholes, though that's an imperfect simile.
>>>>>>
>>>>>> Regards,
>>>>>> Bill Herrin
>>>>>>
>>>>>>
>>>>>> -- 
>>>>>> William Herrin ................ herrin at dirtside.com bill at herrin.us
>>>>>> Owner, Dirtside Systems ......... Web: <http://www.dirtside.com/>
>>>>>> Can I solve your unusual networking challenges?
>>>
>>
>>
>


-- 
In theory, there is no difference between theory and practice.
In practice, there is.   .... Yogi Berra



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