The last time we reported on SMBS is was August. It was a lot hotter and fiber in the area was still more of a promise than a reality. Well it’s much colder now – but the fiber is getting hotter. The Worthington Daily Globe has been fantastic about getting local citizens excited about broadband with regular updates; last week they reported…
By the end of January, about 300 Lakefield residents will enjoy a range telecommunication services powered by fiber-optic cables.
U-reka Broadband was instrumental in helping SMBS get a grant worth $12.7 million grant from the U.S. Department of Agriculture. Here’s the project description from the grant application…
The city of Windom, Minn., a member of the Southwest Minnesota Broadband Group (SWMBG), will provide Fiber-To-The-Premises (FTTP) infrastructure to eight rural communities in southwestern Minnesota. SWMBG includes the communities of Jackson, Lakefield, Windom, Round Lake, Bingham Lake, Brewster, Wilder, Heron Lake, and Okabena. The network will consist of a 125-mile fiber ring that will connect the communities to the Windomnet network and an FTTP infrastructure within the communities. The ring will be 96 strands with a 1-gigabyte transport network that is easily upgradeable to 10 gigabytes.
As the Worthington Daily Globe reports, Lakefield is already seeing connection. Unfortunately construction has slowed for the cold weather, but the other communities will be seeing progress again this spring…
As the majority of the customers in Lakefield are already connected to their options of Internet, voice, and/or cable TV, Olsen explained that installation in Round Lake started Wednesday.
“We’re installing for the Round Lake mayor today (Wednesday),” he added. “The little thing called winter showed up, but we will kick off construction again in April for Heron Lake, Brewster and Bingham Lake. By September, we’re hoping to have our first round of construction completed. There’s an ongoing need and want for the service.”
Thanks to Diane Wells of the Department of Commerce for sharing Mr. Friedman’s op-ed today. He titles it “So Much Fun. So Irrelevant.” And as I finished it I thought “So True.”
According to Mr. Friedman, two things have struck him about the candidate debates so far. One, they were entertaining, but, two, they were disconnected from the 21st century realities of a new job market. The reality, according to the columnist, is a merger between globalization and information technology, which thanks to the hand held computers, social networks and the ‘cloud’ is empowering a new wave of creativity and innovation. Mr. Friedman talks of “ecosystems” and says “The best of these ecosystems will be cities and towns that combine a university, an educated populace, a dynamic business community and the fastest broadband connections on earth. These will be the job factories of the future.”
Gee, with the exception of that fastest connections thing, sounds rather familiar, doesn’t it? We could be that ecosystem in the greater Twin Cities area and feed it with all kinds of creativity and innovation from the rest of the state if we could tackle that fastest connections thing with some comprehensive real action. You can find the article online and contains quotes from Blair Levin that will rile our rural side. Read at least some of the comments too. Please give it a look and let us know your opinion. Maybe this is our rally cry.
Changes are happening in the telecom landscape again with the purchase of Idea One Telecom by Hickory Tech, giving their growing network a reach into the healthy Fargo-Moorhead market and increasing the value of their backbone. Good for them.
Challenges are surfacing in the form of lawsuits filed in different federal courts to the FCC’s Order on USF/ICC that will result in a lottery for which circuit will hear the cases. The NTCA filed their contention that the Order exceeds the authority of the Commission and the Pennsylvania Public Utilities Commission filed also stating that the state’s authority is being usurped. The ITA, MTA and WSTA are all scheduling workshops to help their members understand and comply with the changed and additional compliance requirements that will go into effect regardless of the status of the suits. We will be attending at least one of these sessions in our continuing effort to keep up with the regulatory and legal ramifications of the move to a broadband based support system.
The FCC is also holding workshops on the demise of the PSTN—the Public Switched Telephone Network—which policymakers discuss as if it had died already and providers find very premature. So far the workshop panels have raised a lot of questions but offered little in the way of solutions for moving to an IP based new network. We’re watching this with interest too.
We also assisted the Commerce Department with the collection of information on the status of MN’s stimulus projects which we found interesting. Several of the projects have made impressive gains this year. As soon as the updates become public we’ll share them with you.
We here wish all of you– wherever you are– a very, very happy holiday season!
Earlier this month, Governor Dayton announced the names of the newly formed Minnesota Broadband Task Force members. The group will need to work fast to meet some of the deadlines on their plate. According to the Executive Order they have until December 30 to inventory, assess and report on the state of broadband in Minnesota. By January 31, 2012, they need to develop a Minnesota Broadband Plan outline, including strategies, tasks, action items, and recommendations.
Having been on the previous two task forces, U-reka Broadband Associate JoAnne John was asked by the Blandin on Broadband blog to offer advice to the new group…
The FCC voted 4-0 to adopt an order that will transform the high cost universal service fund into the Connect America Fund envisioned by the National Broadband Plan on October 27.
The details are sketchy, we haven’t seen the entire order, which is said to be 493 pages long, or over 500 depending on whose guess you read. But we do know from the remarks of Wireline Competition Bureau Chief Sharon Gillette that the following things are set to happen.
The fund will be “capped” at the current size of $4.5 Billion, but that cap is subject to review and will last six years before a formal review is set to occur. This is one of the compromise areas between the stakeholders who wanted a permanent cap and those who wanted no cap at all. Of this amount, $2B will remain with the rate of return (small) carriers, $1.8 will go to the price cap (large) carriers, $500 Million will go to wireless carriers for mobile broadband (plus a one-time extra boost of $300M to kickstart it), $100M will go to tribal lands for mobility connections and $100M for dedicated remote areas, presumed to go to satellite coverage for super remote households.
Broadband is again defined as at least 4Mbps down and 1Mbps upload speed. Price cap company support will be introduced in two phases, the first of which will freeze existing support but infuse an additional $300M to “expediently” deploy broadband to unserved areas. That’s good news for rural customers of larger companies. Phase two will “use a combination of forward-looking broadband cost model and competitive bidding”. That doesn’t sound like it includes the right of first refusal in the ABC plan.
Apparently the order will recognize the “unique nature” of small rural carriers and will attempt to maintain some level of stability for them and their customers and according to the executive summary, the small carriers are also required to deliver at least the 4Mbps service defined and must deliver it upon any “customers’ reasonable request”. There will most likely be some limits on capital and operating expenses, phasing out of support for areas with unsubsidized competitors (like cable companies) and a 3 year phase down to a $250 per line cap over 3 years. Carriers rate of return moving downward from the current 11.25% will likely involve a lengthy round of comments in the FNPRM to come.
Intercarrier compensation details are hard to find but the goal will be transition to a “bill and keep” framework that will end carrier to carrier payments entirely. This will happen in six years for the price cap carriers and nine years for rate of return providers. The rates are immediately capped and will be reduced to parity between intra- and inter-state rates by July 2013. There will be some sort of recovery system but again details are slim although we know that carriers will be allowed to charge an Access Recovery Charge of $.50 per month for residential and small business customers and $1 per month for multiple line businesses.
In the move to only one carrier per area receiving support, the competitive ETC support will be entirely phased out over 5 years. CETC is the fast growing section of current support that now totals over $1B a year.
We’ll keep looking at this as we learn more details from the order itself.
I was lucky enough over the last two weeks to be invited to celebration events for two of the stimulus projects that we wrote the Broadband Stimulus applications for. Two Saturdays ago I spent the day in Dawson, MN with the Lac qui Parle EDA, Farmers Mutual Telephone and Senator Amy Klobuchar for the kick-off of the project. It was great to see the momentum of the project built by the Lac qui Parle EDA through their Computer Commuter and the Blandin MIRC projects in the area. Construction has just begun this week and I am looking forward to following the success of the project.
The following week I was invited to a great event put on by Baldwin Telecom to celebrate the completion of the Town of Troy project in western Wisconsin. General Manager Larry Knegendorf hosted a wonderful evening of congratulations and recognition of all the parties involved in the process. From the very beginnings of the project discussion over ten years ago to the final partnership and negotiation that led to the successful stimulus application it is amazing how many iterations a project can go through before it is successful. Thanks Larry for letting me say a few words and congratulations to the Town of Troy, Baldwin Telecom and all of their contractors who have made the project a success.
As I think back to the process to get to the actual application there are a few lessons learned I wanted to share with everyone:
Know what you want-some communities want to have a voice and strategic role in the network, some just want to see it built. Know what your community wants and can sell not only to your boards but also your constituents.
Be willing to have some flexibility-the final agreement will probably not look exactly like you envisioned it. Take the time to educate yourself and understand the other sides needs before you dismiss them.
Know what you can bring to the table-is it access to rights-of-way, financial backing or other benefits for your partner.
Don’t forget it is a partnership-get to know your partner, not just from a work perspective but understand more about them. You are going to be spending a lot of time with these people, its much easier if you understand and like them!
JoAnne Johnson did a Blandin Webinar on broadband policy at the state and federal level last week, so it will come as no surprise that, yes, we think policy counts. Here’s what she says about it and here’s the link to the presentation from the Blandin Broadband site. http://broadband.blandinfoundation.org/resources/events-detail.php?intResourceID=1708
In the Webinar I briefly covered access charge reform/deregulation, statewide video franchising and broadband access and adoption on the state level. On the federal level, we discussed net neutrality, online sales tax and USF/ICC reform, which I think is likely to have the most influence on Minnesota’s broadband future.
USF is the Universal Service Fund, paid into by telecom companies and passed along to their customers at a rate set quarterly, currently 15.3%, that subsidizes telephone service in high cost and hard to reach areas. It also funds the eRate subsidies for schools and libraries and a similar program for healthcare communications. ICC is intercarrier compensation and refers to the payments companies make to each other to exchange and terminate traffic. The reforms have been talked about at the FCC for over 10 years, but since they play a large part of the National Broadband Plan, it’s likely the reforms will actually be acted upon this time on October 27 at the FCC’s open meeting.
The intent is to move the subsidy from voice communications to broadband and that sounds like something we want to have happen. It makes telecommunications companies, and I include all providers-telephone, cable and ISPs, nervous for several reasons. One reason this is so important to our state is something I had clarified at the recent MTA fall conference. I learned there that in a survey of over 60 rural phone companies in the state, it turns out that 44% of their revenue comes from USF. Another 25% comes from ICC. That’s an astounding 69% of the revenue that supports the companies that have given us an enviable rural service network but is obviously critical to their survival. So we’re going to watch this with strong attention over the next ten days and will do our best to keep our clients and the readers of this blog updated on potential consequences to our ambitions for a world class broadband environment in Minnesota.
Myself and JoAnne Johnson had the privilege of spending Monday and Tuesday of this week in Lacrosse, WI attending the WSTA show. As usual there are many changes for our Telecom companies across the border and while their issues are the same as many they also have their own unique nuances.
I attended an informative session about Telco 2020 and how the Independent Telecom market will look different than it is today. Of course to look at the future it is always good to look at the past and this was done with a great video by Corning and then numbers of the changing revenue landscape for Telecoms. It will not be surprising but local voice revenues have fallen from 2000-2o10 while Internet and Video revenues have gained. The key will be continue to increase revenue per subscriber as Internet services are starting to reach a saturation point.
Calix presented how a Telco might increase its revenue streams by becoming the IP manager for its residential customers. As customers continue to rely on that Internet pipe for more and more of their entertainment and information there is an opportunity for the local service provider to be the gatekeeper of that information and provide services such as data backup, systems management and repair services to both its residential and business customers.
Next I attended a session on Telework. Wisconsin Independents pointed to opportunity to mimic the type of legislation the Minnesota Telephone Association has proposed. Russ Berg of Wisconsin Independent Networks hosted a panel including representatives from United Health Care, Marshfield Clinic and Organic Valley to discuss their perceptions of Telework. Some important takeaways included:
United Health Group has over 29% of their full-time workforce doing telework (23,000 employees)
It is 1/3 of the cost to house a telework employee compared to an employee in a corporate office
Many organizations IT departments are virtual at least some of the time
By using Telework employees a company can expand its day while not exhausting its current work force. Marshfield Clinic shared that it has Radiologists in Hawaii who handle the after hours requirements for the Clinics
All said they required at least 3 Mbps up and 1 Mbps down, none said that they had enough bandwidth and would gladly take more
All struggle with keeping those Telework employees engaged with the office staff and had strategies to do so
All of them require the employee to spend some time within the organization before they are moved to Telework
To satisfy my technical inklings I spent time at the “Getting excited about IPv6″ session presented by Finley Engineering. While I spend too much time working on business models and strategy it is still fun to get back to the details. What I am happy about is that there are really smart companies like Finley who can help their customers. IPv6 will really open the ability to truly control a whole-house application whether that is energy management, security or controlling all of those electronic devices within our households. All of this can be done by creating subnets of addresses that will not interact with other subnets. This can create additional revenue opportunities and open up Machine t0 Machine communications.
Driving home I realized we have the same opportunity to drive revenue to the attendees as we have facilitated in Minnesota in the creation of public-private partnerships as we were successful in creating with Baldwin Telecom and Troy Township in western Wisconsin. We look forward to exploring those opportunities.
It’s that time of year for conferences and trade shows. You can catch us and our associates the week of October 9th at the following events:
Wisconsin State Telecommunications Association in Lacrosse October 10th and 11th. Looking forward to exploring broadband partnership opportunities with our neighbors to the east. Don’t forget we have already had success in Wisconsin with our Baldwin Telecom and Town of Troy partnership bringing FTTP services to their community.
JoAnne Johnson from U-reka will be kicking off the Blandin Pre-Broadband Conference Webinar series with a presentation about Critical Broadband Policy Issues on Wednesday October 12th at noon; register to join JoAnne at https://blandinfoundation.ilinc.com/register/rryczwv
JoAnne and John Schultz will also be at the MACTA conference in Lake Elmo on Thursday the 13th with a booth for Minnesota Fiber Exchange. We will be discussing how MFE can help communities monetize their fiber assets.
We will keep you up to date of other opportunities to meet with us including the Blandin Broadband Conference in November. See you on the road!!
Its been a long time but I am headed to the FTTH Conference next week in Orlando. I can remember the first couple of conferences when there were only a handful of us who were actually doing something. Those early parties in New Orleans were probably part of the reason the show is not there anymore!! My purpose this year is to look for applications to “Fill the Pipe”. If you are curious about anything please let me know and I can be your eyes and ears if you are not attending.
