
Chattanooga offers residents lightning-quick connections, to telecoms' dismay - jseliger
http://www.salon.com/2014/07/18/comcasts_worst_nightmare_how_tennessee_could_save_americas_internet_partner/
======
jawns
One way to address the private utility companies' argument -- that a publicly
owned utility has a natural advantage over for-profit companies -- is to
change the corporate structure of the utility so that it's no longer publicly
owned.

For instance, it might be converted into a for-profit company, with the city
retaining a portion of the shares, or into a cooperative (as many utilities,
particularly those in rural communities, are incorporated). In fact, it could
even sell off its shares in times of need to finance other municipal needs.

If it's converted into a cooperative, it would become 100% member-owned, and
any profits would not go to outside shareholders, as with a publicly traded
company, but would instead go back to its member-owners in the form of lower
costs.

The more I think about it, the more I think this is the way to go for other
cities of a similar size. Clearly, Comcast/Verizon weren't very interested in
laying down their own fiber there if the city beat them to it. And once a
utility company (in this case, publicly owned) has an effective monopoly in a
certain area, it's going to be hard for others to introduce competing
infrastructure. BUT, I would think that the ability to then sell the publicly
owned utility would have significant value to the municipalities.

~~~
mseebach
The problem isn't the ownership model after the fact, it's who underwrites the
risk of the initial investment. Most of the time, when public organizations
make bold investments, they're mis-pricing the risk (which is easy to do when
you have someone else around to pick up the tab if things goes wrong). In
Denmark, the utilities did a fiber-laying frenzy around a decade ago and the
business case did not follow through and the consequence was enormous cost to
electricity consumers who never had a say in the matter (OK, technically they
did through politically appointed oversight at the utilities).

I think the coop model for getting fiber to the home is awesome. Nobody
benefits more from laying last-mile fiber than the homeowner. But forcing
neighbors to invest in the project if they're happy with the state of the art
isn't really fair IMO.

I've actually been thinking quite a bit of how a provisioning and operations
consultancy that would help eg. home owners associations and the like build
and run a fiber network and essentially be their own local ISP. Does such a
thing exist?

~~~
pfitzsimmons
I would love for someone to start a company that could bring fiber to cities
via the kickstarter model. Getting the money upfront from customers could go a
long way toward mitigating the risk. Ideally the company would be structured
as a hybrid for-profit/customer co-operative (so maybe 20% of the shares would
be 10X preferred stock owned by the for-profit arm, and the other 80% of
shares would be owned by the customers).

~~~
mseebach
So, I haven't done any market research, but the model I have in mind is that
the network is dark fiber terminating in a carrier neutral facility to
decouple the infrastructure from the service - I think this is important for
financing reasons. Running fiber to the home is a pretty expensive operation
and most people would need some kind of financing. In a non-decoupled
scenario, that financing would come from locking in a long term provider
subsidy contract, but the timescales needed (maybe 5-15 years) are way too
long to commit to a single service provider. They might be awesome in the
beginning, but they then deteriorate or go bankrupt or whatever and you're
stuck paying for Comcast-like service for a decade.

A dark fiber, however, is a perfectly neutral medium and it's trivial to
measure it's quality so you can set up meaningful SLAs (basically, like water
or electricity - it's either there or not, and if it's not, it's the providers
problem. OK, not quite, but it's a heck lot more clean cut than deciding
whether your internet connection is too slow, why and whose responsible).

So you essentially take out a mortgage on your fraction of the dark fiber coop
(my consultancy could conceivably facilitate this financing - maybe there's
some local businesses or wealthy citizens that you like to underwrite the
loans, but they'd still need the infrastructure to facilitate the loans and
secure the collateral). You own the bit of infrastructure that only serves
your house outright (if you're in a dense area, that't not much, if you have a
two mile driveway, it's more) and 1/nth of the shared infrastructure,
including the carrier neutral termination room. When someone buys in later,
they pay for any direct cost of connecting them, and their 1/nth is
distributed evenly between the existing members. If this is a community
effort, you can save a lot of money digging ditches yourself (the consultancy
will provide instructions on how to properly secure the cables in the ditch)
and by placing the termination room in a town hall, community center, church
or local business annex - ideally close to existing backbone cable runs.
Obviously, bullet proof leases and contracts for access to this room would
need to be in place, that's part of what I imagine the consultancy would help
with.

Once you have the infrastructure in place, you need to get a provider to set
up shop in the termination room. It would make a lot of sense for the
consultancy to also be an ISP for this purpose. Maybe the cost of setting up
could be incorporated in the initial capital of the coop, maybe the ISP will
front it on back of signing maybe 1-2 year contracts for service (which is
separate from and on top of the cost of the fiber), maybe it can just provide
the service on the expectation of being able to do business - that would
likely depend on how remote the community it. Installing optical transceivers
at each end of the fiber is the responsibility of the customer and their
desired ISP.

------
nickreese
The thing that is left out of the EPB conversation is the amount of federal
funding they got. While it does make a good case study, what is impressive is
the smaller cities that are beginning to roll it out even in states where laws
ban/limit it.

Like Opelika Power in Alabama:
[http://www.opelikapower.com/](http://www.opelikapower.com/).

For my startup broadbandnow.com we've been emailing every mayor in the US
offering free statistics about coverage, fiber penetration, etc in their local
area along with how they can bring faster speeds to their area.

So far the campaign is going well, we've emailed almost 300 mayors, but after
countless phone calls and email changes with city officials, the disheartening
reality is that most cities have 2 options to bring faster interent to their
area.

1 - Install their own network 2 - Beg incumbent providers to increase their
speed / coverage.

I think it's still a few years out, but I'm forecasting a huge slew of crowd
funded or community backed providers entering the market to fill the gaps in
coverage. (Our goal is to be a part of that movement)

~~~
sehugg
Also the funding they got ($111.5 million) was from the DOE under the auspices
of building out a "Smart Grid" [1]. Doubtful that a full fiber connection to
the home is required for these applications.

[1] [https://www.epb.net/news/news-archive/epb-chattanooga-
awarde...](https://www.epb.net/news/news-archive/epb-chattanooga-awarded-
federal-stimulus-grant-for-smart-grid/)

~~~
crymer11
EPB does have a very nice "smart grid" that uses fiber optic lines to connect
to stations positioned all over their network that monitor the condition of
the connected grid and can rapidly shut off power to a very localized area.
They realized that they still had quite a large bit of bandwidth remaining,
and decided to start an ISP.[1]

1- This is all based on what I recall from conversations with EPB higher-ups
when I spent a day chatting with them for a school event.

~~~
hgsigala
Yeah. I think the folks above have it backwards. Remember that EPB stands for
Electric Power Board (90% sure of this). They then knew that the logical thing
to follow from providing these services was to provide the "new electricity"
aka Internet connectivity.

also, if you're really interested, New America Foundation recently published a
good study on public broadband options
[http://www.newamerica.net/sites/newamerica.net/files/policyd...](http://www.newamerica.net/sites/newamerica.net/files/policydocs/ArtofPossible-
OverviewPublicBroadband_NAFOTI-CTC_0.pdf)

------
na85
Typical response from entrenched American monopolies: Use the courts to prop
up your outdated business model so that you aren't required to innovate.

~~~
e40
It's not just lack of innovation. Sometimes there is innovation. It's the
protection of monopolies. Comcast has been delivering me good speeds, but
they're the only choice I have. That's what they want, it's the opposite of
what I want.

~~~
na85
In what way does that example illustrate that Comcast sometimes innovates?

~~~
e40
The speeds they are providing me are much higher than they were. My point was
that innovation isn't the important aspect of this issue, it's the protection
of the monopoly. I think we'll all agree that monopolies will tend to innovate
less.

~~~
luckyno13
The speeds may go higher, but they still are rarely what is advertised.
Perhaps they should attempt utilization of advertised speeds, at this point,
that would pretty much be innovation. In the U.S. at least.

------
malchow
Loosk like EPB, the electric utility co. in question here, is offering 1Gbps
over fiber for $70/mo.

[https://epbfi.com/enroll/packages/#/](https://epbfi.com/enroll/packages/#/)

~~~
hajile
Also note that the connection is symmetrical at 1Gbs while most connections
greatly favor download and punish upload

~~~
davidandgoliath
I moved to Chattanooga mostly because of EPB. It's worth noting I average
about 900mbps up, and 900 down. During peak hours it's about 900/750, which I
find impressive.

~~~
mynameishere
Just out of curiosity, what do you do with all that bandwidth? I'm assuming
they block port 80, so I can't really see the point...

~~~
coldpie
This is wildly unimaginative. One can do lots of things with massive upload.
Super high quality streaming video, over Google Hangouts or Skype, and with
Twitch available on every Xbox 1 and Playstation 4. You could have a basically
realtime backup system that rsyncs your entire system to a remote server
nightly. You can do large asset sharing with remote team members without long
download times. Software distribution via bittorrent (Blizzard has been doing
this for years) could become basically instant if everyone had gigabit upload
speeds.

Limited bandwidth is a really, really constraining bottleneck on innovation.
It's a crime that Comcast et al get away with limiting innovation on the
Internet to support their monopolies.

------
minimax
_Like a publicly traded corporation, the utility issued bonds to raise
resources to invest in the new broadband project. Similarly, just as many
private corporations ended up receiving federal stimulus dollars, so did EPB,
which put those monies into its new network._

This is kind of a bullshit comparison. The bonds they are talking about are
bonds issued by the city of Chattanooga and backed by the revenue of the local
electric utility. That isn't something a telco can do. And they are muni bonds
so they receive favorable tax treatment (the interest payments on the bond are
tax exempt at the federal and state level) which is reflected through lower
interest rates (cheaper borrowing costs) for the issuer. So to say that, hey,
the local electric utility did a thing that any old telco could do is not
realistic. Also the part about receiving stimulus money is really contrived.
The utility directly received DOE (Dept of _Energy_ ) moneys in a way that
none of the big telcos did.

~~~
rosser
And municipally owned utilities can't lobby (read: buy) congresscritters like
the telcos can. Life's just unfair to everyone, innit?

~~~
minimax
Do you understand the significance of being able to borrow against the revenue
of the local electric utility? This is what that means: EPB goes to the market
and says "hey guys, I need like $200M to make some internet and I can raise
the electric rates of all the citizens of Chattanooga to whatever it takes in
order to pay it back." There is almost no risk for the lender and if the
project were to fail it would be $200M down the drain for the citizens of
Chattanooga (at least all the ones that buy electricity, which is probably
most of them). Why would you even need lobbyists at that point?

I'm not try to be a cheerleader for the big telcos, but I think there are
valid financial reasons cities shouldn't fund these kinds of projects this
way.

~~~
symfoniq
EPB's fiber network wasn't funded this way. Either state law or charter (can't
remember which) forbade them from using electric utility revenue to build out
the fiber network. They issued bonds instead under a new EPB Fiber Optics
startup to finance the build-out.

The inverse is not true, however. Last year, EPB's electrical division saw a
shortfall in revenue due to electricity usage being lower than anticipated.
This could have actually resulted in a rate hike to EPB electrical customers,
but because EPB Fiber Optics was already profitable, they were able to use
fiber revenue to avert an electrical rate increase.

~~~
minimax
You are wrong. I dug out the documentation associated with the 2008 $220M
issuance when I was looking at this yesterday. It is a muni bond issued by the
city of Chattanooga "payable solely from the revenues of the electric system"
and the project described is "to construct a fiber optic broadband network."

[http://emma.msrb.org/MS270152-MS266407-MD521993.pdf](http://emma.msrb.org/MS270152-MS266407-MD521993.pdf)

------
krankin1
I used to live in Chattanooga, EPB was wonderful. My favorite thing about the
internet service, my bill was exactly the price advertised (like 59.99). No
additional fees, no extra taxes, all of that rolled into the advertised price.
It's a little thing, but helped to build trust. Oh, and the download speeds
were always as advertised or better.

------
tjefferson
I'm really glad to see EPB getting some good press: they not only took a
really innovative step forward with their physical infrastructure, but also
partnered with a local accelerator program
([http://www.thegigcity.com/gigtank/](http://www.thegigcity.com/gigtank/)) to
give startups access to their expertise and grid data to help new companies in
the smart grid/smart home space. This was the first year they've done so, but
I expect they'll continue.

Full disclosure: we're www.gridcure.com in the smart grid track of the most
recent cohort of the program (Demo Day is on the 29th. Ahh!), and can't speak
more highly of the startup community in Chattanooga and the quality of work
that goes on here. EPB's been a terrific pilot partner for us.

------
kqr2
OT, but how is Chattanooga's startup scene doing? A little while ago, there
was this thread:

[https://news.ycombinator.com/item?id=5166034](https://news.ycombinator.com/item?id=5166034)

Also, [http://noogastartups.com/](http://noogastartups.com/)

~~~
tjefferson
We posted at almost the exact same time. We're down here in an accelerator
right now, and the quality of designers and engineers is incredible. The city
is working pretty hard to put itself on the map as a place to start a company,
especially on the hardware/additive manufacturing side of things.

And there's great beer everywhere, three climbing gyms walking distance from
my desk, and dirt-cheap office space.

------
andrewguenther
Just to confirm, the article doesn't really make it clear (or I'm just dense),
but are they carrying broadband through power lines?

~~~
wmf
No, I think the electric company built a fiber network to manage their
electric grid and then they decided to extend it to homes and businesses.

~~~
pyre
I guess the real question is then: Does allowing home/business users onto the
same network that manages the electrical grid a good idea (from an OpSec point
of view)? Does this make it easier to hack the electric grid? What happens to
the electric grid when the network becomes congested?

~~~
toomuchtodo
One would hope they would be physically segregating the network and using
different fiber strands for SCADA vs home/business users. I would be nervous
even if it was logically separated using something like vlans at layer 2;
you're one bad configuration change away from possibly damaging consequences.

~~~
pyre
My thought is that this digs into the idea that they 'just decided to' offer
Fiber-to-the-Premises after they realized that they had built a fiber network.
Or is this a non-issue (i.e. adding new strands is trivial / cheap once the
infrastructure is there or maybe SOP is to just lay _lots_ of strands, because
the strands are cheap)?

~~~
toomuchtodo
Fiber optic cable is manufactured with anywhere between 1 and 288 strands in
the bundle; I believe its most likely a non-issue.

------
jrockway
> "The result is a system that now provides the nation’s fastest broadband"

Well, tied for fastest. It only goes up to 1Gbps. Meanwhile, Japan has at
least 2Gbps (and I think I saw 4Gbps somewhere, but don't have a source).

~~~
montecarl
How does one even make use of >1Gbps internet in a residential setting? Do
they sell 10 GigE routers for consumers? Are there any desktops or laptop out
there with 10 GigE? I think the answer is no.

The fact that you can get a 1 Gbps link to the internet is amazing. This is
pretty much the fastest LAN connection you can get. The difference between LAN
and WAN will be gone before too long (other than latency).

~~~
tacticus
>Do they sell 10 GigE routers for consumers?

Not yet. But the cost of 10Gbe is dropping quite rapidly.

~~~
jrockway
Routing even 1Gbps with NAT, etc. is actually a little difficult. But you can
drop a 10GigE card into your desktop and get 10Gbps for at least one machine
that way.

(They seem to cost in the $500 range these days. I'd pay $500 for a 10Gbps
link to the Internet. What would I do? I have no idea.)

------
HistoryInAction
Interestingly, Rep. Marsha Blackburn (R-Tennessee) introduced an amendment
that the House passed banning such local broadband efforts, which require
explicit approval by the FCC: [http://motherboard.vice.com/read/house-
republicans-are-killi...](http://motherboard.vice.com/read/house-republicans-
are-killing-the-dream-of-local-high-speed-fiber-internet)

If startups had a Chamber of Commerce equivalent, as Chattanooga's Enoch
Elwall has been proposing, our community could effectively push back in a
unified political voice through a local organization.

------
MCRed
I am hopeful that this will show people why municipalities granting monopolies
to phone and cable companies is a bad idea.

I've argued this for years, and many of the people who are now pro-net
neutrality, in years past would argue that there needed to be these
monopolies, because otherwise the infrastructure wouldn't be built, or poor
people wouldn't be able to afford it, etc.

In fact, EPB is probably a local monopoly- many power companies are, though
that is less the case today than in decades past.

------
ekianjo
> Yet, in an epic fight over telecommunications policy, the paradigm is now
> being flipped on its head, with corporate forces demanding the government
> squelch competition and halt the expansion of those high-quality services.

ISPs and Telecoms are amongst the industries that lobby governments the most -
they are actively fighting against Free Market, so there's nothing about this
which is "flipping this paradigm on its head".

------
hyperliner
When should the government enter a "private" market opportunity? I think the
answer is "Only when necessary to advance the public good."

It seems people want to have one model or the other ALWAYS. But it is not that
easy. We don't want firefighters being a private business because a house
would burn before you can pay for the service. Or police: the service is
typically needed where those with least ability to pay live.

However, it also does not follow that government should enter, say, into the
haircut business or the fashion business. But the simple "threat" that it
would be possible should send the message to private participants that service
at reasonable cost is expected in _some markets._

To the extent that access to information and communication is a necessary
requirement in the Republic, then it seems to me that it is the government
role to ensure this.

EDIT: I wonder at what level though. It seems that if the service is
necessary, local initiatives have the least chance to be successful. Maybe
this is one of those projects where states have a better chance.

------
specto
My sister has this and doesn't upgrade to the 1000 service because she doesn't
need it, even though it's $12 more than 100. I'm sitting here lucky if I get
11 down .5 up

------
rayiner
I really don't understand how everyone gets so excited over publicly owned
internet infrastructure. Here in Wilmington, they can't get the buses to run
within 30 minutes of scheduled time. I don't even want to imagine what the
municipal internet would be like. Over in Atlanta, not too far from
Chattanooga, the public sewer system has major sections dating back to the
reconstruction after the civil war, and dumps untreated sewage into the
Chattahoochee after a big rain overflows the system. Municipal infrastructure
historically is under-maintained (hard to get people to long up tax dollars
for something that already kinda works). It'll be curious to see how
Chattanooga keeps up with the upgrade cycle over the next decades.

Also, no company wants taxpayer-funded alternatives to their product. Its
impossible to effectively compete with a public entity that can tap tax
revenue. That angle doesn't really add anything to the article.

~~~
toomuchtodo
And yet, my roads, police and fire services, and municipal maintenance
services work very well.

Just as with the private sector, you'll be able to find public initiatives
that aren't reaching their goals, or are outright failures. Should they not be
permitted to compete against the private sector when the private sector
chooses not to serve a certain unprofitable market segment? If you're that
good at providing services, why as a private business are you worried about
competing with an "incompetent" (as you may argue) public sector initiative?

Full Disclosure: I fully support municipal broadband, and want a stake driven
through Comcast's heart.

~~~
rayiner
> And yet, my roads, police and fire services, and municipal maintenance
> services work very well.

For varying definitions of 'very well.' Public services are good at delivering
a minimum level of service to everyone. Everyone will get water and sewer
service. That water might not be particularly clean, and the sewers might dump
untreated sewage into the environment, but everyone will get it. The problem
for you in this narrative is that you're the yuppie who would be happy to have
a higher water bill in order to have cleaner rivers: you're not going to get
your way.

Chattanooga was able to piggy-back this on the fiber network put in place for
smart grid. What happens in 10 years when that network becomes obsolete? Your
neighbors will have to vote to fund upgrades. Will they do that? 60% of people
who have access to FiOS do not subscribe. When those same people vote on
whether to raise their utility bill to fund upgrades, do you think you'll be
happy with the result?

You sound unhappy with Comcast, but the fact is that they pump enormous
amounts of capital into their network, while municipalities are famous for
letting their infrastructure rot.[1]

I'm not opposed to public services. The question is: will municipal internet
be more like NYC's transit system, or more like the ones everywhere else?

[1] The U.S. Society for Civil Engineers estimates we're $3.6 trillion behind
on infrastructure maintenance.
[http://www.infrastructurereportcard.org](http://www.infrastructurereportcard.org)

~~~
chimeracoder
> The question is: will municipal internet be more like NYC's transit system,
> or more like the ones everywhere else?

It's funny that you use this as a point of comparison. The NYC subway system
began as three competing private companies.

Long story short: They went broke, and were acquired by the city in 1940 (and
then later by the state, which now has authority over the MTA).

While they were originally constructed as private subway systems, I firmly
believe that it would be impossible for NYC to function the way it does now if
its public transit system were privately run.

That's not to say I'm a fan of the way the MTA is regulated. I follow this
issue closely and have a lot of opinions on the matter. There are a number of
ways in which the state government cripples it. But it's still significantly
better than it would be if the Interborough Rapid Transit were still running
the numbered lines.

~~~
mseebach
> Long story short: They went broke, and were acquired by the city in 1940

Not quite as simple as that, the city had been deeply involved for decades
prior to them finally taken over completely, and the city effort was itself
deeply indebted.

Anyway, I'm pretty sure the GP emphasized the MTA as a (rare) example of
public infrastructure that's actually run to the high standard we'd want our
internet infrastructure to be run at.

------
eyeareque
Innovate or litigate at its finest.

------
jackvalentine
The obvious answer to complaints is to open the network up for wholesale and
force the utility company that built it to sell access to it's retail arm for
at least the same price as it's charging others.

------
discardorama
One angle missing in this whole debate is privacy.

For example: the USPS, having started as a government agency, has the weight
of the law behind it. No one can mess with your (physical) mail.

Similarly, I can imagine a scenario where traffic on a municipal-owned fiber
network could enjoy some protections that a private operator won't.

As an example, ATT is more than happy to bend over and go above and beyond the
law to help the feds, hoping for favors in return.

------
tim333
Go Chattanooga!

------
dang
Article title changed to (compressed) subtitle to reduce baitiness.

~~~
polarix
Thanks for leaving a comment here indicating the change. This should be
standard behavior, if it's not already.

