PRESS RELEASES

Cities Deliver Broadband for Less
By Joanna Glasner, Wired News

02:00 AM Mar. 07, 2003 PT

For those willing to forego some sunny weather in return for a speedy and reliable Internet connection, Tacoma, Washington, might qualify as budget paradise.

For around $30 a month, city residents can choose among four cable broadband providers. For another $25, they can get a standard cable TV package with about 50 channels, with a choice of two providers, the city-owned Click Network or AT&T Comcast.

"The prices are lower than they would be if you live in another adjacent city where there is no competition," said Diane Lachel, community relations manager for the Click Network, which is run by Tacoma's electrical utility. She credits the competitive rates to the city's decision in the late 1990s to build out a publicly owned cable broadband network.

Although nearly five years have passed since Tacoma launched its high-speed Internet service, advocates of public broadband say the model is still in the early stages of gaining traction nationwide.

Frustrated by slow or spotty deployment of high-speed Internet services by private telephone and cable companies, a growing number of cities and counties are considering the possibility of constructing their own networks. In most cases, services are operated through the same public utility that currently provides electrical power.

"This is something that's much too critical to be left in the hands of the private sector," said Edward Stern, a city councilman in Poulsbo, Washington, who is pushing a plan to build out a community-owned fiber network.

Publicly owned networks are particularly popular in the Pacific Northwest, in part because the region's main electrical utility already maintains a fiber infrastructure that can be used as a backbone for local networks.

But the concept is by no means isolated to the Northwest. The list of communities offering public high-speed access includes Glasgow, Kentucky; Cedar Falls, Iowa; and Thomasville, Georgia, as well as Ashland, Oregon.

Typically, publicly owned networks charge between $25 and $30 a month for speeds comparable to a standard cable modem or DSL broadband service, about a third or half the price of private services.

According to the Washington D.C.-based American Public Power Association, 71 communities currently offer cable modem service, while 114 sell broadband services through independent ISPs. Ron Lunt, APPA's director of broadband services, expects that number to grow swiftly over the next several years, fueled in part by a federal regulatory decision that could dampen private broadband competition.

The new rule, announced by the Federal Communications Commission in late February, won't require local phone companies to give competitors access or discounted leasing rates for broadband infrastructure such as fiber-optic networks that they build in the future.

Lunt believes the rule change will force many DSL providers that currently offer services by leasing portions of the local phone network to close down. With less competition in the commercial broadband market, he expects more cities will consider entering the fray.

"In essence these communities will have to provide services to themselves through their utilities." he said.

Supporters of the public model believe that it will be more feasible for municipalities to fund community-wide broadband projects, due to their cost and scale. Michael Bookey, a consultant for Pachena Light and a public-broadband advocate, compares the rollout of fiber broadband networks to the building of the nation's roads and highways.

"There really isn't an incentive for the telephone companies or the cable companies to build fiber networks ubiquitously," he said. "I'm not picking on them. It's just that they're private companies who have to earn money to pay investors."

The local phone companies and cable providers that currently provide most residential broadband service, naturally, have a different view.

In the posh Silicon Valley enclave of Palo Alto, the local phone service provider, SBC, opposed a city proposal to provide broadband services to local residents. Fletcher Cook, an SBC spokesman, said the company believes municipal broadband is a "flawed concept."

"Telecommunications is a volatile industry that requires enormous financial investments and a long-term commitment," he said. "That's why government attempts at telecommunications have been shaky in the past."

APPA's Lunt believes municipal broadband may appeal more to sparsely populated or less-affluent communities, where private providers may see little potential for profit.

But even local officials who've supported municipal networks admit they're not cheap. In Tacoma, Lachel estimates it cost $96 million to build out the network to the majority of the city's 184,000 residents. She said the network will eventually be used to deploy self-reading meters for the city's public utility, as well as to deliver broadband and cable.

Currently, Lachel said, only about 10 percent of the 65,000 households with access to Tacoma's Click Network pay for broadband service, basically covering the cost of operating the network.
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