Concord's investigation of a town network – summary to the present

– from a recent email –

Not a surprise.  As we expected, once we got serious about our own network, the industry has organized to stop us, big time.  The March 4 Concord Journal reported fourteen members of the cable industry have paid a think tank at Suffolk to launch that attack against our little town; multiple presentations, three mailings, a website, a full page Journal ad and a deceptive mass calling campaign followed.  We need to respond.  But priorities matter here.

Rather than divert energy to a struggle with the cable industry - not really in our interest - what matters for us is what Concord can gain.  So this is in two parts:  This part updates prospects for our network..  [The latter part, here, addresses the cable industry attack via Suffolk.  Go here if you want the detail look at Suffolk.]  For me anyway the priority is firmly on the former, although none of this would likely take your time or mine now, absent the attack.

--A Concord network--

Beginning nine years ago, the town has invested ongoing, exhaustive work to consider a town network. Over the last half dozen years, first one, then a seond citizen committee spent about two years each on the question (that does not account for the work in town about twenty years ago). The question remains under study, with no conclusion possible without more work. No technolgy choice is yet indicated; though:

A throwaway line in the Suffolk report, "[While m]any municipalities have had apparent success …," suggests that we revisit Kutztown, PA, whose experience has been a guide for us in the past.  (You can if desired refer to the Kutztown case study, from a year and a quarter ago http://davidallen.org/papers/Kutztown et al.pdf - there are spaces in the URL.)

Kutztown is exactly our situation - a muni FTTH overbuild against an aggressive HFC cable incumbent.  At the time it was also the one commercial - and successful - case.  The question of course is, how have they done in the intervening time?  We had projected a likely upswell in activity in FTTH and so a general maturing of the offerings - what in fact happened?

I updated the New Years '03 info in the original Kutztown case via a call to Frank Caruso, in Kutztown.  In a word, Kutztown is doing quite well.

Frank Caruso reports that they have not grown quite as they might, but the momentum is gathering and they are growing and doing quite nicely in the process; that includes increasing interest from surrounding communities.  Most especially, his/their story emphasizes two things we might not have thought of, absent their giving us the experience by proxy.  One is the dramatic saving on operational cost since they are optical rather than electric.  The other is especially satisfying, even gratifying for what it confirms:  As Frank puts it, now that they have built the highway, all manner of service providers are coming to them, to use the town infrastructure.

Of course that is what we have had in mind from the beginning, when a private provider like Comcast is very much closer to the vest about who - or more to the point, if - they will allow another service provider on.  Frank and Kutztown are proving our vision; the Comcast way does not encourage and most feel stifles the blooming of new service innovators.  When we enable innovative providers with an open infrastructure, it also means their private capital is leveraged to improve Concord, rather than the use of Town funds.

You will enjoy that one of those new Kutztown providers is a broadband powerline co ... the BPL will do the apartment buildings where the landlord is recalcitrant about fiber.  Another is a roaming wireless provider who will make Kutztown one big hotspot, riding on the Kutztown FTTH fiber infrastructure.  The beat goes on, with a couple others he also mentioned.

But there was, it turns out, much more.  Frank pointed me to a Feb 15 article in the Allentown PA paper (mcall.com).  The article details 35 - ! - towns that have gone or are going FTTH, with another almost 60 in some sort of partial trial.  That appears to be close to a hundred new entrants, in a brief period (I say 'appears' because there were some earlier trials which may also be in this count).

That can only be described as a giant change from where we were a year and a quarter ago.  Apparently many of the early towns are tiny, even by our standards, but the quote in the article explains how they "don't want to be left behind."  Now equally, larger towns are joining this group, including towns in our size range but bigger than we.  There are also large cities.  To have jumped from the one Kutztown case to now dozens and dozens is dramatic change, an inflection point even, especially in a year and a quarter.  We are not alone.

It is this gathering steam, in the general FTTH environment, that we anticipated back over a year ago - it has happened and is happening going forward, apparently big time.

But we have some key questions to answer.  My characterization has been:  to bring forward a Town open network is like putting a venture capital proposition to a conservative New England (ie triple A muni bond rated) bank.  Just the proposition this same conservative town faced a bit over a hundred years ago, when it considered new-fangled electricity.  The result, as we all know, is over a hundred years of the best services, lowest prices and so forth, in a CMLP that is better managed than virtually any private sector utility.

So how do we put together this oil-and-water of venture capital and conservative financing?  Those of us seriously involved have long ago agreed on the conclusion:  That we proceed only when there is comfortable assurance of financial success.  (Why do I recount this now? - Suffolk raises it, and it is the core in fact.  If Suffolk had a serious interest in helping, this is where they might have ...)

Are we there, has the technology come down its cost curve to comfortableness, and so forth / when are we there, and how do we gauge that?  Perspective on the cable industry/Suffolk piece - here [more detailed review here] - brings out some of the facts.

David Allen

Additionally, an aritcle in Thursday's Concord Journal [pre-Town Meeting] did an entirely
balanced job presenting the current situation.

The article and the Concord Journal site can be accessed directly here.

Cable industry declares war on Article 34

By Maureen O'Connell / Staff Writer

Thursday, April 22, 2004

First it was a high-priced study by the Beacon Hill Institute. Now, an expensive mailing sent to all homes in Concord and a Web site. Those sponsoring Article 34 at this year's Town Meeting are asking, "What are they so afraid of?"

The "they" is the cable industry, which appears to be behind the mailing and Web site, urging voters to defeat an article which would clear the way for the Concord Municipal Light Plant to enter the cable and Internet business if it chooses. Earlier this year, the New England Cable and Telecommunications Association Inc., of which Comcast is a part, funded a study by Suffolk University's Beacon Hill Institute, which said the plan had a 60 percent chance of failure.

"It's the same stuff we saw them use in other towns, such as North Attleboro," said Dan Sack, director of the Concord Municipal Light Plant. "It's not specifically about Concord. Yes, it talks about the Concord plan, but it's aimed at the feasibility study we did 18 months ago. This is not what this article is about at all."

Sack said there is no plan in place. The article simply asks voters to allow the town to plan for a cable and Internet system should Comcast and Verizon (the town's top cable and Internet providers) not keep up with current technologies, as was the case last year, when the first vote was taken by Town Meeting. Comcast had just purchased AT&T Broadband and announced it would upgrade to digital cable and broadband Internet service, which was previously unavailable in Concord. The law requires voters give two affirmative votes in two consecutive years for municipalities to enter the business.

"I've never heard of a business conducted that way," said Paul Cianelli, president of New England Cable and Telecommunications Association Inc. "It's pretty outrageous when you think about it. They want approval without a budget or plan in place."

Cianelli said a red flag was raised with him when proponents of Article 34 said if the article passes, they "might" have to come back to Town Meeting for funding.

"It means they might not come back. They don't have to." said Cianelli. "You're giving them a blank check."

Bob Kusik, a member of the now-defunct Telecommunications Committee, said the status of cable and internet have changed dramatically since the first vote was taken.

"Comcast has done some nice things. They've doubled the speed of their internet service without increasing the price. They've been progressive about bringing in new cable television features," said Kusik.

As long as Comcast keeps up with technology, Kusik said there won't be a need for Concord to begin operating a cable and Internet system.

"I don't think CMLP will do that (get into the business) unless providers fail to give the services people need," said Kusik.

If the company falls behind, as it has in the past, Kusik said it would be nice for voters to have the options Article 34 gives.

"It doesn't cost the town anything to pass Article 34," said Kusik.

Robert Harper, president of the Concord Municipal Plant Light Board, said the flier's assertion of a $12 million gamble is "completely untrue."

He said several years ago, when the Telecommunications Committee first studied the idea of entering the cable and internet business, the committee estimated a $12 million price tag.

"The light board said 'no way,'" said Harper. "We are running an enterprise fund. We cannot show a loss and we cannot spend large amounts of money."

The Light Board authorized the Telecommunications Committee to go ahead with its plan to take the article to Town Meeting, Harper said, because there are indications there may be better and cheaper technology coming down the road.

"The article keeps the door open," said Harper. "If it doesn't pass this year and some new technology comes up, we would have to wait and pass it twice again in a few years."

"There's no gamble," said Sack. On the Web site, he said, it refers to a plan using "old technology."

Fiber to the Home, the technology used in the feasibility study done almost two years ago, Sack said, "is anything but old technology."

The Web site, www.noto34.info, says the site is operated by "a group concerned with government control and ownership of television, Internet and telecommunications in Concord." The Web site gives an address of 60 Thoreau St., No. 268. No further identifying information is given.

Cianelli said Wednesday his organization has funded the Vote No to 34 Committee Against Town Financed Cable Television. He said he was "not comfortable" giving out the number of people on the committee or their names without members' approval, but said there were Concord residents on the committee.

Cianelli said his group would not present at Town Meeting, because it was not allowed, but said also he had not contacted Moderator Ned Perry.

Article 34 has been placed on the consent calendar, determined by Perry, and will be grouped with other articles under one vote unless five voters object. If those five voters come forward, the article will be removed from the consent calendar and considered by itself.

David Allen, a former member of the Cable Television Committee and interested citizen, said Wednesday he planned to post a Web site countering www.noto34.info by the end of this week. The URL of the Web site will be available on the Concord Discussion List at www.concordma.com.

Sack urged voters to allow the town to have options in the cable and Internet department.

"I would urge them to vote for it to give the town options to do things we might want to do in the future. A year ago when we took the first vote the Cable Television Committee had been after them to upgrade, and they upgraded the system in a matter of six weeks after the vote," said Sack. "Is that a coincidence? I don't think so.

"I think they saw the competition coming and seem to be afraid," said Sack.

Credit: The Concord Journal

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