Speed Limit

For the U.S. broadband definition, the FCC has plans to raise the minimum speed for download (DL) and upload (UL) to 25 mbps and 3 mbps, respectively.  According to the most recent NTIA report that summarizes broadband availability to urban and rural residents in each state and nationwide, only 51.2% of rural residents currently have access to DL speeds greater than 25 mbps, compared to 93.8% of urban residents.  Some other download speed comparisons include:

	> 10	> 25	> 50
rural	93.8%	51.2%	46.9%
urban	99.9%	93.8%	91.3%

Twenty-one states fall below the 51.2% of the nationwide rural population with DL speeds greater than 25 mbps.  Four of those states (Alaska, Montana, Texas, and Vermont) provide less than 20% of their rural population with this DL speed.  If the FCC definition changes, some ISPs have a lot of work ahead of them if they care about their reputations.

The Tale of Two [Tennessee] Cities

In Tennessee, only municipalities that own electric utilities can provide telecom services.  In other parts of the state, municipalities can only provide telecom in unserved areas in conjunction with the private sector.   The intent of the legislation is to protect taxpayers from over-investment, etc.  In a state with 95 counties and 34% of the population residing in rural areas, municipal broadband (partial, cable, fiber) exists in only 15 towns (10 counties).  Most of those counties are non-rural, including Chattanooga.  EPB Fiber Optics which operates the municipal broadband in Chattanooga  wants to expand its network into surrounding communities, but it is not able to do so because of the existing law.  Seems crazy!

Google Fiber has plans to enter Nashville, a city with technology, speed, and number of providers already higher than the state average.  (And, NESNet has dark cable there.)  Because of the economics of broadband, it has no announced plans to expand into other areas of Tennessee.  So, why not let the cities/towns do it themselves if they can make the economics work?

County	Muni	County Pop.	Muni Pop.	Muni Pop/ Co. Pop	Provider	Technology	Wireline no>2	Wireline no>3	Wireline no>4	DL>100	DL>50	DL>25
Unicoi	Erwin	18,082	6,097	33.7%	Erwin Utilities	Partial	79.9%	3.4%	0.0%	74.2%	74.2%	74.2%
Lincoln	Fayetteville	33,633	6,827	20.3%	Fayetteville Public Utl.	Cable	68.3%	36.7%	3.7%	31.3%	61.6%	61.7%
Giles	Pulaski	28,746	7,870	27.4%	PES Energize	Fiber	49.5%	34.8%	13.7%	38.9%	46.4%	46.4%
Coffee	Tullahoma	53,357	18,579	34.8%	Tullahoma Util. Board	Fiber	90.0%	71.6%	4.6%	87.2%	87.2%	87.2%
Sullivan	Bristol	156,595	26,702	17.1%	Bristol TN Essential Svc	Fiber	96.7%	47.5%	5.9%	98.9%	98.9%	98.9%
Maury	Columbia	83,761	34,681	41.4%	CPWS Broadband	Cable	85.7%	39.3%	2.0%	90.7%	90.7%	90.7%
Washington	Johnson City	125,546	65,123	51.9%	BVU OptiNet	Partial	96.5%	25.1%	4.3%	96.5%	96.5%	96.5%
Madison	Jackson	98,733	67,685	68.6%	Jackson Energy Auth.	Fiber	92.0%	74.0%	9.0%	91.0%	93.0%	93.0%
Montgomery	Clarksville	184,119	132,957	72.2%	Clarksville CDE Lightband	Fiber	91.9%	62.4%	5.2%	94.8%	94.8%	94.8%
Hamilton*	Chattanooga + 5	348,673	210,991	60.5%	EPB Fiber Optics	Fiber	98.1%	91.1%	12.0%	98.8%	98.8%	98.8%
Davidson	Nashville	658,602	569,891	86.5%	NESNet	Dark	98.4%	85.4%	31.9%	97.2%	97.2%	97.3%
TN State Average							84.0%	46.0%	11.0%	81.0%	82.0%	83.0%
Source: broadbandmap.gov

The beauty of competition

In the vast majority of Google Fiber's current and potential markets, AT&T (U-Verse and DSL) is an incumbent wireline broadband provider.  In response to the actual and threat of entry by a well-financed, vertically-integrated foe, AT&T is fighting back.  In April of last year, the firm announced its plans to expand its U-Verse with GigaPower in 100 possible cities.  Included in the lists are the Google Fiber cities.  No surprise!  Who wins?  Certainly, the buyers of high-speed internet in those markets.
att_eyes_100_u_s_cities_and_municipalities_for_its_ultra_fast_fiber_network.html

Why is Google Fiber going to “those” cities and not ours?

Why not New York City, Philly, Boston, Pittsburgh, New Haven, Baltimore, or Hartford?  And, for that matter, why not Chicago, Milwaukee, Cleveland, or Detroit?   In these Northeast and Midwest cities, the populations and population densities are much greater than those chosen to go first by Google.  Add in that, in many of these “mature” cities, the median income and percentage of the population with at least a college degree are also higher, we should see Google Fiber trucks in our neighborhoods soon.    But, let’s not hold our collective breathes.  For Google, as it should be, it comes down to a whole host of supply and demand considerations.  There must be a sufficient number of potential buyers with the willingness and ability to pay the monthly service price, a price that has to exceed the costs to construct and manage the network on an on-going basis.  And, what factors can influence those costs?  In addition to raw materials, labor, capital, there are real and man-made barriers to enter and compete, including many things influenced by the municipality (access to rights-of-way, fees, and how many competitors there are in each market).   I have a feeling it will be a very long time before we see Google Fiber up North.  (Note: In many of these GF cities, the incumbents are Time Warner or Comcast and AT&T.   Verizon is not a competitor in any of the markets.) 

Google Cities (actual and planned)	Pop (2010) 000	B.S. degree +	% Home ownership Rate	Median Income $000	Pop/sq. mile	Land area (sq. miles)
Kansas City	459.8	31.3	56.3	45.3	1,459.9	314.95
Austin	790.4	45.6	45.0	53.9	2,653.2	297.9
Provo	112.5	39.6	42.3	39.7	2,699.3	41.67
Salt Lake City	186.4	41.2	49.5	45.9	1,678.0	111.11
San Jose	945.9	37.4	58.0	81.8	5,358.7	176.53
Portland	583.8	43.8	53.4	52.7	4,375.2	133.43
Phoenix	1445	26.3	55.5	47.1	2,797.8	516.7
Nashville	601.2	35.3	54.2	46.7	1,265.4	475.13
San Antonio	1327	24.6	55.7	45.7	2,879.8	460.9
Raleigh-Durham	403.9	47.5	53.6	54.4	2,826.3	142.9
Charlotte	731.4	39.8	56.3	52.4	2,457.1	297.68
Atlanta	420	46.8	45.4	46.6	3,154.3	133.15
Average	667.3	38.3	52.1	51.0	2,800.4	258.5

Source: census.gov

Iowa is not Pennsylvania nor should it be.

A side-by-side comparison	Pennsylvania	Iowa
Restrictions on Municipal Broadband	Yes	No
Median Income (2009-2013)	$52.5K	$51.8K
Population (2010)	12.7M	3.1M
Population density (pp/sq. mile)	283.9	54.5
# of counties	67	99
% population -- rural	27%	36%
% of population served by __ providers ≥2 ≥3 ≥4	95.4 86.9 52.0	78.4 38.5 6.9
% of population with download speed greater than Ø  100 mbps Ø  50 mbps Ø  25 mbps	74.4 89.9 90.4	64.3 77.7 79.1
# of towns (counties) with municipal broadband	2 (2)	23 (18)
Total population of municipal broadband towns	8.4K	132.5K

Sources: broadbandmap.gov, census.gov, and Community-based Broadband Solutions, Executive Office of the President, January 2015.

While the median income of the two states is similar, little else is, including broadband deployment and the legislative position on municipal broadband.  In Pennsylvania, the percentages of the population served by more than 2, 3, and 4 wireline providers and the quality of service offered (as measured by available download speeds), far exceed that found in Iowa.  The differences cannot be attributed to the presence of restrictions in Pennsylvania and the absence of them in Iowa.  The differences can only be attributed to the high costs of deploying wireline broadband into sparsely populated areas.  For these rural communities, it then becomes how do they get (pay for) high-speed broadband if that is something that they value?   They are tough decisions, for sure.   But, there shouldn't be any artificial (self-imposed) state barriers from preventing discussions from taking place.  In Iowa, 23 communities in 18 counties have implemented municipal broadband.  The remaining 81 counties, most of them rural, have chosen not to.  Rural communities in Pennsylvania should have that same right.

					COUNTY -->
County	Town with Muni Broadband	County Pop.	Pop of Muni Towns	Muni Pop/Co. Pop	Wireline no>2	Wireline no>3	Wireline no>4	DL>100	DL>50	DL>25
Taylor	Lenox	5,960	1,359	22.8%	48.8%	0.0%	0.0%	23.9%	23.9%	47.7%
Pocahontas	Laurens	6,738	1,232	18.3%	53.9%	9.8%	0.0%	46.6%	46.6%	46.6%
Monona	Mapleton	8,873	1,235	13.9%	50.3%	0.0%	0.0%	8.5%	82.3%	82.3%
Keokuk	Webster City	10,078	73	0.7%	41.9%	22.9%	0.0%	14.4%	38.4%	38.4%
Mitchell	Osage	10,661	3,634	34.1%	53.5%	37.3%	0.0%	38.0%	38.0%	55.5%
Shelby	Harlan	11,682	5,027	43.0%	55.7%	45.2%	42.5%	45.0%	45.0%	45.0%
Grundy	Grundy Center Reinbeck	12,424	4,331	34.9%	70.1%	23.7%	0.0%	29.2%	62.2%	62.2%
O'Brien*	Hartley, Paullina, Primghar, Sanborn	13,950	4,912	35.2%	73.3%	3.6%	0.0%	6.4%	20.6%	23.3%
Kossuth	Algona	14,877	5,513	37.1%	61.5%	41.4%	0.0%	55.2%	55.2%	55.2%
Clay	Spencer	16,421	11,150	67.9%	74.3%	67.5%	0.0%	73.4%	78.6%	78.6%
Jackson	Bellevue	19,652	2,172	11.1%	61.7%	0.0%	0.0%	44.9%	44.9%	44.9%
Buena Vista	Alta	20,232	1,883	9.3%	72.4%	65.5%	0.0%	69.0%	69.1%	69.3%
Carroll	Coon Rapids, Manning	20,659	2,762	13.4%	73.0%	50.2%	1.0%	57.8%	57.8%	64.3%
Buchanan	Independence	20,932	5,968	28.5%	40.4%	27.4%	0.0%	33.3%	42.0%	42.0%
Sioux	Hawarden	34,342	2,551	7.4%	51.8%	19.1%	0.2%	4.4%	77.6%	77.6%
Muscatine	Muscatine	43,252	23,034	53.3%	74.6%	0.1%	0.0%	83.6%	84.5%	84.5%
Warren	Indianola	48,367	15,108	31.2%	72.1%	35.0%	0.0%	74.1%	75.9%	76.6%
Black Hawk	Cedar Falls	132,848	40,566	30.5%	90.0%	27.4%	0.0%	42.7%	95.1%	95.1%
* All provided by The Community Agency

   

Georgia on my mind...

In 2013, Georgia’s House of Representatives killed a bill that would have prevented some municipalities from building their own public broadband networks.

Despite the lack of restrictions, high-speed access to the internet does not blanket the state.

Some numbers...

• In the state, there are 108 rural counties. Just ten of those counties have communities with municipal broadband. 
• Forty-percent of the state's rural population has fewer than two wireline broadband providers to choose from (compared to just four-percent for urban residents).   
• A side-by-side comparison to Pennsylvania where municipal broadband is restricted (see previous post).

Rural	GA	PA
# of Counties (Total)	108 (159)	48 (67)
% of total state population	75%	79%
% of rural population with choice of 2 (3) or more wireline providers	60.8% (19.4%)	86.3% (65.5%)
% of rural population with access to cable (fiber)	54.3% (11.6%)	78.8% (15.3%)
% of rural population with access to wireline download speeds of > 50 mbps (100mbps)	54.1% (46.2%)	68% (40.6%)
# of rural (total) counties with municipal broadband	10 (21)	1 (2)

In Georgia, population density is an issue.  In the vast majority of its counties, the number of persons per square mile is less than 100.  How do you get the economics to work when the the upfront expenditure, private or public, is so great and a timely return on that investment is by no means guaranteed?