Indianola, Iowa Launches New fiber Network > Makes one wonder..

Makes one wonder..

1. Because they can.
2. Because these aren't usually subsidized costs.
3. Because they can.

Because there is/has been no competition
Because shareholders want profits

reply to Methadras
Go look at time warner and comcast latest earnings. They took billions in tax subsidies. I think Comcast alone was almost $2b.

Not to mention the USF trough.

Google is saying $500 to wire per POP. If they already have transit, this could be a great example of the REA in action.

reply to JRW2
In some places it's cheaper because they are funding it with your tax dollars. If you can get $400-500 Million in tax payer money to fund the build out then you won't have to recover those costs so you can sell it at below market prices.

If I go out and string fiber I have to recover all costs associated with building the fiber and the monthly costs associated with getting you that product because I can't force anyone to pay for my fiber projects. Munis on the other hand can get local, state, and federal grants to pay for the build out so they only have to cover their on going expenses. Therefore their costs are much cheaper than mine so they can offer their product cheaper.
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I do not, have not, and will not work for AT&T/Comcast/Verizon/Charter or similar sized company.

reply to JRW2
older hardware and bigger areas to cover?

reply to battleop
Very few community networks are funded by tax dollars. They are overwhelmingly funded with revenue bonds bought by private investors.

Indianola has been slowly expanding its network and is working with a local company that offers services. They are simply smart, not making other people pay for it.

reply to Methadras
Are the muni's subsidized -- specifically this one?

reply to battleop
Money is money. The USF trough hands plenty to rural providers so they can *ahem*, make ends meet.

Regardless, what about caps? Even if I agree with all that you say, interest on borrowed capital or dividends to stock holders are fixed costs. Can we trust them when they charge overage fees to the infamous 2% of their customer base to "keep it fair" and lower costs for everyone else?

reply to ilsr_chris
"Very few community networks are funded by tax dollars. They are overwhelmingly funded with revenue bonds bought by private investors."

No, that's how they make up the difference. EPB has a few hundred million in government grants plus a few hundred more in bonds. At this point in time they are somewhere close to spending half a BILLION dollars.

"Indianola has been slowly expanding its network and is working with a local company that offers services. They are simply smart, not making other people pay for it."

And this is EXACTLY how it should be done. The government should remove the hurdles so that their citizens can get the services they want. I.E. make it easy for 3rd party (I.E. not the Cable co or ILEC) to come in and offer service.
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I do not, have not, and will not work for AT&T/Comcast/Verizon/Charter or similar sized company.

reply to rradina
Munis have been accused of being subsidized but whenever it has gone to court, the courts have found the accounting was proper. I am not a CPA but I have no reason to suspect they are being subsidized.

Accounting for this stuff is complicated. But I think the big companies are far more likely to be getting subsidies than local towns.

reply to battleop
A few hundred million in government grants? More like $111 million from DOE. The city got some homeland security funds to build specific wireless infrastructure (I think less than $30 million) but that is not an asset of the utility which built the fiber network.

But yeah, they have probably spent between $300 and $500 million. It is an investment that will last decades. It is a smart investment that has helped the private sector create 4800 jobs in 3 years there. Possibly even more over the next 3 years.

The wireless project is not part of the EPB network, it's done by private group. That network is currently being used for Law Enforcement though they say they plan on offering internet access to everyone at some point.

"It is a smart investment that has helped the private sector"

So long as the private sector is not classified as competition. I have worked for and with companies in Chattanooga that offer VoIP, Cloud Services, Data Backup, etc. and because these companies also offer ISP services EPB will not do business with these guys.

I have seen them tell some guys they can't service them because they have an ISP network. I have seen them quote a medical customer $2000/mo for a 100Mb connection while they quote the ISPs $5000-7500/mo for the EXACT service on the same street. They will sell a 30Mb connection for about $100/mo to a local business with out caps but the EXACT same service to another ISP was $500/m with a 60GB monthly cap.

Tell me how exactly does this help the private sector?
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I do not, have not, and will not work for AT&T/Comcast/Verizon/Charter or similar sized company.

As you well know, a 30/30 oversubscribed line to a resident is priced differently than a 30/30 dedicated line to an ISP. As to how different those prices are, that is up to EPB. EPB's investment has not helped _every_ business, as I'm sure Comcast and AT&T will attest.

I wish communities didn't have to get into building these networks. However, the existing ISPs were not meeting demand and EPB's network is now among the most popular I have seen. It sucks that specialized IPS are now finding themselves unable to compete, but cities cannot just wait for decades for the private sector to finally get the job done.

Thanks to EPB's network, the vast majority of private sector companies have more choices and appear to be very excited at the new possibilities.

I am comparing business and enterprise circuits not residential. A medical office that uses 25mb @ 95th percentile is no different than an ISP using 25mb @ 95th percentile on a 30, 50, or 100mb circuit.
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I do not, have not, and will not work for AT&T/Comcast/Verizon/Charter or similar sized company.

I would expect that an ISP would actually have a different usage pattern than a medical office but whatever. If your point is that EPB is discouraging competitors, then I will have trouble disagreeing with you. Presumably they are acting within the law and probably still more honorably than AT&T does.

As far as discouraging competitors goes, considering how long it often takes for a community to get a muni fiber network off the ground, any company wanting to compete will have an ample opportunity to get in there first. There are plenty of opportunities for a company to do this, and I'm sure most communities would welcome having another player in the market as opposed to having to wire themselves. It just takes a company with the vision to make it happen and the resources and competence to pull it off.

reply to ilsr_chris
No. In my example 25Mb @ 95th percentile is the same amount of bandwidth no matter who the end user is.
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I do not, have not, and will not work for AT&T/Comcast/Verizon/Charter or similar sized company.

reply to battleop
...and I am perfectly ok with you not getting a profit so everyone else can have fantastic service at a fantastic price

reply to ilsr_chris
And who pays back the bonds? In California, taxpayers do, like for the bullet trains to nowhere.