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Broadband Reports: Interview
Ed Hodges, Tri-City Broadband community leader
(old news - 05:00PM Wednesday Mar 26 2003)
tags: exclusive · BBR-News
Yesterday we examined at length the municipal broadband battle going on between three Illinois cities and local competitors SBC and Comcast. Sitting at the table at the heart of that conflict is Ed Hodges, Chairman of a citizens group called 'Fiber For Our Future' and the founder of the Tri-Cities Broadband citizen support website. We asked Ed what it was like going head to head with the big boys; if residents were warming to the idea of municipal broadband; and what the 'Fiber For Our Future' group was all about.

BBR: Can you please tell us what exactly you do for the Tri-Cities municipal broadband initiative? Were you involved in the project from the beginning?

EH: I've been asked to Chair the Citizens Group called Fiber For Our Future. Our stated goal is to support the Municipalities of Batavia, Geneva, and St. Charles, IL in educating the voters about the proposed Tri-City Broadband utility that will be voted on by referendum in all three cities on the 1st of April. The Fiber For Our Future group is, of course, very much in favor of the Tri-Cities building and implementing a Fiber to the home (FTTH) and Fiber to the business (FTTB) transport and support utility.

I became involved in January of this year when I began to realize that the Municipalities were serious about the issue and were ready to move past the research and investigative stages. I attended my first City Council meetings on the subject around mid-January and spoke in favor of this initiative at both the Geneva and Batavia meetings. In recent weeks, I've authorized my business to donate web-space, bandwidth, money, time, and other services to getting the word out to the voters. I've also been asked to speak at several civic and political group meetings throughout the Tri-Cities area.

BBR: How are area residents receiving the idea?

EH: To date, most voters that are given the chance to hear both sides of the argument end up being swayed in favor of the proposal and have stated that they will vote yes during their respective elections on the 1st. However, there are several well meaning and honest opponents to this project. Their stated objections range from the philosophical (Government should not compete in the private sector) to the technical (There are other alternatives to Fiber, such as WiFi).

That being said, there are also a number of not so honorable opponents that have taken it upon themselves to say or do anything that comes to mind. They are handy with the acerbic comment, ready to misrepresent the facts, tell outright lies or deliberately omit pertinent information. What gives me hope though is that most of the citizens of these three cities are a great deal more sophisticated and savvy then our opponents were counting on.

I'm pleasantly surprised myself at the wealth of knowledge concerning business operations and the depth of technical expertise available in this area. I joke about the number of "Fat Brains" that participate on our message board but the truth is, my neighbors know what they are talking about and I'm getting quite an education out of all this.

BBR: We'd read reports that if the idea fails a vote on April 1st,that at least two of the cities would likely go forward with the project anyway, true?

EH: This could be termed a "tricky subject" but the bottom line is that two of the Municipalities (St. Charles and Batavia) are, by law, permitted to post these questions to voters under what's termed an "Advisory Referenda". The distinction is that under Illinois State Law, a city that has reached a certain population becomes known as a "Home Rule" city. Under Home Rule, Batavia and St. Charles representatives are not required to get the voters approval for implementing certain types of services.

I'm not an attorney. So I can't really describe in any greater detail all of the limitations surrounding this aspect but suffice it to say that the Cities felt that they should go to the voters with this Advisory Referenda in order to get an idea for how the residents feel about the issue. Both Mayors from the home rule cities have stated publicly that if this Advisory Referenda fails to get a majority vote, they "could" in fact go forward with the project. None of the Mayors have stated that they "would" go forward, especially if the referenda are soundly defeated. Geneva is not a home rule city and so must abide by the decision of the voters.

BBR: Both SBC and Comcast have truly been firing their PR departments on all cylinders trying to convince area residents that the municipal idea isn't a good one. What do you say in response to local ads run in the paper that paint the concept in a negative light?

EH: I don't mind them painting the concept in a negative light. What I do mind is Comcast and SBC using old school Chicago style politics to get the job done. Now, that's just my opinion but I'll give you a few examples so that others might make up their own mind.

First, SBC and Comcast have both advertised that this project WILL result in higher taxes. They say it as a certainty. They even go so far as telling the reader that the name of the referenda is The Telecommunications and Broadband "Property Tax Increase" Referenda. Another example in the same ad is the statement "If they don't immediately sign up 1/3 of all businesses and households, they'll have to increase your property taxes to pay the tab -- $62 million worth of increases."

The truth is that the utility will need to sign up 1/6th of just residences within a two year period to meet estimated interest payments on the General Obligation bonds that will be sold to investors. Those GO Bonds are the real funding source for the project and the payments on those bonds will need to be met using subscriber fees after an initial capitalization period of two years. There are many more examples but the one that gets me the most is when they state that each and every household will see their property tax increase immediately by the staggering sum of $2,353.

The local city offices that calculate property tax for the three cities are still trying to figure out the math that was used to reach those figures. As an example, the City of Batavia, at my request, used their standard calculation spreadsheets to come up with a number for Batavia residents. My home has a Tax Assessed value of $250,000. If this project is a complete disaster and all $62 million was spent at once with 0 chance of recovery, my property tax would go up $147.

BBR: Are you receiving any outside support or guidance perhaps from operators of other municipal networks?

EH: To date, we have been in contact with at least 7 other municipalities that have offered both advice and commiseration over our battle with the incumbents. And, we've heard some real horror stories that make some of our own troubles seem somewhat mild so far. I was really expecting that our group was going to have to go it alone. But we've had some outstanding community and business support come our way.

BBR: Recently the Tri-Cities broadband website was hacked. Was it discovered who was responsible? Your website claimed that a mailing list was stolen and that users were in turn "spammed". What kind of Spam?

EH: As the sysadmin of the site in question, I'm of course somewhat hesitant to dwell on this issue but I will say this: The review of the log files has been completed and continued investigation is a matter for the proper authorities. There is no evidence to suggest that any serious or long-term damage was done to the server in question. A known exploit of majordomo listserver was used to gain access to the complete mailing lists for three groups. Those lists were apparently given or perhaps sold to a commercial marketing company. That company did what any good marketing company will do, they marketed.

BBR: According to Kane County Chronicle, the three mayors for the affected cities this week claimed that they'll be moving forward now regardless of the vote....do you feel this could alienate residents in the area, particularly those who have been buying into SBC and Comcast's "misinformation" campaign?

EH: The report was published in the local, small town newspaper following a press conference hosted by all three Mayors in support of the initiative. Unfortunately the author was either very tired, very behind in his work, or very incompetent. I'll give him the benefit of the doubt and say that he may not be smart enough to be that purposefully malicious, so he must have been worn out from a long day of work and forgot he was supposed to be writing a news report and not an editorial.

As to the question raised, other writers in attendance from some of the larger newspapers at yesterday's press conference wrote much more balanced articles. But in any case, I would refer you back to my comments earlier. By the way, the Mayor of the City of Geneva (a non-home ruled city) has already contacted the newspaper in question and demanded a retraction.

BBR: The Tri-City Broadband Community Support Group is backed by an organization named the "Fiber for our Future Committee". For those concerned that this organization is simply another group of businesses trying to erode Telco territory, how would you respond? What is the "Fiber for our Future Committee"?

EH: Fiber For Our Future is a group of like minded individual citizens and voters in the Tri-Cities area. I say like minded because it's true. Each of us has our own "war stories" concerning residential and/or business telephone, internet and cable television services in this area. Most of us are currently working for large companies or we run our own businesses.

Our ages range from the low 20's to the high 60's with a median age of around 39. There are around 20 regular members and somewhere around 80 supporters. The balance of gender runs about 60/40 in favor of men vs. women. Although there have been some business contributions in the form of money or like kind services, most of the funding we've been able to raise has come from individual donations.

We are registered as an official political action group in Kane County, IL and we do publish our financial statements as required with the county and state board of elections. In the end, what you need to know about us is that we are just folks. Now I don't mean that in a cornball sense but rather, there are carpenters, woodworkers, former flight attendants, truck drivers, real estate agents, club owners, business owners, designers, consultants, and yes... one or two geeks in attendance on a regular basis when we get together on Saturday mornings to talk about the beating we are going to deliver to the BIG BAD TELCO'S next week.

BBR: For readers who are interested in supporting your region's broadband push, is there something they can do to help?

EH: Well, with the vote coming on the 1st of April, there's not much time left to do very much even if we had the money to do it. I would ask my fellow readers of Broadband Reports to watch carefully what happens in this little suburban area West of Chicago. If our voters give the green light for this project to go ahead, we are going to be the watch word for technology integration and implementation at the community level nationwide.

One final note, A representative for either Comcast or SBC recently stated that "If the people of the Tri-Cities needed this kind of service, we would have built it for them". My response to them is that I don't think there is anyone working for SBC or Comcast or any other Telco that is qualified to tell us what our needs are in our own community. You had several chances going back several years to deliver what we needed and you blew it every time. Now, get ready to do what you say you love to do, Compete.

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Forums » Broadband Reports: Interview
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Post a:
nasadude

join:2001-10-05
Rockville, MD
·Comcast

dammmmmmmn

"My response to them is that I don't think there is anyone working for SBC or Comcast or any other Telco that is qualified to tell us what our needs are in our own community. You had several chances going back several years to deliver what we needed and you blew it every time. Now, get ready to do what you say you love to do, Compete."

This is the kind of attitude we need in Washington,DC.
vic102482
Premium
join:2002-04-30
Upper Marlboro, MD
·Verizon FIOS

Re: dammmmmmmn

said by nasadude See Profile:
"My response to them is that I don't think there is anyone working for SBC or Comcast or any other Telco that is qualified to tell us what our needs are in our own community. You had several chances going back several years to deliver what we needed and you blew it every time. Now, get ready to do what you say you love to do, Compete."

This is the kind of attitude we need in Washington,DC.
Believe you me, its coming.
--
I tie a rope around my penis and jump from a tree, don't you wanna grow up to be just like me!!!!

edhodges

join:2003-02-20
Saint Charles, IL


edited

Re: dammmmmmmn

Yes, it's coming. Believe me. I've been on the delivery end of that very smelly stick. I know what it's like to say to my boss, "I could hurt the competitor's chances of success if I could pay for this ad or that TV spot". And I know what it feels like to have the boss say right back... So, how much $$$ do you need?"

That's a powerful feeling and the opponents of TCBB are basking in it.
[text was edited by author 2003-03-26 19:12:01]

JakCrow

join:2001-12-06
Palo Alto, CA
Damnit! What are the doom sayers going to use for excuses now?!

edhodges

join:2003-02-20
Saint Charles, IL


edited

I would only ask to change one thing...

After receiving some insight from the author of the article in question in The Kane County Chronicle, I am sorry I didn't tone my comments down somewhat. To his credit and in his defense, he has been very sympathetic on our message board to the issue.
[text was edited by author 2003-03-26 18:19:01]
WolfJaguar

join:2003-03-20
Portland, OR

W00t

Well well well, hopefully the initiative passes by the voters. I would love to see SBC/Comcast cry in pain after that debacle.

That being said, why isn't Portland going to do this? Argh!!

caleet
Radio X - Usradiox.Com
Premium
join:2002-05-29
Middletown, OH

I'm Voting YES

I moved to St Charles a year ago and was shocked that I couldn't get broadband. I had lived in two areas that had it, including the out-skirts of the Louisville, KY.

After getting a couple of responses from the good folks at the City of St Charles as to why we didn't have broadband, it became clear.

Later I obtained a slow but semi-useful DSL through Directv DSL. Ameritech would not connect me as I had not lived in the area long enough. I then had to switch to Speakeasy as Directv DSL went down. I am still not happy with the speeds that I am getting with DSL. I have missed my cable broadband.

There is no excuse for the big companies to have not had broadband out here long ago. If I could get it in the middle of nowhere in Kentucky then it should be available in a highly populated area surrounding Chicago. It is clear that they did screw it up and dropped the ball big time. I am excited to see a municipal broadband in the works. I am voting YES!
--
Charles »www.livexradio.com

linicx
Caveat Emptor
Premium
join:2002-12-03
United State
·CenturyTel Inc.
·Cebridge Connections
·Vonage

Tri-City and Broadband

My Wireless Broadband provider is the local water company. They give good service at a fair price. The service is about six months old and they've had their bumps. Overall I think the crew does a pretty darned good job. What is important to me is that they try, they don't just give lip service which is S.O.P. with most providers in this area.

Initially I tried to install DSL. The software would not install correctly, and after 18 hours in queue one weekend during which I talked to three clueless souls, I declared a mis-trial and sent it all back. Then I walked across the street to Cox Cable.

I had their Internet service for 120 days before the lines were over sold. It was glorious. After eighteen months of latency problems and excuses I changed to their low-band offering. I wasn't very surprised to find that very little changed, but my wallet was a little fatter each month, so that was a plus. When I left Cox my downloads were ten times the speed of a 56k - sometimes. Most of the time it my speed was closer a dial up connection.

My Wireless provider gives us 1500/1500. When the Internet is crowded I get anywhere from 300-600 up, but late at night I can easily pull 1200 or more down.

I predict city owned Internet services will not only thrive but will do well in the long haul as long as they remember that not all potential customers can afford, or want to spend $60 a month to get pictures of their grandkids in email.

My city confronted this problem head on a long time ago. They offer unlimited dialup for $15.95 and Wireless for $39.95. We think for a town of 10,000 it's a steal.

Maxo
Your tax dollars at work.
Premium,VIP
join:2002-11-04
Tallahassee, FL
clubs:
·Embarq

Balancing it out

I would like to start out by saying that I support this initiative. That said I'd like to see an interview with someone that represents either Comcast and/or SBC to hear what they have to say. Also, Ed never really answered
quote:
According to Kane County Chronicle, the three mayors for the affected cities this week claimed that they'll be moving forward now regardless of the vote....do you feel this could alienate residents in the area, particularly those who have been buying into SBC and Comcast's "misinformation" campaign?
He just said the guy who reported that was useless. But never said that that was never said or explained what was meant by that statement.
--
»www.maxolasersquad.com/

edhodges

join:2003-02-20
Saint Charles, IL

Re: Balancing it out

I tried to respond as best as I could in the third question of the interview. However, I'll give it another shot. Batavia and St. Charles have placed advisory referenda on the ballot. The City Administration and Electorate have stated that the law allows them to go forward. They have said they "could" go forward but they have not said they "would" go forward.

My believe is that if the vote is a squeaker either way, there will be a lot more discussion before a decision is made. If the vote is strongly opposed or strongly in favor, they will follow the will of the people.

Maxo
Your tax dollars at work.
Premium,VIP
join:2002-11-04
Tallahassee, FL
clubs:

Re: Balancing it out

Nice!!! Thanks for the clarity.
--
»www.maxolasersquad.com/

swilliams

join:1999-09-07
Mount Prospect, IL
·AT&T Midwest
·Comcast Formerly ..


edited

Ed, a few questions

Ed,

While I applaud the initiative that the Tri Cities have shown, I wonder if the average prospect/resident will care how their speed is delivered? The long term advantages that this system can provide are obvious, but will Mr and Mrs. AOL Resident even care?

Until there is a need to have the capabilities that fiber can provide, will the residents simply shop on price, something I'm assuming that Comcast and SBC would be willing to undercut once their networks are complete, since they're not above telling half truths already?
[text was edited by author 2003-03-27 13:13:50]

batageek
Slave To The Duopoly
Premium
join:2003-01-25
Batavia, IL


edited

Re: Ed, a few questions

The point that's missing is that it's not just about internet. The cable service is a problem for residents too.
The three cities provide electric service so they'd like to leverage some of the system for substation management and meter reading in the future. Economic development, etc....
Their motive for building follows a different model than the private sector.

There's simply no reason to build an HFC system (like Comcast) if you're starting from scratch (like the TriCities are.) Yes, fiber is more expensive but its longevity and higher throughput are worth the extra build cost. Long term, it's the safest bet technology-wise for the cities to make, especially when they're backing that investment with General Obligation bonds.
[text was edited by author 2003-03-27 17:49:51]

[text was edited by author 2003-03-27 17:50:15]

edhodges

join:2003-02-20
Saint Charles, IL

I read something in Time Magazine last night that gave me some additional insight.

What happened on the afternoon of Aug 9th, 1995?

I'll tell you that on the 8th of Aug, 95, Netscape announced that the final IPO price for their stock was being raised from $12 to $17.

Of course what I'm talking about is that mid-afternoon on the 9th, Netscape went IPO and the opening price was over $29 a share. It wasn't until March of '99 that Netscape topped out at around $97 a share.

What this brought home to me was that it has been less than a decade since the standard home users began to gain a general understanding that the Internet could be useful. Of course we all know that the market went nuts. Everyone and their brother thought they could sell something on the internet, through the internet, for the internet or because of the internet.

Then there was the dot.bomb and we are still recovering from that. But we will recover and more sane people with better business savvy and more stable business plans will come back and begin to work things out. The medium will once again be important. We are in the middle of a trough but a swell is coming. It won't be as big as it was nor will it have quite the energy but it will have more staying power. Now I'm aware that I've just given a rather cheesy analogy. So don't beat me up to much over it, ok?

My point is that there is coming a resurgence of interest in the internet and while everyone is regrouping is the best time to prepare.

It's late in the day and I've spent too much time digging around in wiring closets. I'm going to go get a beer. I'll think on your question some more and take another stab at it later this evening.

swilliams

join:1999-09-07
Mount Prospect, IL
·AT&T Midwest
·Comcast Formerly ..


edited

Re: Ed, a few questions

Ed,

I'm on your side, believe me. I understand and fully support the idea that you're building for tomorrow, not today and that most non BBR users and other non techies don't see that.

But I also know the Tri Cities will be under enormous outside pressure to make as much money as quickly as possible to pay off the bond holders, lest the heel nippers scream FAILURE! I'm asking how are you going to convince a mostly disinterested public to sign up for you guys rather than the incumbents, assuming by the time the fiber network is lit, you'll have cable/DSL competition.

[text was edited by author 2003-03-27 18:55:25]

edhodges

join:2003-02-20
Saint Charles, IL

Re: Ed, a few questions

That's really going to be tough and there is no way around it. In fact, that is the single most important issue that will have to be addressed in my book. All the other pro issues become moot if enough subscribers don't come on board.

I have no illusions here. This is going to require significant effort by a number of different people and groups to work through the marketing, sales, public relations and support aspects of the business plan.

I'm not so naive as to believe "if we build it, they will come." will work cover more than a very small percentage of the migrating subscribers. That being said, I also know that we have a reasonably small market (geographically) to cover and that will make the process less complex.

Now then, I'm not a marketing guy but I did have to learn how to market my small business in this environment. Some lessons I learned about this area were rather surprising.

Newspaper advertisements yielded the smallest return on investment from a volume standpoint but often resulted in the largest contracts.

Bundling services resulted in higher closure rates for new contracts.

Reliance on outsource vendors for advertising was the most expensive method of marketing but produced the highest number of qualified leads and referrals.

Active participation in the local Chambers of Commerce and not just paying the annual dues provides for better quality exposure of the company name, logo, and message.

Television advertisements will only work for a very small segment of residential customers because you are hitting the decision makers most often at home, after hours and your message is forgotten by the time your sales force is available to answer calls.

A very active word of mouth campaign will work in this environment because it is a very tight knit community.

Partnering with downtown Chicago based businesses (1 hour by train from here or 1.5 hour drive time for most local commuters) to promote telecommuting for their employees should yield a neat percentage during the early stages of deployment.

Once the utility has reached a sustainable growth rate for build out (roughly 14% of residences and businesses passed by the fiber deployment), more conventional methods of marketing can come into play. Couple this with shifting focus toward emphasizing the better customer service aspects of this utility will be an important incentive for current residents that have taken a "wait and see' attitude.

Additionally, there is a reasonable turnover rate of residents moving into and out of the community. The communities ARE growing so there will be some subscribers gained by capturing a percentage of that percentage of new comers. Same thing applies to new business development. We really have a very active economic development focus in all three cities. The administrations have each embarked on long-term, well thought out projects that have begun to yield measurable results. These results point to a growing trend for manufacturing, retail, wholesale and service companies to relocate to the Western "Collar" suburbs and away from the downtown and near West areas.

Fermi lab in Batavia will of course represent an ongoing focal point for new business and residential subscribership. Not to mention the Silicon Prairie being expanded around DuPage Airport. This is after all, right at the edge of "The Technology Corridor" area of Illinois.

Will it be easy? I doubt it. Will the demand for services reach the required level for sustained operational growth? I think it may already be near that level now. Will my little mini-marketing plan above work? Like I said at the beginning of this post, I'm not in marketing so what's listed above is what I would do. Thankfully for the Tri-Cities, I won't be asked to do anything after the 1st of April but sit down and shut up.

tschmidt
Premium,MVM
join:2000-11-12
Milford, NH
·Verizon Online DSL

NH MBN effort

Hopefully the tri-cites initiative will be approved next week.

I have been following your effort with great interest as several towns here in southern NH are investigating building a municipal broadband network. Your experience is invaluable for us as is seeing the tactics the incumbents use in an attempt to scuttle the program.

Given the precarious financial condition of the Telephone and Cable incumbents the only way folks are going to get true high-speed network access is if local municipalities build the next generation network.

Best of Luck

swilliams

join:1999-09-07
Mount Prospect, IL

Re: Ed, a few questions

Ed,

I wish you and your peers the greatest of luck this week with the vote. I'm hoping the news/Trib will cover the final results...

Octopussy2
Premium
join:2003-03-30
Batavia, IL

Re: Ed, a few questions

We will begin to see results in a few short hours....i have no sense of how this is going to go. SBC and Comcast have truly done a nasty nasty smear campaign against this initiative. How many people believed their line of bull is beyond me.

The Chicago Tribune, along with the Kane County Chronicle, Daily Herald, The Republican,(and a call-in from the Beacon)will be there. The Trib will have a photographer there too.

Here's hoping any of the cities pass this forward thinking venture!
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