FREE SPEECH ZONE | Ramsey County and Saint Paul broadband network: Plan, process need stronger review

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St. Paul and Ramsey County need a better broadband network to deliver their services effectively. They believe their plan will also bring more broadband choices to us — our homes, our workplaces, and the businesses we patronize every day. They want to create a place to where new companies flock in order to take advantage of blazing fast Internet and a reliable fiber network.

Unfortunately they are going about it all wrong and they are about to squander our best opportunity to have a choice beyond Comcast and CenturyLink.

For years now, the City of St. Paul and Ramsey County have mulled over how to bring broadband to local residents and businesses. After endless discussion and debate the two entities appear to be on the cusp of a plan to share a fiber network.

We have studied community networks nationally and are a trusted resource for municipalities considering investing in next generation technology. We have studied and documented stories from dozens of community and municipal networks.

We think the County (and indirectly the City) can do better than this plan. We certainly would not recommend anyone else starting down this path until we see some actual results.

A Little History

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The city of St Paul and Ramsey County have long relied upon a network, called the I-Net, provided at no charge by Comcast under the cable giant’s video franchise agreement. Video franchise agreements allow Comcast to use our public rights-of-way to run its cables to provide all of its services. In return for access to our rights-of-way, we get benefits in form of PEG channels (Public, education, and government channels), franchise fees, and other arrangements. The I-Net is an old, slow cable network that slows public employees and can’t provide what the City and County really need today. Because it’s free, the County and City have tolerated its shortcomings.

But the franchise agreement expires in 2013 and Comcast now wants to charge the City for the network. As reported in the St. Paul Pioneer Press, the City and County are considering a plan to team up and build a fiber network, serving both entities. The City-County collaboration is good but the plan of execution leaves much to be desired and the decision-making process has been downright objectionable.

St. Paul recognized back in 2005 that the Comcast/CenturyLink broadband duopoly wasn’t getting the job done. The City created a Task Force that produced this thorough and insightful report in 2007 [pdf]. When the economy crumbled, the report was shelved. The 2007 St. Paul report gathered dust on the shelf until the City had to act. Its Comcast-provided I-net would go away when Comcast’s video franchise expired in 2013.

The City applied for an American Reinvestment and Recovery Act (ARRA) grant. As part of the proposal, St Paul planned to include a private partner that would match funds and coordinate the project. They found a new company called Minnesota Fiber Exchange (MFE). The plan was to put two conduits in the ground — one to be used by the City and the other to be used by MFE, carte blanche. The City was passed over and had to find another way to upgrade without no grant funding.

With no stimulus award, Ramsey County decided it would move forward with that same model. In the meantime, St. Paul issued an RFP for an Institutional-Net solution but the bids were insufficient or too expensive. So after a long period of silence (during which the City mostly refused to talk or listento anyone on matters related to broadband), the City decided to throw its lot in with Ramsey County.

The Plan (…as far as we can tell)

Rather than paying Comcast its inflated rates, the County will pay MFE to build a network that will connect public facilities and will belong to the County. St. Paul will lease capacity from that network. MFE will build its own network right next to the County at the same time. The County will serve community anchors (schools, police, fire, etc.) and MFE will offer dark fiber to anyone that wants (and can afford) it.

Owning its own network will result in cost savings to Ramsey County taxpayers and a better level of service. We have seen this in many other places and most recently in Florida’s Martin County where they transitioned away from Comcast and are saving millions of dollars. This scenario plays out in city after city – Comcast exploits their monopolistic position and dramatically increases the fees for community anchor institutions. Smart local governments know they will need these networks for generations and that the need for fast, affordable, and reliable telecommunications connections will only increase. See Bristol, Virgina; Greenacres, Florida; Martinsville, Virginia; and the Medina County Schools in Ohio, just to name a few.

Comcast Hates This Idea

Comcast sees that it is on the edge of losing this lucrative municipal account and is feeding misinformation and outdated talking points to the public through the newspapers. As claimed in a Pioneer Pressarticle on the network:

“City and county taxpayers are facing significant risk by being put in a position of competing directly with many well-established service providers,” said Mary Beth Schubert, a vice president of corporate affairs with Comcast in the Twin Cities.

 

The St Paul Chamber of Commerce and the Pioneer Press reprocess the outright lie that the Ramsey -owned network will compete with the private sector for business and residential customers. Neither the City nor the County will be competing with the private sector. The City and County are serving themselves. Can Starbuck’s demand that the County throw away its coffee pots because they are disrupting the free market for coffee services? The idea is ludicrous.

For its part, the paper has printed Comcast’s absurd comparison of this project with UTOPIA. UTOPIA is a consortium of Utah cities that planned to build a $500,000,000 network to connect 500,000 residents and businesses with the most advanced broadband network on the planet. The Ramsey/St. Paul plan will connect over one hundred municipal facilities with broadband at a cost of between $10 million and $25 million. You say tomato, I say world’s largest pumpkin. No comparison.

The St. Paul Chamber of Commerce also propagates the same absurd comparison and has officially questioned a fiber network investment. The Chamber regularly acts in the interest of its biggest members, not in the interest of the many small and medium businesses in the City.

The Heart of the Problem

Residents and local businesses get very little with this plan. Sure, our taxes will be a bit lower from not being stuck with overpriced services from Comcast, but this money should be used for meaningful infrastructure that would actually result in competition Several cities across the country have gone with dark fiber and the best result thus far has been a bit of cherry picking. A few businesses in St Paul may benefit from this approach, but it will be a long time before low-income areas benefit. This is a lost opportunity to bring broadband to more people and businesses, encourage economic development, and extract the most good from a public investment.

What Should We Do?

1. We need more information. We need to see this contract and have a chance to comment on it before the City and County have made their final decisions. We don’t want another Minneapolis Wi-Fi debacle, but some of the same players are involved. Promises were made in Minneapolis, particularly in regard to a digital divide fund — but the contract was poorly written and that fund has all but disappeared. Our plan should be vetted by actual experts.

2. Our local governments should revisit the 2007 St. Paul Task Force Report. They should be building one network and they should control it.

3. The City and County should develop a telecommunications plan. The plan should enable them to put conduit and fiber in the ground at low costs in conjunction with other constructions projects during future years. Better late than never – get this process started.

4. If MFE moves forward with this plan, other carriers should be invited to get in the trench. We want more choices for our businesses and residents, so let’s make sure other companies can put fiber and conduit in the ground at the same time our public money opens it up. This will result in much more bang for the buck.

The cost of connecting homes and businesses is high, which is why the private sector has overwhelmingly failed to create competition to Comcast and CenturyLink. But local governments can make these investments because they don’t need to profit immediately. They can take 5-7 years to break even financially. In the meantime, they are creating new jobs, better education and health care opportunities, and keeping money in the local economy.

Mayor Coleman has failed to do anything but talk about the importance of broadband and the City Council has followed his lead. Recently, a St Paul a company called MISO announced that it will move 90 jobs to Eagan because it needs better access to fiber optic connections. As long as St Paul continues to rely on Comcast and CenturyLink, there will be little reason for any entrepreneurs or high tech firms to move here.

This is a major decision — it may be our best hope of actually encouraging competition in our community. We agree with the Pioneer Press on the basic premise that this issue needs more review and a transparent process. We add that experts must be involved in the discussion. We need to get this right the first time.