Dick Nordvold on the Iron Range Community FiberNet

FiberNetI just got off of the phone with Dick Nordvold, consultant to the Iron Range Community FiberNet. They recently unveiled a new web site that tracks their progress in building “state of the art communications network that will make voice, video and data services available in 12 Iron Range communities. This fiber-optic network will equal the capabilities of the best networks in the world and will be one of the few available in Minnesota.” (quoted from their web site)

I think the Iron Range project is interesting because it serves as a model for other rural communities looking into building out a network that will help the community thrive in future. Here are some of the quick facts:

First a little background for folks who don’t know about the project – then notes on my talk with Dick.

  1. The Iron Range is known for the iron ore, Bob Dylan, and amazing scenery. (You can learn more at this tourism site for the Iron Range or Iron Rang Resources, an economic development agency.)
  2. Iron Range Project is a collection of 12 communities united through a Joint Powers Agreement.
  3. The have done a feasibility study that outlines the steps for an Open Network model.
  4. You can learn more on the new FiberNet web site.

And now for my talk with Dick, I’m going to cheat and put my notes into a Q & A format and maybe take a little liberty with order of comments to keep things organized for you readers – and please note that I am paraphrasing, not quoting, Dick.

Question: What’s happening up on the Iron Range?

The feasibility is completed and in many ways confirmed what we already knew. The cost is estimated to be $47 million. It will take time or the project to cash flow and therefore a private/public partnership makes the most sense. We will get to get public subsidies and we cannot expect a return on investment within a 3-5 year cycle the way a private entity might need.

Our goal is to start with speeds of 100 Mbps and grow. We want Fiber to the premise throughout the region. We know that folks today feel that they might not need speeds that fast and for some it’s true – but it is increasing true for the businesses and in 10-15 years connectivity at those speeds will be necessary.

We are budgeting for a 30 percent take rate. This is conservative. Paul Bunyan recently did a fiber overbuild in Grand Rapids and they have found that the take rate is more than 50 percent. In Wabasha where they have fiber for digital television, the take rate is more like 70 percent.

Question: How does a community plan to come up with funding such as $47 million?

The communities are asked to guarantee a generated revenue bond of $10 million. They are also asked to invest $9 million into the project as they might invest in any other economic development strategy. Iron Range Resources has said that they will invest $9 million. That brings us to $28 million. We have other private investors who have expressed an interest totaling up to $9-10 million, which leaves another $10 million that we are working on from other private investors.

Question: I know that the Ely Timberjay has written articles supporting the project. Have people generally been positive about the project and if not how to you get them to jump on board the project?

Some local papers have been very positive; others are not. Some legislators, such as Congressman Oberstar (who just visited) have been very excited about the project; others have not. It’s out job to sell the idea to the community leader, decision makers, investors, and public.

There are some who are negative – but in earlier days those are the folks who would have thought electricity was a waste of time and money – after all we had kerosene. But to move forward we need to look forward.

So far we have flown under the radar. We are looking at this as an economic development effort. The thought isn’t that if we build it they will come – but rather if we build it they will stay. Increasingly businesses need broadband. We need to meet with the businesses to get them on board. We are planning meetings with community leaders, meetings that will be open to the public where will promote the plan.

Question: How have the incumbents reacted to the plan?

The incumbents in the area are Qwest, Frontier, and the Minnesota Cable Association; they have not been supportive. Some of them have pointed to projects that they label as failures – such as Windom, where right now the problem is that the project has been too successful. In Windom the take rates for connectivity have been much higher than anticipated and while the broadband capacity is there – the electronics are not ready to support the broadband. SO they are experiencing some growing pains. But it seems unfair to call that a failed project so early on and when those are the issues.

Question: How or why is this working on the Iron Range?

Well, it’s still in the planning phases but our strategy has been to think of this as an economic development project. It really started back to DoIT and a future research committee. We asked ourselves “What do we need 10-15 years from now?” and everything pointed to fiber.

We hope that our model of getting these communities to work together will be a model project for other rural communities.

36 thoughts on “Dick Nordvold on the Iron Range Community FiberNet

  1. was a nice chat on the phone about pricing and costs ann We will be happy to talk to groups wanting services offering with lower costs.

  2. i have sat back and stayed neutral on this but i need to ask a couple questions and after being at nxtcomm last week im going to ask.With this project has there been a look at mobility solutions as thats the future of communications especially for business people ?I am not asking this to open a can of worms but to get the best situation for the region at the best cost and future for it?Im available for convo on this just contact ann and she can get us in touch so we can discuss this and offer other solutions.

  3. The Wimax video was filmed in 2003 and said that we would have Wimax devices in the home in a couple of years. Four years later and I don’t know of any. In addition, I think Wimax is generally owned by private firms. In Minneapolis, I believe Sprint is the owner and they will be bringing some kind of Wimax network here in 2008 according to press releases.

    I believe we need the fiber infrastructure built out in this country and I’m very glad to see this project on the Range. Once in place, it will make it easier to deploy wireless networks.

  4. Yes i figured you meant the spectrum .We own some also and there is also open spectrum in the 3.65 areas .Also with sprint its highly doubtful they will launch for a while until they fix there internal troubles.

  5. Your comments make me think of something in the new spectrum auction that I think I wrote about yesterday – as of now it looks like the auction has removed the “use it or lose it clause” from the rules.

    I like that about as much as I like playing cards with someone who hides trump cards until the very end. I’m not saying it’s right or wrong but it changes the game.

  6. yes ann thats one change there is a couple more ,that just means people can buy it all up and keep from others now

  7. My organization exists to promote fiber to the home and business, so keep that in mind when considering my comments.

    In the US today, there are 345 service providers in about 1,700 communities operating fiber to the home networks. Take rates average nearly 55% – average. It is hard to have an unsuccessful deployment with that kind of subscriber take rate. Many are paying back their bonds ahead of schedule. Windom and other operators that are held up as “failures” note that none of their detractors have bothered to discuss the curent status of deployment and finances with them.

    Most communities are not running to meet some remote shareholders expectations, they are investing in their community to keep it viable, when private firms will not invest – a different game with different rules. Broadband is as necessary in the 21st Century as was electricity or telephone in the 20th.

    WiMax will be, at best, an adjunct or extension to an FTTH deployment. TV quality Video and especially high-definition video are problems for wireless solutions. Businesses worry about putting mission-critical applications over an air link. And, businesses do not re-locate to an area because it has a wireless network – but they will if there is an FTTH network in place.

    So, while spectrum will become available, and auctions will take place, and sooner or later, commercial interoperable WiMax gear will be available, the Iron Range is making the correct decision to deploy fiber to the home, and joining those communities that are seeing improved business environments because of that investments.

    Joe Savage

  8. Joe,

    Thanks for your comments! My hope is that people get broadband – in anyway possible. I suspect we might hear more from Jamie on wireless.

    I have a favor if you don’t mind. We are trying to gather info on Minnesota communities that have FTTH (https://blandinonbroadband.wordpress.com/2007/08/10/ftth-communities-in-mn-help-compile-the-list/). Would you mind checking out our list so far to see if you have any info you could add? You might not – or you might not have time – but if you do have additions I’d love to get them.

    Thanks! Ann

  9. people need more education on exactly what wimax is and the great thing is everyone has a choice .There is already lots of spectrum ,the only spectrum left to be auctioned is the 700 which wont be used until the earliest 2009 .Only question im going to ask is why are the big players in the field not extending fiber instead of investing in wimax services Thats the extent of what i will say on this as this could be argued till the snow flies.So my question is ,if fiber is the do all be all which yes its great as we use it as backhaul and provide full broadband not tuned down how come the big players who where doing ftth have abandoned that to push wireless ?

  10. i should also state fiber is not needed for a WiMAX deployment as we can use microwave to give us the same solution.
    What is WiMAX technology?
    Worldwide Interoperability for Microwave Access, widely referred to as WiMAX, is a standard-based wireless technology that allows broadband connections over long distances.
    This is actually more secure than a wired service ,if people do there homework they will see that.And another point businesses have been using wireless for years to do there transactions because of cost.wireless on spectrum can provide them there own private services which is why the big firms have dishes on there roofs to send there information threw the air on a wireless service in the 3.65 spectrum using satelite.

  11. i have one other question oh why not make it two.How long does it take to deploy ftth ? and the second is what is the cost per house?

  12. Ann i hope this is satisfactory and its always nice to be able to do this ,one of my engineers came over from the ftth industry but he has also been a main builder in the wireless and cellular side .We pride ourselves in the knowledge we bring to the industry .As for a demo i will email you an invite to view a working wimax area and to show you what this can do .As for equipment vendors they all have equipment ready as wimax is growing large in 3rd world regions .And there main reason for using wireless wimax is because it does draw industry because of its mobility .I will post the whitepapers on this later on .
    So that said i will move onto video and tv services .Im sorry to say this but IPTV is already being provided over WiMAX but yet there is a problem and it will be fixed ,it has to do with the compression because video is a bandwidth hog .And yes i will agree that WiMAX is a continuation of ftth services because we just helped continue that services 145 miles with 4 hops .People need to remember wimax is not wifi and it provides the same services as fiber without the cost .
    fiber averages 1800 per home ,wimax is 100 per home .

  13. ann i was sent this word doc from a friend .this explains what wimax does and its potential.The author is one of the analysts working within the broadband industry,I was asked not to reveal his name so i didnt .

    WiMax will impact the way we work and play
    Why do I keep harping on WiMax and its potential to impact the way we work and play in the future. Because it has the potential to truly make us all mobile all the time, just like the cell phone does today. It will provide anytime anywhere broadband connectivity to all. People who could not afford it will now be able to get broadband and in places it may not previously have been available. It enables coverage of a large geography very quickly.
    Let’s start with the basics – Think about how you access broadband on the Internet today. There are basically two different options:
    Broadband access – In your home, you have either a DSL or cable modem. At the office, your company may be using a T1 or a T3 line.
    WiFi access – In your home, you may have set up a WiFi router that lets you surf the Web while you lounge with your laptop. On the road, you can find WiFi hot spots in restaurants, hotels, coffee shops and libraries.
    The main problems with broadband access are that it is pretty expensive and it doesn’t reach all areas. WiFi access is great but hot spots are very limited in range, making coverage spotty.
    What if a new technology was available that solved these issues?
    The high speed of broadband service
    Wireless rather than wired access, so it would be a lot less expensive than cable or DSL and much easier to extend to suburban and rural areas
    Broad coverage like the cell phone network instead of limited WiFi hotspots
    This system is actually coming into being right now, and it is called WiMAX. WiMAX is short for Worldwide Interoperability for Microwave Access, and it also goes by the IEEE name 802.16. Sprint will be the first major U.S. carrier to offer it starting late this year. They have announced coverage for at least 100M by the end 2008 and 300M by the end of 2009.
    WiMAX has the potential to do to broadband Internet access what cell phones have done to phone access. In the same way that many people have given up their “land lines” in favor of cell phones, WiMAX could replace cable and DSL services, providing universal Internet access just about anywhere you go. WiMAX will also be as painless as WiFi — turning your computer on will automatically connect you to the closest available WiMAX antenna.
    Why we should care
    What makes WiMAX so attractive is its potential to provide broadband wireless access to entire sections of metropolitan areas, as well as small and remote locales throughout the world. For wireless notebook users, 802.16 will provide a big boost to the proliferation of hotspots, making it more convenient and potentially cheaper to connect. Through 802.16e, WiMAX will also span the gaps in coverage between one hotspot and another, a home and a hotspot, or an office and a hotspot.

    For many businesses, particularly small businesses that are out of reach of DSL or not part of the residential cable infrastructure, 802.16 represents an easy, affordable way to get connected to broadband.

    For industry, 802.16 provides a standard to rally around and an opportunity to shape what’s been a limited industry into something more marketable and deployable to the masses. In fact, WiMAX already has an advantage, coming on the heels of Wi-Fi. The original Wi-Fi specification was interpreted differently by different vendors, resulting in many interoperability problems as wireless LAN equipment hit the market well before there was a standard. WiMAX, on the other hand, already has a standard in place.
    Here’s what will happen if you got WiMAX. An ISP sets up a WiMAX base station 10 miles from your home. You would buy a WiMAX-enabled computer (Intel is betting a lot on thier WiMax chip set) or upgrade your old computer to add WiMAX capability. You would receive a special encryption code that would give you access to the base station. The base station would beam data from the Internet to your computer (at speeds potentially higher than today’s cable modems), for which you would pay the provider a monthly fee. The cost for this service could be much lower than current high-speed Internet-subscription fees because the provider never had to run cables.
    With your home network, things wouldn’t change much. The WiMAX base station would send data to a WiMAX-enabled router, which would then send the data to the different computers on your network. You could even combine WiFi with WiMAX by having the router send the data to the computers via WiFi.
    WiMAX doesn’t just pose a threat to providers of DSL and cable-modem service. The WiMAX protocol is designed to accommodate several different methods of data transmission, one of which is Voice Over Internet Protocol (VoIP). VoIP allows people to make local, long-distance and even international calls through a broadband Internet connection, bypassing phone companies entirely. If WiMAX-compatible computers become very common, the use of VoIP could increase dramatically. Almost anyone with a laptop could make VoIP calls.
    The killer applications live interactive multi-party video chat, wireless video gaming, VOD and live video broadcasting from the web could approach true DVD quality all of the time and with the right compression applied wireless remote HD video becomes a reality.
    Once again feel free to comment and challenge.

  14. More moving to WiMAX
    After the government threw its hat in the ring over WiMax, friends and foes of the technology have been frothing at the mouth to deliver a natty sound bite on why the standard is the wireless equivalent of a cold sore or the saviour of all things broadband. Vodafone has now announced it’s sleeping with enemy and joining the WiMax Forum. Who’s the winner here?

    The answer, in short, is Vodafone. The company has backed 3G and all the standards within the family like a good Aussie Rules fan backs its team — so far, no shocker. You’d expect one of the world’s largest mobile companies to be persistent in its love of a technology that it has spent billions on.

    However, unlike some of its less prudent rivals, it has always kept an eye on the WiMax competition. Rather than indiscriminately badmouthing WiMax like so many others (cough — Telstra and Qualcomm — cough), Vodafone has always been sure to speak of the technology in guardedly respectful terms.

    Vodafone has equally not disputed the fact that WiMax may be a threat to so-called mobile, ie cellular, broadband. Speaking earlier this year, CEO Arun Sarin said that mobile operators must move faster or risk WiMax players “eating their lunch”.

    While many have been quick to dismiss WiMax as niche and not a patch on the upcoming LTE — the successor to the 3G we know now — it looks like Vodafone is further doffing its cap to WiMax by joining the WiMax Forum, a body that certifies products equipment and promotes take-up of the technology.

    The simple fact is that WiMax is here and it’s not going to go away. While I would be vastly surprised to see Vodafone rolling out a WiMax network in any of its mature markets, it wouldn’t be entirely inconceivable if it were to tinker with the technology in an emerging one.

    At any rate, it must be better for Vodafone to be on the inside seeing how WiMax is progressing and having a hand in its development than to be on the outside like other telcos, ranting and fist-shaking about the new kid on the wireless block.

    As Steve Pusey, Vodafone’s global CTO, said in a press release last week: “Vodafone remains technology neutral as far as our future network options are concerned, and joining the WiMax Forum is a logical step as we seek to evaluate the full capabilities and potential of this technology.”

    Analysts have repeatedly pointed out that WiMax will co-exist with 3G and its heirs — there will not be a war won by either side, battlefields strewn with the corpses of dead mobiles and data cards, CTOs on crutches limping home defeated, telecoms marketing managers missing in action. Bravo to Vodafone for sitting down at the table rather than drawing its sword.

  15. We are looking to hire 9 people to work in the rf field the first of january .We will provide the specs of what we want and the pay range to be expected.Certain experience will be needed but we will make sure they are trained .We believe in providing employment in regions we provide services .This way the jobs remain within the region.

  16. Ann since we are in this conversation lets place what this service can provide over a large region without heavy infrastructure and i will leave it open to others to comment on this and have them explain the comparisons of what wired infrastructure can provide.

    There is something we can provide which is quad play .no wired service has that capability.And if they do the need advertise it because they will be the first.
    We also offer a solution to utility companies who are looking at resolving there metering problems .
    We offer mobility
    Also and its been in the news a lot We can provide public safety as well as wireless solutions to reach areas such as wireless video security at sites .
    I could go on but i would like a comparison of what other services can provide .I know many state triple play

  17. some further news for you ann .We are finalizing a deal for roaming agreement to be able to provide mobility with our services.Great news for business people as well as anyone else .With this roaming provision it means customers will be able to use there services in other states .

  18. Well ann its near time for u to make your move and i hope you enjoy the time there ,as for me im going to take a hiatus from the blog as we are taking on a large contract in Mexico to provide services threw out there rural regions as well as connecting educational centers .This is more news about regions looking to the future to take care of there communications needs .Friday im in International falls to arrange for a building to place our datacenter .Also wednesday im in south dakota to check out a nice 802.16e wimax service .This is in milbank and if you have the time your more than welcome to join us so you can blog on how this technology works .

  19. Jamie,

    Thanks for the invitation! I’d love to but we’re now 9 days and counting to my departure to Dublin so I’m afraid I can’t.

    I hope you’ll let me know how things are going in Mexico. That sounds very exciting too. And you’re timing is perfect, Who doesn’t want to go to Mexico come winter?!

  20. well i wish you the best in your travels .Yes i will update you on the project,this is to provide highspeed services into regions in the area with wireless broadband services ,providing full mobile communications threw out the regions.This project will provide services to near 28 million people and some large corporations wanting services.That region is growing fast and with there future thinking they will have full services by using this technology.

  21. When you get to your destination let me know how your wimax connection works .I do know that area has been serviced by wimax so i would love to here how you like it.The world is moving in that direction so it lets u become a mobile commuter.And if you look a little deeper aircraft are also being fitted with wimax technology.Boeing is going to test it in there planes to allow its customers the complete mobile solution

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