We had a great virtual audience for the webinar today. I thought it was a great session and took notes as best I could – but there was a ton of content. We also recorded the call – and your welcome to download the audio file. And check out the PowerPoint below:

Here’s the official description:

Broadband Policy – As a warm-up to our December conference, learn about the critical issues that the MN Broadband Task Force will be considering, including the role of the public sector in broadband network deployment and alternative network management practices (network neutrality, pricing, bandwidth and download caps). A panel of experts will provide perspective on each issues.

Here are the speakers:

Bil MacLeslie from ipHouse
Steve Downer from MN Municipal Utilities Association
Randy Young from MN Telecommunications Association 

Here are the notes

Randy Young called in from the National State Regulators Conference (energy has been the big topic there – as opposed to telecommunications).

ConnectedNation is going to be helpful in getting the lay of the broadband land. Past surveys have shown that broadband has been deployed almost ubiquitously through independent telcos. Qwest is more helpful in the Cities than rural areas. Most companies are working on fiber to the node at least. The big problem with broadband now is the donut ring – so broadband can get to central office – but the residential and businesses outside ring of city/central office are under served. (Anyone beyond 5,000 ft from CO.) Speeds are getting better; lowest top speed is 1.5Mbit/sec but customers are buying lower speeds.

Municipal Networks deploying FTTH – there are concerns: it accentuates the donut hole problem. City stays local but doesn’t get the areas beyond that 5,000 ft from CO. Costs for deploying fiber to folks beyond city limits are very high. So you get into a situation where the city cherry picks business and can’t serve folks remote folks – and then a business can’t get ROI once low fruit is picked and only remote folks are left.

The PUC used to regulate rate of depreciation for telephone industry but it hurt folks needing to invest in new equipment. For fiber most people are depreciating equipment over 20 years. But the equipment t that’s necessary to light up fiber can be difficult. 2/3 of cost of project is fiber; equipment is 1/3 – but you want to depreciate that equipment over a shorter amount of time.

Once government buys an asset they tend to keep it as long as possible so it’s hard for a municipality to keep up with the equipment necessary to run a telecommunication service. Providers of FTTH where it’s city and surrounding areas – maybe 10percent of cost of project is electronics because the fiber is loner and more expensive.

There’s a risk to the tax payers when a municipalities are 2nd or 3rd provider in an area. In Barnesville and Cross Lake, they have provided telecommunications because no one would come into the area so they are in a different boat. There’s more risk when there is an incumbent.

Municipal projects have not proven themselves financially.

Steve Downer

We hear from private providers that they want a competitive advantage and they cloak it as paternalistic concern for taxpayers. We heard this with electric facility and have heard it ever since.

The donut theory is an interesting debate. If private providers really wanted to serve areas we could.

Municipal Electric Utilities – average utility serves 2500 people. They tend to be conservative and the fact that they would consider the risk involved is telling. Most got into electric because there was no service or inadequate service.

We don’t evangelize the idea of municipal broadband but we’re here to support the right and ability of a city to provide the service they need. Chaska, Detroit Lakes, Alexandria – they all went to their incumbents to ask for service and the providers said no. SO the cities moved forward to provide service.

The utilities have not looked for federal or state money. They know how to run a business. They are happy to partner with providers.

The independent and the municipalities can sound alike. They know they need services and they move forward to get the services they need.

Depreciation is another issue– maybe we need to get some accountants to look at it. But Qwest and Barnesville are different animals – we need to treat them equally but recognize the difference.

Being a second or third entrant in an area is a different question – mostly cities would like to work with providers. But that doesn’t always work – take Monticello as the example. Now the incumbent is suing the city after the city went to them first to get service.

Windom is an example of a municipal broadband network that has been successful. Projections for 4-5 years are good; they’re only 2 years into it but it’s been popular.

Question: Steve, Is there a fear that the Federal Government will regulate to prevent municipalities from providing broadband services?

There is less possibility of that now after the last elections.

Question: Will the availability of White Spaces Technologies make it easier for communities to offer broadband services?

Yes – if the spectrum is available, it’s available.

Discussion taken from chat feature on White Spaces:

Chad Haatvedt: Will the availability of White Spaces Technologies make it easier for communities to offer broadband services?
christopher mitchell: We can hear
Steve Downer: As far as white spaces, I haven’t heard any discussion on that possibility.
christopher mitchell: I think white spaces will make it easier, but it will be 1-2 years until devices are available, then years of figuring out how to roll out on a community wide basis. Not a good solution for next year, sadly.
Chad Haatvedt: The White Space model should(?) eliminate the need for fiber/wire to the rural users.
christopher mitchell: I think white spaces will offer mobility in rural areas, but cannot imagine it matching the capacity/reliability of fiber. We ran phone and electricity to every house, we can do fiber if we want to.
Chad Haatvedt: I have fiber to my house, but the data speed is not adequate to get much online content. I cannot even use netflix, as the bandwidth will not allow streaming at even VCR quality.
christopher mitchell: Chad: good point, fiber is capable of much, but can also offer low quality depending on how it is run

Network Management is a big issue…

Bill MacLeslie

Network Neutrality keeps access to the info free. A neutral network means two things – equipment should be interoperable. Content neutrality provides access to info regardless of where the info sits – whether your provider maintains that info or whether another network provides that info on their network.

The issue is people getting access to all of the info they want regardless of their provider.

Download caps. Content is king and the king is getting fat. You can now download HDTV versions of programs – so those files are getting bigger. That hurts the access providers. ipHouse has seen a jump in traffic in the 35% in individual accounts in the last year. But the traffic has jumped more than 100 % in the last 18 months. There are about 5-6% of users who are excessive bandwidth users.

Now access providers are not trying to monetize traffic – but the all you can eat model is not working anymore. So we’re starting to charge the big eaters (excessive user). Once a provider labels you an excessive user they may charge you fees, throttle your service or cut you off.

Access to networks by competitive providers. I want to download 15 movies per day versus I want to download 15 movies a day from your competitor.

Most providers want to provide access to content – but access providers don’t own content and so they can’t make money on the deal, which makes it hard to serve folks. Access providers know that there are just a few excessive users but they are taking down the network unless access providers find a way to monetize the relationship and needs.

Policy needs to be put in place quickly. Obama is going to hold fireside chats via YouTube and that’s going to push the need for broadband.

Access providers generally can work easily with content providers. It gets tricky when the access provider is the content providers.

Policy discussion should revolve around providing access to users. So if an Internet tax gets passed – does that leave the access providers with tracking down data on usage? That would be very difficult. Also data collection plans don’t protect privacy of subscribers. If providers get into collection of data – that slips into data management not data delivery.

(You can see more from Bil on his blog.)