• 29Mar

    Hello all,

    I thought you might like an update on Broadband / Cable. There has been a lot of news.

    What you should to do:

    1)   Contact all council members & mayor by email, phone, social media, and in person and tell them that broadband is important and the entire community deserves quality affordable broadband.

    2)   Write a letter to the editor on the importance of community broadband and why you don’t think the current environment is OK.

    Common Q&A

    1)

    1. Q: “I am more concerned about the lack of competition in cable, why do I care about broadband?”
    2. A:

    i.     I realized I was confusing some people It is important to understand that the city does not prevent other cable companies from coming to Rochester. The reason that they do not come here is that they would have to build a $50 million (estimated) network and hope that they can sign up enough customers to pay for that cost understanding that the incumbent providers will try to bankrupt the new competitor with temporary specials. By creating our own municipally owned broadband utility we can permanently ensure competition.

    ii.     The network that can deliver broadband can also deliver video. The city could deliver video services or contract with a 3rd party to do so or simply rent our network to private companies to deliver these services. I believe the study will show that video services can help pay for the cost of the network.

    2)

    1. Q: Do community broadband network work?
    2. A: Yes, and they are incredibly popular as well. Right now there are hundreds of publically owned networks around the country. Alcatel Lucent is currently working with 30 cities in the United States and all 30 are cash flow positive (not losing money).

    3)

    1. Q: Can the city own a broadband network?
    2. A: Yes, the FCC has made this crystal clear.

    4)

    1. Q: Does the city need to have a referendum for broadband?
    2. A: No, the state of Minnesota has a 100-year-old law that states that cities must have a referendum to operate a telephone exchange. If we, as a city, wanted to bundle telephone with video and broadband we would need to do a referendum. That would be silly though as anyone can get phone through broadband easily. Additionally we could partner with a private vendor to offer those services.

    5)

    1. Q: How much would this cost?
    2. A: We are trying to evaluate this. If a system cost $50 million that would translate to about $3 per home / business per month.  In other places the creation of a public network typically reduces costs $20 or more per month. Currently broadband in Rochester costs $60 per month for regularly priced broadband.

    6)

    1. Q: What if I don’t want government competing with private industry?
    2. A:

    i.     This has more to do with ideology. We already have government services provide in water, storm water, electricity, sewer, police, fire, education, etc. I like to remind people that RPU’s customer satisfaction is around 90%, what do you think Charter’s is?

    ii.     There are options where we could build out a fiber system and lease it to a private business. I suspect this will increase costs and decrease service as we introduce a profit motive.

    iii.     The one critical thing that we need is community ownership of the network. If we don’t own the network we will just find ourselves at the mercy of another company.

    7)

    1. Q: What if the system fails?
    2. A:

    i.     The reason we study this ahead of time is to ensure that it won’t fail. We understand that if we created a municipal network Charter, CenturyLink and others would try to price us out of business.

    ii.     If the network never produced a penny of revenue the cost to the average family or business would probably be around $3 per month. That is before savings to local governments.

    iii.     Define fail… In the case of Monticello the finances collapsed however the average citizen is saving about $25 dollars a month and has far better service than before.

    8)

    1. Q: What about Charter’s jobs in Rochester?
    2. A: Charter is not a charity. Their jobs in Rochester are here because there is a business case. They also refuse to indicate home many of these jobs pay a living wage, I suspect many do not. The reality is that Charter is an out-of-state corporation that takes a great deal of money out of this community forever. Whoever provides broadband in Rochester will have a number of jobs here. Overall we would be far better off by keeping all that broadband money in the region.

    9)

    1. Q: Isn’t CenturyLink already investing in Rochester?
    2. A:

    i.     Yes they are, so is Charter however this is unlikely to help many homeowners. Both companies are interested in serving the most profitable customers, which does not include existing homeowners.

    ii.     2 companies is not a competitive marketplace. While it is more competitive than just Charter we would need half a dozen before we could expect to see real competition in terms of price, speed, and customer service.

    Posted by mwojcik @ 3:09 pm

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