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Municipal Report
Municipal broadband and economic salvation
by Karl Bode 10:11AM Friday Apr 30 2004
A growing number of economically stagnant communities have been turning toward municipal broadband to cure what ails them. While they're often simply looking to bring broadband to the under-served, there's frequent predictions that bandwidth will act as some kind of economic panacea.

This 2003 report out of Wilkes Barre, Pennsylvania is one such example. By simply filling unused steam ducts with fiber, one local businessman claims he'd create 300-500 jobs for the depressed region, with salaries around $53,000 per employee. "When people read about Wilkes Barre it's no longer about the flood or George Banks, it's going to be about us leading the nation in technology," promises Thom Greco, the man behind the push.

But more than a year has gone by since that report, and Wilkes Barre has not become Tokyo, much less seen much progress in terms of bringing fiber to the people. Greco is still looking for funding for his fiber dream, saying he'll offer subscribers phone, TV, and data services for around $140 or $150 a month. He's also hoping his eventual fiber network will one-day be an off-ramp between Internet 2 and several area educational institutions.

But are predictions of economic salvation over-stated? Are they used by municipal planners simply to gather area support? Is bandwidth a panacea?

According to recent data (pdf) from the Strategic Networks Group of Ottawa, such projects really do have a positive impact on local economies. The township of South Dundas, 66 miles south of Ottawa, built their own fiber-optic and wireless network to provide service to the under-wired of the region. According to community leaders, the move is seeing significant results.

The community spent $975,000 to build and maintain the network, and as a result has witnessed 62.5 new jobs, $2.1 million in commercial expansion in the region, and $105,000 in increased regional revenues and cost-savings. The Dundas study also indicates that the area should witness a growth in gross domestic product to the tune of $18.9 million over the next two to four years.

This week MuniWireless offered up a similar success story in the states. Verizon refused to wire the 6,000 person town of Scottsburg, Indiana because the company believed there wasn't enough interest to make their efforts profitable.

Instead, the town created a wireless municipal broadband network that piggybacked on local power company fiber. In the process, the move saved some 60 jobs at a local Chrysler repair shop that Corporate headquarters was going to close if high-speed wasn't soon available. According to the town's mayor, the network cost $385,000 to create, ultimately saving the community $6000 per month in telecommunications costs.

Obviously, as efforts in Tacoma, Washington indicate, economic revival takes a lot more than simply burying fiber, setting up lawnchairs, and waiting for an industrial mecca to develop. Bandwidth does however seem to provide a fairly stable foundation for construction.

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waynemr

join:2002-01-28
Madison, WI

Is there a link for this?

Is there a link for this info? "According to recent data from the Strategic Networks Group of Ottawa"

Karl Bode
News Guy
join:2000-03-02
kudos:39

Re: Is there a link for this?

Added a link.

See pdf: Economic Impact Study of the
South Dundas Township Fibre Network

»www.dti.gov.uk/industries/teleco···0603.pdf

Recent Globe and Mail article in PDF:

»www.sngroup.com/Globe%20&%20Mail···icle.pdf

minidu
Premium
join:2002-09-28
Cheboygan, MI

Wow

After reading that I'm really impressed by the numbers and such...

I'm seriously thinking about presenting this to the city council where I live.
--
Experience -- a great teacher, but the tutition fees... . BOFH
BosstonesOwn

join:2002-12-15
Wakefield, MA
Reviews:
·Verizon FiOS

Re: Wow

said by minidu:
After reading that I'm really impressed by the numbers and such...

I'm seriously thinking about presenting this to the city council where I live.

Once you do that you do realize Who ever your telco and cable companies are will come in and smear your campaign right.

Look at the fools near Chicago who got the campaign stopped and then got price increases. That was humorous and I still laugh when i think about it.
--
This package does not contain a winner...

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

Re: Wow

Hopefully they are ready to redeem themselves here and are willing to get this back on the ballots for Nov. 2004. If residents are fools enough to turn this project down twice....then no one can help them and they get what they deserve. Can't say we didn't try to warn them, and no one is laughing here now. Maybe the residents here might finally believe Comcast and SBC don't care about their taxes?! (Which was such a bogus argument to begin with....).
--
It's muni-licious! »www.tricitybroadband.com

JTRockville
Data Ho
Premium,MVM
join:2002-01-28
Rockville, MD
said by minidu:
After reading that I'm really impressed by the numbers and such...

I'm seriously thinking about presenting this to the city council where I live.
Great idea minidu See Profile], I was thinking of doing the same.

said by Page 15 and 16 of the EIS posted here by Karl Bode See Profile:
...snip...

• 19 out of 38 (50.0%) businesses with broadband access* to the Internet experienced job growth. This number includes 24 organizations using the fibre network, 13 of which (54.2%) experienced job growth.

• 10 out of 37 (27.0%) businesses with dial-up access to the Internet experienced job growth.

• 1 out of 18 (5.6%) businesses with no Internet access experienced job growth.

* Due to difficulties with discrepancies between Internet Service Providers (ISPs) serving South Dundas, potential and actual download speeds, broadband access is defined in these findings as Cable, High Speed, Fibre Optic or Wireless connections to the Internet.

...snip...

These findings suggest a correlation between job growth and the use of the Internet –
particularly with broadband access. In the following sections, these effects will be
examined further by controlling for the effect of industry sector and size of the
organization on job growth.

...snip...
I wonder if similar studies were done during deployment of electricity or telephone service.

woody7
Premium
join:2000-10-13
Torrance, CA

Great....

The more communities that do this weather 100% successful or not will show that they have the will where the big players don't....atleast some one is trying instead of saying no need, not enough revenue, to expensive....etc.... If we are the "Industrial Power" that we claim to be, why are we behind the curve on this one?
--
BlooMe

jap
Premium
join:2003-08-10
038xx

1 edit

Re: Great....

said by woody7:
If we are the "Industrial Power" that we claim to be, why are we behind the curve on this one?
Near religious zealotry about privatization: efficient for short term monetary gains but lousy for longterm, balanced, sustainable anything.

Swingerhead
Premium
join:2004-04-06
Richmond, VA

Can I have that job?

Can I have the .5 job, since I really only do half of my work in a day since Im surfing this site all day....

The community spent $975,000 to build and maintain the network, and as a result has witnessed 62.5 new jobs, $2.1 million in commercial expansion in the region, and $105,000 in increased regional revenues and cost-savings.
BosstonesOwn

join:2002-12-15
Wakefield, MA
Reviews:
·Verizon FiOS

Re: Can I have that job?

said by Swingerhead:
Can I have the .5 job, since I really only do half of my work in a day since Im surfing this site all day....

The community spent $975,000 to build and maintain the network, and as a result has witnessed 62.5 new jobs, $2.1 million in commercial expansion in the region, and $105,000 in increased regional revenues and cost-savings.

Probably a part time job for a teen in that .5
--
This package does not contain a winner...
BossTanaka

join:2004-04-30
Buford, GA

Needs a federal/state subsidy, if you ask me.

I think this is the answer to small towns where the phone and cable companies do not want to invest the capital for what they see as small or non-existent returns on investment. I know its much more attractive to the big companies to go after 50K-5M population areas than one with 2-5K.

Of course, those paying taxes in big towns and cities do not want to see their state/federal tax monies to going to help the hicks in those small towns.

jap
Premium
join:2003-08-10
038xx

1 edit

1 recommendation

Re: Needs a federal/state subsidy, if you ask me.

said by BossTanaka:
those paying taxes in big towns and cities do not want to see their state/federal tax monies to going to help the hicks in those small towns.
Yup, but them there C-slickers get all pissy when on vacation in those same small towns & their cellphones don't work & the internet cafe' (aka gas station + restaurant + community center + post office + internet cafe) is on dial-up.