[RTC List] local hosts - Why are we held hostage?

[Keri Raphael]

Thanks Larry, for this writing.  I agree that the $500K study money should
have been used to actually *do* something about the issues.  Most of already
knew what the study 'discovered' and would have been glad to offer that info
for free to any PTB wanting to know.
Keri

On Sat, Dec 27, 2008 at 5:45 PM, Larry Goldberg <larry at northcoast.com>wrote:

> I would like to reply to a couple of the ideas recently posted having to do
> with local hosting, peering and fiber access.  Having a little experience in
> this matter (most of you know my background so I won't bore you) I've
> watched these issues kick around here for many years.    I agree with
> William Van Hefner on one important point: for the cost of the past studies
> (e.g. RCC study at $500k which has taken the better part of a year to
> complete with little new knowledge gained) we could have solved most of the
> problems we've been talking about regarding redundancy, local peering and
> last-mile rural access.  Over the past year I've been working with a group
> of other local IT professionals to address some of these issues with a
> private-sector solution. We developed a business plan which we've discussed
> with several RTC members privately and have researched many of the issues
> discussed in this list and in the public forums (Times-Standard, public
> meetings, etc...)  Suffice to say, that at the point of capital development
> to launch such a project this past Summer, we had to shelve our plans for
> the time being given the Wall St. meltdown, seizing of credit markets and
> lack of sufficient local capital.  It could still be done, but won't be
> anytime soon given the current economy.
>
> Here are a few of my personal findings:
>
> 1) The need for a second fiber line is unrealistic and probably not
> necessary.  There are only a handful of companies (notably SuddenLink,
> Verizon and several other "big boys") who really need additional bandwidth.
>  While the area's need for bandwidth is growing, there isn't a reliable
> business case to make for the expenditure required (probably >$5 million).
>  Yes, everyone WANTS more bandwidth, but most people are not prepared to pay
> a nickel more for it.  The RCC study, if you believe their results (which I
> don't), basically comes to the conclusion that the vast majority of users
> (commercial and residential) are simply unwilling to pay more the $50/mo.
> for high bandwidth services.  It is a very slim minority who are willing (or
> able) to pay over $75/mo.  The commercial market in this area is very
> similar to a residential market - there are too few "heavy users" to justify
> the business case for the investment required to provide additional
> "alternate/redundant" paths.
>
> 2) For YEARS this area was able to exist on microwave transmissions.  I ran
> my initial company, Northcoast Internet, completely on Pacific Bell's
> service which was exclusively based on microwave links.  Yes, it had
> disruptions periodically, but if used in combination with existing fiber, as
> available today, it would be sufficient to provide redundancy.  With
> multiple microwave paths (e.g. north to Crescent City and east to Redding)
> there would likely be ample redundancy to handle virtually any disruption
> from any one link (including the fiber). With microwave technology (a well
> established and reliable technology) it would cost a FRACTION of fiber and
> yet provide plenty of bandwidth (it's possible to get up to 1 Gb microwave,
> so it's highly scalable) and it avoids most of the pitfalls of fiber in an
> area like this (rights-of-way, environmental impacts, earthquake
> vulnerability, etc...)
>
> 3) There are currently viable alternate paths ("redundancy") which exist
> and are locally supported.  101 NetLink is a local company (out of
> Garberville) which offers an independent (non-AT&T) microwave link to the
> Internet via Ukiah.  Seth has spoken to our group several times and his
> technology is stable and proven.  He currently serves "last-mile" folks in
> the S. Humboldt hills and now has moved up to the Humboldt  Bay area and is
> providing service in Eureka and Fortuna and parts of Arcata.  If you are
> truly concerned about supporting a local business and getting non-AT&T
> service, check out 101 NetLink.  As much as I believe we could form another
> wireless provider to offer additional services, Seth is doing a fine job
> within his market and he's a local guy we should support.
>
> 4) For all the talk about the fact that "our community leaders are out of
> touch" we're going to need to realize several things:
>  a) Local leaders are not technically oriented, but they'll come around
> when they understand the nature of the problem and the solution if it's well
> presented and backed up with facts.  A good example is how we organized this
> area (primarily with Tina's dedicated help) to get the fiber impasse
> straighten out when SBC and CalTrans got into a pissing contest which hung
> up our fiber line.  We have it now, thanks to the efforts of many community
> leaders (including the RTC), and have barely tapped the bandwidth to date.
>  It's hard to make a case for a second fiber when we haven't tapped out the
> existing fiber yet.
>
>  b) AT&T wants to milk the revenue for as long as possible to pay off their
> investment, so I doubt they'll fund a second fiber cable.  Local leaders can
> do little more than beg for service and probably the most effective action
> they can take is what they're doing now by organizing a lobbying effort with
> the California Emerging Technology Fund for leveraging state money with CETF
> funds to encourage more competition and get broadband to the "last mile".
>  They're working with the CPUC and some results may eventually come of their
> efforts, but don't hold your breath.
>
>  c) Much of the problem is NOT with the last mile but with the 'middle
> mile" in fact.  In searching for affordable wholesale bandwidth, we found
> that it's a very difficult proposition to find bandwidth at an affordable
> rate.  The key is to own a separate network (e.g. 101 NetLink) and negotiate
> with 3rd party providers in places like Ukiah or Redding.  Local leaders
> don't get this and in reality probably can't do anything about it.
>
>  d) Given the current state of the economy, we're all going to be luck to
> just hang onto what we currently have.  The state is broke and while new
> infrastructure money may be coming from the Obama white house, it's not
> going to happen overnight and it won't necessarily flow to this area.  We
> need to be realistic about what we can accomplish and focus on a single,
> realistic goal.
>
> 5) There is a lot on the horizon which could impact many of these
> discussions.  There are companies like the one I mentioned several weeks ago
> - Open Range - which aren't even on the radar yet who are planning major
> moves in providing broadband to rural areas (Open Range is talking about a
> WiMax terrestrial distribution network utilizing a satellite-based
> backbone).  I don't know whether these kinds of companies are for real, but,
> as with Clearwire, they have major backing and with the stroke of a pen,
> they could commit millions to the effort without even checking in with us.
>  As Gregg Foster spoke at the last broadband conference, there is a company
> now negotiating to build a new fiber line over PG&E's right-of-way on Hwy
> 36) - all in "stealth mode" which is opaque to the public.  I'm not in favor
> of this approach, but it's the reality today in this marketplace.
>  Technology is changing too fast to be able to predict the future, but
> suffice to say, it's probably not going to be what we expect.
>
> 6) The lack of local investment money is a real challenge to developing
> local solutions.  I've raised considerable capital in the past, so I have
> first-hand experience in what it takes to raise money up here.  Until
> recently (!), investors wanted a rate of return commensurate with Wall St.
>  Any project which can be built locally simply cannot compete with other
> investments on Wall St.  This may be changing due to the reality which has
> been exposed in the national economic meltdown, but I challenge any of you
> to raise the funds necessary to develop a competing service.  Yes, it can
> probably be done, but it's takes someone (some group) to do it.  For all the
> talk, it's a real challenge to pull it off (and I know having built and sold
> three IT companies in this area).  Yes, it would have been far better for
> the $500k from the HSU RCC study to have simply built the project, but it
> won't happen.
>
> Don't expect someone else to do it - if you think there is a business case,
> do it yourself.  Seth at 101 NetLink has done it and to his credit he's
> survived this long, but I'm sure he has battle scars to show if you asked
> him.  It's tough providing an independent Internet service and there are
> plenty of good reasons why others haven't done it, despite the logic of why
> it would be such a good idea.  I share many of your frustrations, but have
> learned to "break my truth on the rock of reality."  We are nowhere close to
> where we want to be, but we're a whole lot further along than we used to be!
>  Count your blessings and roll up your sleeves to work towards a better
> future.
>
>
>
>
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