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

[William Van Hefner]

All,

Larry makes a lot of great points here. There are a couple of other points
that spring to mind...

1. Keep in mind that any "Obama money" that might be coming is not just
going to appear out of thin air. The money HAS to come from somewhere.
Unless he knows something that no one else over the course of U.S. history
did, Obama has exactly two choices as to where to get that money. He can
either a.) Raise taxes; or b.) Essentially tell the U.S. Treasury and Fed
to fire up the printing press and start printing a bunch of extra money to
spend. In the case of scenario A, any public funds raised through taxes
will be at the expense of the private sector. That being the case, you can
expect there to be a corresponding loss of available funds available from
private sources. In other words, private spending will simply be replaced
by government spending. Essentially, it's a wash. With scenario B,
printing extra money will simply raise the U.S. deficit and directly
result in inflation that will make all of our spending money worth less.
So, while jobs may be created and new services are made available, they
will inevitably cost much more than they cost now. There is no money for
nothing, or checks for free, I'm afraid.

2. Our "community leaders" are politicians. It's an unfortunate fact that
politicians don't do anything for "free". They expect something in return
for their support. Whether it be votes, campaign contributions,
endorsements, political favors or whatever, there are few who have been in
office any length of time that don't owe favors to special interests, and
AT&T spends more on lobbying and political contributions than every
independent ISP in the country combined. Unless you have something to
offer politicians in return for their support, you can expect very little
in the way of meaningful cooperation. We are at a huge disadvantage in
this regard at the moment. If we REALLY want to have an influence on
local, state or national issues, we will eventually need to start swinging
out support to politicians who make a commitment to do what it takes to
achieve our goals. As much as I dislike getting involved in politics, we
are going to need to take a much more aggressive role in the future if we
are ever going to get our point across. It's like the principal of the
"carrot or the stick". At the moment, the RTC doesn't have a very big
carrot and no stick to speak of.

I think that the single most important thing that anyone out there could
do to improve matters right now is to start throwing as much business as
they can to independent providers like 101NetLink. If AT&T starts losing
enough customers, they will eventually be forced to take notice. Money
talks, and its the pioneers like 101NetLink that really deserve our
support.

-- 
William Van Hefner - President
Vantek Communications, Inc.
e-mail: vantek at humboldtonline.com



On Sat, December 27, 2008 5:45 pm, Larry Goldberg 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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