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

Mon Dec 29 11:38:28 PST 2008

This all seems very short sighted to me. I am enormously proud of RTC and the level of innovation its members have brought to the North Coast, but at times wish the bellyaching would take a breather. Barak Obama sees a future where the stability and economy of our country is tied to ubiquitous high quality broadband. For the first time since the middle of the last century there is serious attention, and perhaps even some commitment to equitable development of healthy communities in rural America. Broadband is a central feature and because of my friends in RTC and their (your) persuasive arguments I have come to believe that this is the correct focus.

It does seem obvious that whatever the usage is now in our and other rural areas, the trend will be a swift increase. UC San Diego projects a thousand fold increase in data transmission in the next ten to fifteen years among existing business, education and health care, putting an effective end to the utility of some current delivery systems. Local innovators and those from out of the area will continue to, guess what, innovate. We do not know what the matrix of service will look like. In the meantime the RCC report that HAF helped fund has been through peer review by rural communities, CTF staff and board and PUC staff and called the model for rural California before its release. Much of what is in it will be stuff you know because of where you work. But it is not known to policy makers, out of area investors and political forces from out of the area who have little or no reason to be interested in us unless we are in some way ahead of the pack, providing a model for other rural areas.

Our region has benefited extensively from taking leadership positions and thereby attracting investment, for example in securing support for environmental action, telehealth and telemedicine, the expansion of community clinics and other endeavors. It takes real investment on our part, and of course it is educated speculation that it will pay off. We, and by "we" I mean a huge number of for profit and NGO innovators on the North Coast, have secured many, many millions of dollars using this approach. Far more than any other rural region in California. I guess the alternative is to post signs on telephone polls in Sacramento, DC, and outside the PUC in San Francisco protesting that we already know the answers to their questions, but I think history shows that we are ahead by making the case persuasively to those we need on our side to serve our region well.

Peter

________________________________
From: list-bounces at redwoodtech.org [mailto:list-bounces at redwoodtech.org] On Behalf Of Keri Raphael
Sent: Sunday, December 28, 2008 9:41 AM
To: Larry Goldberg
Cc: list at redwoodtech.org
Subject: Re: [RTC List] local hosts - Why are we held hostage?

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<mailto: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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