Here’s the pop quiz for today: If you wanted to use your garage for a high-tech startup, one that was going to require a gig of connectivity, where would be the best possible place for that garage to be located? Silicon Valley? Raleigh-Durham’s Research Triangle? The Twin Cities?
Wrong, wrong and wrong. The fastest, cheapest, and most reliable broadband service in the U.S., the kind that high-tech companies demand, is currently located in Chattanooga, Tenn. The reason, says Christopher Mitchell, director, Telecommunications as Commons Initiative, is that the Tennessee town made a commitment to building a publicly owned fiber network back in the 1990s, and eventually became the first place in the country to offer everyone in the community access to the much-sought-after “gig,” the ultra-high-speed 1Gbps network connection.
Bridging the divide
Mitchell works for the Institute for Local Self-Reliance (ILSR), a 20-year-old nonprofit organization based in Minneapolis. The institute recently released a report, Broadband at the Speed of Light, that details how Chattanooga and two other cities — Lafayette, La., and Bristol, Va. — were able to build their own citywide cable and fiber-to-the-home (FTTH) networks. The cities are three examples from more than 150 communities nationwide which have battled taxpayer skepticism and opposition by telephone and cable companies to create municipally owned broadband networks.
These networks, says Mitchell, are far superior to Twin Cities’ systems in price, speed, and reliability. They are also a positive step forward in closing what experts refer to as the “digital divide,” which, according to the Federal Communications Commission (FCC), means that 65 percent of all Americans have broadband access at home, but, in households with less than $20,000 in annual income, only 40 percent do. Nationwide, half of all Hispanics and 41 percent of African-American homes lack broadband.
More than movie downloads
If you’re thinking that the only benefit to ultra-high-speed broadband is that you’ll be able to download the newest blockbuster movie faster, you’re missing the bigger picture, Mitchell says. Broadband is increasingly becoming one of the infrastructure requirements that help attract and retain “creative-class” talent to metropolitan areas. In the course of interviewing subjects for his study, Mitchell met people in Chattanooga who moved there instead of Silicon Valley, motivated by the high quality and low cost of the broadband connection.
In a community approaching half a million in population, city officials report that in the three years since fiber launched, Chattanooga has added 4,800 jobs and $1.3 billion in capital investment from advanced manufacturing, telecommunications, and technology-oriented companies. “Businesses have moved from Knoxville, which is 100 miles away, because the cost for broadband is eight times lower in Chattanooga,” Mitchell says.
Job creation, sensible location
And with many workers wanting to work remotely at least some of the time, companies are sometimes willing to locate to geographical locations that make more sense technologically. One example from the study is that of PixelMagic, a digital-visual-effects company, which set up shop in Lafayette, La., during the filming of “Secretariat.” They were impressed that LUS Fiber, the municipal broadband network, allowed for very affordable and high-speed remote work — a 1Gbps tier in Lafayette costs about $1,000 per month, which, prior to their entry in the marketplace, was a minimum of $20,000 per month. Spurred by this incentive, the company decided to keep a satellite office in town in after the film was completed. The local high schools and colleges, Mitchell reports, have now added computer graphics to their curricula, and entry level jobs at PixelMagic are being filled by local residents.
Can the Twin Cities catch up?
In an era when just this kind of new job creation is the stated goal of every politician, Mitchell remains frustrated at the quality of broadband infrastructure in the Twin Cities. “Minneapolis and St. Paul are making a bet that it doesn’t matter if we have lower-quality access to broadband than other cities. Five years ago, Minneapolis began subsidizing a wireless network run by a private company that is cheaper than cable, but offers slower speeds and lower reliability. St. Paul has spent years looking at a number of different investments that could, in the short or medium term, bring better broadband to residents, but for the moment they seem to have decided that those investments are too risky,” Mitchell says.
And he notes that while these decisions may feel political, they trickle down to the personal level very quickly.
“Every day I feel I limited by my broadband connection,” says Mitchell, who works in Minneapolis and lives in the Snelling-Hamline neighborhood of St. Paul. “It takes longer to do basic things online, much longer to transfer files and it wastes an incredible amount of time.”
Cities face challenges
Still, it’s a thorny situation for civic leaders, many of whom are looking uneasily at recent events in the city of Monticello. Faced with lower-than-anticipated revenues for a high-speed Internet project, the city stopped making payments on $26 million in bonds that had been used to build the network.
The challenges posed by municipal ownership were also mentioned by Lee Helgen, former St. Paul city council member, who noted that Chattanooga, Lafayette, and Bristol already were operating electric service for their communities. “That gave them a utility as a point of customer service with a strong reputation and customer base,” Helgen says.
Perhaps even more important, he says, is that the communities enjoyed strong grassroots support for their broadband endeavors.
“It requires a great deal of community will,” he says, “and it’s a difficult political argument to make, especially when, in the current economic climate, you’re cutting back on city services and then suggesting spending millions on a fiber network. A well-developed business plan can show how that network can be a powerful economic development tool and provide an excellent return on investment.”
Minneapolis sticks with Wi-Fi
“Speed, while a valuable commodity, is just one factor to be considered in the development of a technologically advanced city,” says Otto Doll, Minneapolis’ CIO. He contends that the USI Wireless network in Minneapolis offers, if not lightning-fast speed, then at least a significant amount of coverage. “It’s not the fastest thing going,” Doll admits, “but it can not only get to someone’s residence or business, but give them connectivity across the entire city, and that’s important to us.”
For Doll, it’s all about what he calls “the value proposition,” and Minneapolis is currently placing a premium on widespread and outdoor availability that is reachable by city workers and services, including some police, inspectors, regulatory services, garbage and sander trucks, safety cameras, and city message and parking signage.
“We want to be anywhere a connection is needed, not just fixed locations, so we have 117 free Wi-Fi hot spots across the city, and a lot of people are taking advantage of that,” he says.
He also suggests that a gig of broadband might be overkill, given the current technological situation in Minneapolis.
“We just completed a survey on digital inclusion, and 18% of our households have no Internet connection at all. In some neighborhoods, as many as 10% of those residents who have a connection are using dial-up, which costs from $6.95 to $9.95 a month.” The survey uncovered a large issue of digital literacy that is of more immediate concern to Doll, who says, “Half of responding households said they are not comfortable trying to find a job online. For them, fiber to the home would be overkill, and in the current economic climate, when I am being asked each year to cut back on my budget, it just doesn’t make sense right now.”
St. Paul’s focus: digital literacy
In St. Paul, there is also a greater concern over digital literacy than with the need for high-speed access, at least for the present time. “The City of St. Paul and Mayor Coleman support access to high-speed connections, but, like Minneapolis, we are very much aware of the digital divide that exists, so right now we’re focusing our efforts on making sure that all St. Paul kids have access to the Internet this summer,” says Joe Campbell, communications director, City of St. Paul.
The city is promoting computer use at local libraries, all of which carry high-speed connections. “So many of our kids live in houses without computers or Internet access, and we are concerned they could lose valuable educational gains because of that. We have a major city initiative to keep kids active and learning in the summer, and the computers in our libraries are helping them make strides in that direction.”
As to what the technological future holds for the capital city, Campbell says, “The mayor and others in St. Paul are well aware that there is a digital divide, and we are beginning to find ways to address that. In the next couple of years, we will be making some investments in technology, but what exactly those investments will be, we aren’t quite sure. But we know that they’re needed, certainly.”
Bright future for bright cable
While some activists decry the current state of the Twin Cities’ broadband landscape, there are some more hopeful voices in the conversation, too. John Slade, a longtime media activist who is currently a community organizer for Habitat for Humanity, says he feels there is a “bright future for bright cable,” which is what fiber optic cables are called when they are turned on and receiving data. Slade, the great-great-grandson of James J. Hill, likens his grandfather’s vision for creating a high-quality transportation infrastructure as being very similar to his activism in the broadband debate.
He is an advocate for the development of municipal networks that could be used by public and private providers, and he uses the analogy of a city building a road and allowing the publicly owned U.S. Postal Service and the privately owned UPS to make deliveries over that road.
While he acknowledges that legislatures have often balked at the size of initial investments for broadband infrastructure, he contends that it’s more a matter of priorities, saying, “For the cost of building the new Vikings stadium, we could have gotten a bright fiber optic cable to every home and business in Minneapolis and St. Paul.”
Eagan’s need for speed
If, as Slade contends, there are a few bright spots in the bright fiber picture, one of them is certainly to the south, in the suburb of Eagan. Home to companies including Thomson Reuters, Blue Cross Blue Shield, Delta Airlines, and Unisys, the city has made a significant commitment to broadband technology.
Tom Garrison, Eagan’s Communications Director, says, “We are very focused on the need for speed.” He says that last November, Five 9s Digital, a North Carolina company, announced its intent to develop a “carrier hotel” data center in Eagan. (The Line covered the announcement here.) It would be only the second major carrier hotel in Minnesota, and it’s important because it will have a new redundant route out to the Internet that’s not subject to a single point of failure. So far, Garrison reports that expressed interest in the data hub tops more than 300,000 square feet, but he notes that the site will not be able to accommodate all that demand.
“We are just now completing 17 miles of open-access fiber in the city, available to any provider, with the goal that multiple providers can provide competitive services to the business community,” Garrison says. The fiber is funded by non-tax dollars, including water tower antennae lease revenues from wireless providers.
An open-access fiber model like Eagan’s is relatively rare in Minnesota, but some experts say it makes more sense than the municipal ownership model cited in Mitchell’s study, given the nature of regulations that exist in the state. The current climate is daunting, Garrison admits, and notes that the U.S. pays more per megabit of speed than most industrialized countries. Still, businesses and the city have strong reasons to keep expanding broadband options in the area. “We don’t have the option of standing pat on technology if we want to continue to compete in a global economy,” Garrison says.
‘Lay a lot of fiber’
Asked what he’d do if he were suddenly given the power to mandate action in the broadband sector, Mitchell chuckles. “Since I’m from the Institute for Local Self-Reliance, I suppose I wouldn’t make any arbitrary decisions, but I’d start up some conversations with citizens and businesses. And I’d want to do something around antitrust about the cable companies, which have agreed to carve up the market and block additional competition.”
After that? “I’d start laying a lot of fiber, right away,” Mitchell says.
This article is reprinted in partnership with The Line, an online chronicle of Twin Cities creativity in entrepreneurship, culture, retail, placemaking, the arts, and other elements of the new creative economy.