What does Mount Vernon have that most of the rest of Washington does not?
It has Internet speeds of 1 gigabite up and down for only $70 per month. Mount Vernon has set up a city utility company which delivers fiber optic speeds to businesses and homes.
One Gig fiber optic connection is an enormous stimulus to high-tech business. Companies all over the country are relocating to those few cities which make fiber optic speeds available.
Current private monopoly internet providers will no doubt put up stiff opposition, as they have done in other areas. The Washington Post says:
Kansas isn’t the only place where cable companies have thrown up barriers to publicly funded fiber optic networks. Colorado, for instance, has a law on the books that requires cities to pass a referendum if they want to start building a municipal network. The cable industry has campaigned against such ballot measures there in the past. In Seattle, cable companies lobbied to defeat mayor Mike McGinn, who was an advocate for public fiber.
However, the county holds the trump card. It can establish a public utility. The job of setting up a county fiber optic internet might best be assigned to the Snohomish County PUD.
Comcast, Frontier, and other internet providers would still be part of the picture. As is the case in Mount Vernon, the new internet system would be a common carrier, meaning that current providers will still be welcome to provide service. The difference is that they would have to compete with other providers.
Another approach would be to wait until monopoly contracts expire and when renegotiating them require capital investment in fiber.
Fiber optic internet is not just a convenience, not just a better way to surf the web and watch HD video. It is not just a tool that will make gamers overjoyed. Fiber optic speeds offer big advantages to many high tech companies. With a gig of speed, companies sharing large files are relocating to Mount Vernon, Chattanooga, Wilson NC, and Lafayette LA. In Mount Vernon a company can buy one gig down and up for $70 per month. High speeds enhance voice-over-internet-protocol (VoIP), video-on-demand (VOD), interactive video, medical imaging, Application Service Provider (ASP) services, cloud computing, and server farm growth.
A fiber connection prompted Eric Blank to move his 20-employee information security firm, Blank Law and Technology, from Seattle 61 miles north to Mount Vernon, Wash., which built its own fiber network. He pays $250 a month for the connection, versus the $985 a month he paid in Seattle for vastly slower service.
“We investigate computer malfeasance and have to sift through terabytes of data for a single case,” Mr. Blank said. “The fiber connection is the only reason we are in Mount Vernon and the customer service isn’t bad because all you have to do is walk down the street and knock on the door at City Hall.”
A fiber optic utility for Snohomish County would be a huge business magnet.
Compare what Snohomish County currently offers. Comcast, for example, offers starter business class cable internet for $70 per month, and it provides an internet connection which stalls when the neighborhood kids get home and start downloading music. You you can buy the following speeds from Comcast:
18 megabytes down and 3 megabytes up for $70 per month
50 megabytes down and 10 megabytes up for $110 per month.
75 megabytes up and 15 megabytes down for $150, per month.
100 megabytes down and 20 megs up for $200 per month.
Compare Mount Vernon and the other cities mentioned. They can deliver 1 gigabyte down and 1 gigabite up for $70 per month!!!!!! (I rarely use exclamation marks.)
If South Korea can provide all-you-can-eat fiber optic internet for $25 per month, we can do something similar here.
And if we have fiber optic, I would assume that the wars over internet neutrality will become moot.
The federal government is giving out large grants to pay up-front costs. But Seattle has decided for now that its way of implementing a fiber optic network would be too expensive. Mayor Murray took large campaign contributions from friends of Century Link and Comcast. Mike McGuinn, supporter of Seattle fiber optice, was defeated in part with Century Link and Comcast money.
The PUD would have to work within the limitations of RCW 54.16.330 and provide wholesale service only. Actually, this is a good option. The PUD would provide the fiber carrier that Comcast, Verizon, and dozens of other retail providers would ride on. The retail providers and the PUD could work out a deal that the retail providers would put up part or all of the capital to build out the fiber optic system. A public fiber backbone could serve to the benefit of retail providers. Without it, it would be years before they could provide the fast service that users want and need. This is a perfect example of public and private entitles working together.
Telecommunications facilities — Purposes — Limitations — Provision of wholesale telecommunications services — Eminent domain.
(1) A public utility district in existence on June 8, 2000, may construct, purchase, acquire, develop, finance, lease, license, handle, provide, add to, contract for, interconnect, alter, improve, repair, operate, and maintain any telecommunications facilities within or without the district’s limits for the following purposes:
(a) For the district’s internal telecommunications needs; and
(b) For the provision of wholesale telecommunications services within the district and by contract with another public utility district.
Nothing in this subsection shall be construed to authorize public utility districts to provide telecommunications services to end users.
(2) A public utility district providing wholesale telecommunications services shall ensure that rates, terms, and conditions for such services are not unduly or unreasonably discriminatory or preferential. Rates, terms, and conditions are discriminatory or preferential when a public utility district offering rates, terms, and conditions to an entity for wholesale telecommunications services does not offer substantially similar rates, terms, and conditions to all other entities seeking substantially similar services.
(3) A public utility district providing wholesale telecommunications services shall not be required to but may establish a separate utility system or function for such purpose. In either case, a public utility district providing wholesale telecommunications services shall separately account for any revenues and expenditures for those services according to standards established by the state auditor pursuant to its authority in chapter 43.09 RCW and consistent with the provisions of this title. Any revenues received from the provision of wholesale telecommunications services must be dedicated to costs incurred to build and maintain any telecommunications facilities constructed, installed, or acquired to provide such services, including payments on debt issued to finance such services, until such time as any bonds or other financing instruments executed after June 8, 2000, and used to finance such telecommunications facilities are discharged or retired.
(4) When a public utility district provides wholesale telecommunications services, all telecommunications services rendered to the district for the district’s internal telecommunications needs shall be allocated or charged at its true and full value. A public utility district may not charge its nontelecommunications operations rates that are preferential or discriminatory compared to those it charges entities purchasing wholesale telecommunications services.
(5) A public utility district shall not exercise powers of eminent domain to acquire telecommunications facilities or contractual rights held by any other person or entity to telecommunications facilities.
(6) Except as otherwise specifically provided, a public utility district may exercise any of the powers granted to it under this title and other applicable laws in carrying out the powers authorized under this section. Nothing in chapter 81, Laws of 2000 limits any existing authority of a public utility district under this title.
I have expenses to cover, and so I will continue to work through my campaign.
James Robert Deal, Attorney Broker
Madison Partners Real Estate
James at James Deal dot com