Community Case Studies: Sebewaing, Michigan, and Sandy, Oregon
Cities in need of faster, better broadband look at other cities such as Chattanooga, Tennessee, and Lafayette, Louisiana, because they own gigabit fiber networks. The wishful cities wonder Can we do that too, and how soon? How do we become the next successful Gigabit City?
Well, there’s good news and there’s bad news. The bad news is that there isn’t a 10-point guide every city can follow to guarantee success. The good news is that over 140 citywide public networks offer a mountain of anecdotal and quantitative data to help communities planning to take the broadband plunge. Sebewaing, Michigan, and Sandy, Oregon, are 2 of those cities, and are the latest to join the hit parade of publicly-owned networks rolling out gigabit service.
Success typically means different things to different communities and is not always measured by profit margins. Instead, generating revenue sufficient to cover on-going operating costs and retiring debt incurred to build the original network is considered financial success.
There are 2 additional broad measures of success for many communities:
1. Does the network infrastructure work as advertised?
2. Does the network achieve the community’s non-financial goals?
Most communities that build broadband networks are doing so because their Internet access is inadequate for their needs. Sebewaing and Sandy have operated wireless networks for nearly 14 years, but are now deploying advanced fiber networks to homes and businesses. Their respective transitions to offering fiber gigabit services offer helpful lessons for others that are just starting down the broadband path.
Sebewaing, Michigan’s Fiber Build
Michigan is one of 21 states that have laws putting restrictions on municipal- or public-utility-owned networks. The law was passed after 2001, so it didn’t affect the fiber ring and Wi-Fi network Sebewaing originally built, but the statute did apply to their new wired network. Ironically, some believe the restrictions actually led to designing a better network.
Sebewaing Light and Water (SLW), the village’s public utility, had to get the city council’s approval to make a request for private service providers to build the network. Next, they had to issue an RFP for the type of network they wanted to serve their 1,800 residents, and wait 61 days to see if a minimum of 3 providers would respond. Because none did, SLW could build its own network, but only after preparing and presenting a cost-benefit analysis to the council that predicted costs, the number of subscribers, etc. The analysis had to be publicly available for 30 days before a public hearing to authorize construction, and then reviewed by a CPA.
"Developing an RFP that was subject to so much public scrutiny forced us to be thorough in designing the network, and also enabled us to get plenty of constituent feedback to fine-tune our design," states Melanie McCoy, SLW Superintendent. Not all communities are required to advance a plan in a public fish bowl, however, transparency does ensure greater input from those who will use the network and can lead to better network designs. Sebewaing ended up with Spectrum Engineering, a well-regarded consulting engineering firm, based in Aurora, Indiana. The firm has completed numerous fiber designs for municipalities and utilities.
"We issued the RFP in April of 2013, and immediately began developing the cost-benefit analysis after the 61 days so we could publish it in August and hold the hearing in September. Spectrum Engineering started the walkout design the day after the public hearing. We issued the OSP bid in October and finalized the contract with Earthcom by December so we’d be ready to begin construction by March of 2014," said McCoy. Eight months later, SLW began offering broadband service over the GPON fiber access network.
The build-out phase was straightforward and efficient. McCoy and her staff had overall project management responsibility while Pulse Broadband, based in St. Louis, Missouri, oversaw the day-to-day construction tasks and monitoring contractors. Earthcom, the outside plant contractor, built a combination aerial and underground plant. SLW saved over $115,000 in "make ready" by having their crews do the work prior to Earthcom coming on site.
Since SLW planned to build new infrastructure for electric services underground, they buried 30% of their fiber in conjunction with the new underground electric plant. The remaining 70% was deployed on SLW owned utility poles. Calix was selected as the GPON electronics vendors through a separate RFP issued by Sebewaing, with the assistance of Pulse Broadband. Air Advantage, a local service provider, installed the fiber drops and the ONT equipment on the premises.
Selecting the various contractors and vendors was relatively easy because, "The ones who really want the project will jump out at you," McCoy states. "It’s obvious they were not going to shortchange us because the project was small. Air Advantage has a local presence, which gave them an extra incentive to make this project successful."
SLW currently has 180 subscribers, and 200 on the waiting list. If it reaches its goal of 500 subscribers on schedule, SLW can retire its debt 8 years from now. SLW expects to move 18 businesses previously on the old network to the gigabit network, and possibly attract a few new businesses to town seeking world class broadband.
Sandy, Oregon’s Fiber Build
Similar to the Sandy River that gives the community great water, the city’s network has wandered from wired to wireless and back to wired again. In 2001, the city couldn’t persuade any private providers to deliver DSL services to city hall, so the city council passed an ordinance establishing SandyNet as a broadband communications provider. Besides city facilities, the resulting network provided DSL to residences. The city manager was responsible for network operations, but he had no staff to work with, just a couple of consultants.
A willingness to make the investments necessary to adopt new technology, as constituents’ needs evolve, is critical to succeed. The city had about 160 network customers by 2007 when it decided to start selling wireless services. Over the next 6 years, they built subscriptions up to 1,600 as they phased out DSL and migrated customers to Wi-Fi. The city deployed the Wi-Fi access points all over town, and required customers to have a fixed receiver/transmitter on their homes.
When SandyNet reached 900 customers in 2010, their Wi-Fi access points began interfering with each other. In addition, streaming video was gaining in popularity and putting enormous strains on the wireless network. Sandy has over 10,000 residents. City officials wanted to be sure they were capable of delivering service everywhere in the city. Faced with the prospect of expensive wireless network upgrades every couple of years, the city developed a 4-year master plan to build a future-proof fiber-to-the-home network. This planning produced a detailed roadmap for the fiber build-out.
OFS, a manufacturer of fiber optics cable and passive equipment, also provides professional services and designed the gigabit network. Their design work was particularly valuable due to having staff with previous experience working on Verizon’s FiOS network.
"Even big cities can benefit from this kind of expertise," states Joe Knapp, IT Director for the City of Sandy. "They understand a lot of the little things you can do to save money because they’ve done this type of design work before." SandyNet gave OFS overall project management responsibility and all the contractors and vendors.
Mid-Atlantic Engineering Partners did the detailed engineering design work. Henkels & McCoy was hired for the outside plant construction work. Calix, which has helped numerous other cities cross the gigabit threshold, was selected as SandyNet’s GPON electronics partner.
SandyNet installed the new data center gear that was designed and built for the fiber network. SandyNet staff also installed the customer premises equipment (CPE). Doing the installation with in-house personnel allowed the city to keep their installation costs low.
Having planned the network for several years, the build-out was executed fairly quickly. The contract was signed in December of 2013, and work started in January 2014. The city secured bond financing in February 2014 and accelerated the design work in March. Construction kicked off in June, and SandyNet began lighting customers’ service in the fall of 2014.
To best coordinate the design, build-out, and customer installations, the project team divided the city into 4 areas, called them "routes", and then scheduled route build-out sequences, similar to how Google executes its Fiberhood build-outs. With SandyNet staff coordinating customer installations, the utility requested weekly reports from contractors indicating what drops were done and active.
"When the customer has a problem, we own everything and never will say ‘It’s the contractor’s fault,’" reports Knapp. "The most likely issue we’ll face is something underground getting hit and we’ll get the contractor to fix the problem ASAP. We also take care of reimbursements and insurance issues for the customer if necessary. In hindsight, maybe we should have scoped out more thoroughly probable problems and spelled out parameters of who pays for what if there is a problem. But so far, we’ve had a minimal amount of service and repair issues."
It helps significantly that OFS and Sandy’s Public Works Department each has an inspector who oversees work done by contractors. This minimizes disputes, over- or underpayments and build-out cost overruns.
Sometimes Determining Success Is Easy
For both Sebewaing and Sandy, determining success is pretty easy. These communities built initial networks in 2001 when neither town had Internet access beyond dial-up. Most constituents only had 2 goals: to have some type of access, even if it was only at 1 or 2 Mbps; and that the service would be reliable.
"We’re kind of boring," says SLW’s McCoy. "Our citizens mainly care that they have something that meets their needs. We’re not looking to grow our population or attract a large company. Everyone is very happy they’ll have the option to get a Gig if and when they want it, but they’ve always felt the network has been a success."
Sandy’s network had similar goals with its original network. In 2001, there was nothing, so people were quite happy that they had a well-functioning network. As time went along, citizen’s primary goals and expectations continued to be that the network performed as promised. Now, local businesses’ need for faster speeds and more capacity have become a key driver for enhancing the network, as have residents’ desire for faster speeds to keep pace with their online video needs. Given all of the excitement of the gigabit movement, Sandy’s desire to become a center of innovation is motivating them to evolve SandyNet to the next technology level beyond the gigabit.
When the FCC first announced their goal of a gigabit community in every state by the end of 2015, it seemed like such an aggressive goal, Sebewaing and Sandy are great examples of communities that have embraced the promise of gigabit broadband. They took a very pragmatic, nuts-and-bolts approach to building the kind of networks their citizens desired: networks that would last into the next century.
With more than 35 states already touting gigabit communities, and 15 to go toward the FCC 50-states goal, 2015 promises to be a year where many more Sebewaings and Sandys join the gigabit community ranks.