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Where our water comes from, Part II
By Marshall Swearingen

An abridged American history of things the free market did not do
An op-ed response to the current preference for humanizing the free market and giving it undue credit.

Bozeman Broadband: Economic ignition or Rom-Com reruns?

On Thursday morning at City Hall, Bozeman’s Director of Economic Development, Brit Fontenot, filled a room with guests for an informational gathering titled, “Bozeman/Gallatin Valley Broadband.” Leading the presentation was Dr. Andrew Cohill, a consultant for community-scale broadband and owner of Design Nine, based in Virginia.

To a group of about 50, Dr. Cohill’s presentation covered first his experience, particularly strong in rural areas like Montana, as well as a few illustrative examples of successful, community-based broadband initiatives, often called “municipal broadband.” Much of his speech offered a general outlook for Design Nine’s forthcoming study on broadband’s potential here in the Gallatin Valley.

Including one of Dr. Cohill’s co-presenters, Kate McMahon, from the Whitefish-based Applied Communications, there were only five women in the room, noteworthy only because the divide was so pronounced as to fall beyond the fence of coincidence. McMahon and P.E. Paul DeWolfe are both from Montana, and they conveyed the necessary down-home credentials that so often smooth local territoriality issues.

Let me back up a bit and first define what broadband is and what municipalities have to do with it. In the same family as the cable that connects to a TV, broadband is an electronic transmission medium that facilitates a wide-range of communication signals and traffic simultaneously. For macro-scale applications, broadband has been, is currently, and is likely to remain as best served by a fiber optic cable. Municipal broadband, then, refers to local governments either fully or partially providing the service, putting the fiber optic cable and infrastructure in place, and sometimes taking the role of selling it back to the market.

Dr. Cohill’s presentation highlighted several positive illustrations from around the country. First and foremost, he noted Chattanooga, Tenn. In that city of approximately 170,000 clambering along in an economic rut, they began in 2007 a community-wide broadband installation that coincided with updating to a more secure electric utility system (which the City of Chattanooga owns, too). With help from a huge $111M federal grant, the southeastern college town proceeded to produce a gigabyte of bandwidth for users, resulting in the nation's fastest Internet with uploads 200x better than the average, for government, commercial, and private parties, alike. The total cost was reportedly in the range of $300M, but local officials say the community is already well into the black and set a bar height recognized internationally that helped turn the town’s economics around.

However, less available in presentations like that of Dr. Cohill, a few other communities—Provo, Utah, to name the most documented—have fared poorly in their municipal broadband initiatives. Owing in part to Utah’s regulatory obstacles, municipal mismanagement, and rapidly devalued infrastructure, the City of Provo’s effort at municipal broadband ended in a $30M investment being sold in 2013 to Google for $1. (Ouch.)

Before anyone tells you otherwise, there is significant fiscal risk in municipal broadband, and there is also free market competition. Perhaps no community in the country better exemplifies the risk than not-so-far-off Provo, where taxpayers are still servicing the community’s broadband debt while ratepayers must pony up to Google for the fiber optic service.

With that in mind and the fresh memory of how cavalier the Bozeman’s higher-ups were as they strolled away from a $4.5M loss at Mandeville Farm, broadband remains worth a second look—and a long one at that. Provo may not have pulled it off, but Chattanooga, Danville, Virginia, as well as medium-sized cities in Michigan and Alabama have not been shy about their broadband success, and even the spanking new service in Butte has already enticed a new business or two.

Of further note, Google’s fiber service is, pardon the redundancy, in fiber, which should give some comfort that we’re not barking up a telecommunications tree that could topple. (I’m surely not alone in remembering America’s telecom crater of 2001.) Note, as well, that Google’s free market spread hasn’t covered much of the map. Of late, they’re hoping to offer fiber-optic broadband service to some 30 American communities, so waiting for them might well be futile. Nor is their service inexpensive to customers, Google Fiber averages some $300/year for private customers. By comparison, some of the municipalities that already offer broadband are doing so at no charge, in hopes of servicing their debt through increased revenues.

Of the local service, the Silicon Valley goliath doesn’t appear to be in any hurry. Bozeman can boast of comparatively affordable Internet service, but upload times have lingered at or below national averages, as this week’s article in The Great Falls Tribune documents. Montana’s average upload speed is 7 Mbps compared with Chattanooga, where they’re proclaiming 1 Gbps (almost 150X faster).

Before giving the City of Bozeman any go-ahead, taxpayers should be advised as to what all that bandwidth is being used for. Advocates like to point toward increased organizational efficiencies and job creation—though they do skip over the inherent job dissolution from all those technological advances—but in the end, 32% of national bandwidth last year was used for, yep, NetFlix. Together with runner-up YouTube, they hogged almost half of the nation’s available bandwidth. So the next time someone says, “All that broadband isn’t just for gamers,” you can tell them they’re right; most of it is actually being used to watch last season’s Game of Thrones or some Rom-Com for the 4th time.

Still—yes, still—broadband deserves recognition as a serious suitor for civic engagement. Greg Gianforte put it in years ago to exclusively serve the Bozeman offices for RightNow Technologies (now Oracle). Montana State University would certainly find hallways of meaningful applications beyond re-runs for homesick freshman, and burying it along North Seventh might be just the kind of spark that dry fuse has been waiting for. Chattanooga’s claim to $400M in new business is hard to forget, and it’s not like Bresnan/Opticom/Charter has been a pillar of stability and good service of late. If we want this valley to have broadband—and we want it to be affordable—the soonest way to see that done is via the local government.


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