Are We Ready for the 21st Century?

 

The Stark County Broadband Task Team is a group of the willing;  a team of interested volunteers that represent small and large employeers, non-profits and governments.  Since 2014 we have been studying what possiblities higher-speed broadband might bring to our community.

Why broadband? Why now? A common thread among our team members and the interests we represent is the dissatisfaction with the status-quo. Greater Stark County is falling behind its peers in Ohio and elsewhere in the United States in terms of educational attainment, household income, retention of high-school graduates and overall prosperity.

History would suggest that by looking at previous adoption cycles like the electrication of the United States, those communities that make prudent investments in emerging utilities can reap large benefits.

Unarguably the Internet has become an essential component of everyday life / work and is no longer considered a luxury. Due to history, regulations and industry behavior, the United States is woefully behind other industrial nations in terms of broadband speeds, capacity and  access. Providing a competitive broadband marketplace with the minimum of 1 gigabit per second to our residential neighbors and businesses will provide our community with an invaluable asset that is an essential feedstock for 21st century innovation.

Some Things We Believe In

Unless we change the aspirations of our communities to not just compete but to win, we will lose our most gifted

The rise of the app economy and the massive leveraging of cloud computing has put a greater emphasis on persistent, ubiquitous high-speed networks

The Internet will eventually consume all other forms of communication.   The four dimensions of service will be availability, price, reliability and speed.

Artificial intelligence and robotics will supplement human labor and increase the rate of structural change in the world economy

Employment growth will be in work that is done at a distance

Communities without Internet choice will not prosper

Broadband is the fourth utility;  We think of it as an opportunity for our community to go forth and prosper, hence the forth utility

 

2000 to 2013 - A Clarion Signal for Change

 

Using data from the US Census Bureau for the period of 2000 to 2013, Stark County area has three apparent trends that go beyond troublesome.  These are trends that must be addressed or the quality of life in this community will be futher impacted to point of marginization and community institutions as we know them will be diminished in capacity, reach and aspiration.

 
 
 

In the period between 2000 and 2013, the percentage of the popuation of Stark County residents rose from 15.1% to 16.6% a rise of nearly 10%.  In comparison, Summit County to our north has only 14% of their population over the age of 65.

This is not to indicate that our seniors are bad, but rather we have be unable to to retain the approximate 2000 high school seniors that graduate each year.

9.9% Rise in Population over Age 65

Percentage of Stark County at or older than 65
 
 

65% Rise in Poverty Population

Population at or below Federal Poverty Level
 

Poverty levels during the same time period rose dramatically.   Between 2000 and 2013, the percentage of those living in Stark County rose by 63% to a new high of 15% of our population.

This trend has put unprecedented strains on our assistance networks.  Social agencies, institutions and faith-centered groups are all doing more with less.  Stark County has been unable to attract additional population to offset this breathtaking rise of need.

 
 
 

Last, our population growth in this time period was negative.   While a drop from 378,000 to 374,000 might seem flat for this period, the United States grew by 13% in the same time period.  In comparison to the average growth in the United States, we lost ground by 14%.

1% Decline in Population of Stark County 2000-2013

Stark County Population
 

What Constitutes a Utility?

 

Recognizing the economic need for a secure, clean and reliable source of drinking water, the Romans built their first aqueduct to Rome in the third century BC. Over the course of the next 700 years, Rome grew to be the largest city in the known world, with unprecedented wealth, attainment and prosperity.

Since that time Rome has served as a lesson in the power of infrastructure as an economic driver. Water and sewage processing, electrical power delivery and telecommunications are all recognized as essential utilities that give us the platform to participate in an industrialized society to our full potential.

Utilities also deliver service to a physical location. Enormous value can be created by changing the utility of a piece of land to that of something that has a higher and better use. During the last quarter century, the Stark County Metropolitan Sewer System expanded to over 700 miles increasing property values as fallow land was developed and sold as improved. Broadband has the same opportunity to add value to existing assets at a marginal cost. Instead of sewer coming to farmland, perhaps the greatest increase in value might lie in high-speed broadband coming to existing, under utilized buildings and neighborhoods.

Utilities themselves have the characteristics of operating at scale, with high redundancy and service components that allow the delivery of proscribed product at a distance. At this time inexpensive, reliable, gigabit fiber broadband is in scarce supply. A utility infrastructure would be able to provide broadband to underserved areas and to create a competitive marketplace by aggregating existing demand.

In 2015 the FCC moved to change the classification of Internet Service Providers (ISP's) to that of a Title II Utility under the oversight of the FCC.   This re-classification is currently wending its way through various court challenges, but in June 2016, the United States Court of Appeals for the District of Columbia ruled in favor the FCC.   Stating the following in the majority opinion, "Over the past two decades, this content has transformed nearly every aspect of our lives, from profound actions like choosing a leader, building a career, and falling in love to more quotidian ones like hailing a cab and watching a movie," the judges said.   Paraphrasing futher, the judges maintained that when something like the Internet stops being a luxury, then it becomes a utility.

Broadband in Ohio

Average Download Speeds

Pennsylvania29.3Mbps
Michigan28.4Mbps
West Virginia25.4Mbps
Indiana24.2Mbps
Ohio18.4Mbps
Kentucky15.9Mbps

As of last year, the FCC's new standard of broadband is 25 megabits per second download, and 3 megabits per second upload. Sadly, the average speed of Internet service in Ohio does not yet meet the Federal standard of broadband. In fact, Ohio ranks fifth out of the six states that touch its borders.

Of the top 100 communities in Ohio, Canton and Alliance rank 64th and 65th in terms of download speeds according the the last available report from Connect Ohio.

The Calling Card of Better Communities

According to a Wall Street Journal article from June 30, 2015, Colorado State University has estimated that the availability of high-speed broadband can increase the price of homes by over 3%.   This is equivalent of added a bathroom or fireplace to a $175,000 home.

Much of this sought-after value is the result of the growth of home-based businesses. According to Mary Meeker, the noted Internet analyst with KPCB, over 34% of the American workforce are now freelancers who identifiy the Internet was where they seek, receive and submit their work, most often from home. The largest percentage of the on-demand workforce are the Millienals (age group of 21 to 33), who represent 44%, followed the Gen-X's at 32% (age group of 34 to 49).

American Workforce

Traditional vs Freelance

Reason for Lack of Broadband Connection

According to a recent Pew Research study regarding home broadband, fully two-thirds (69%) of Americans consider not having a home high-speed internet connection would be a major disadvantage to finding a job, getting health information or accessing other key information – up from 56% who said this in 2010.

One third of those who do not have a broadband connection cited cost as their primary reason.  This has become more acute as smartphone ownership has gone up and many households can ill-afford two data plans, even though in practice, over 80% of the data viewed on a smartphone comes from a Wi-Fi Connection.

 

Protecting Local Economic Interests

First Street Light, 105th and Euclid, 1914

First Street Light, 105th and Euclid, 1914

The first traffic light in existance was installed at the intersection of 105th and Euclid Aveue in Cleveland Ohio in 1914, the same year that Cleveland Muni Light was opened.   Muni Light was created as a competive countermeasure to the monopoloy of the Cleveland Electric Illuminating Company (CEI).

In 1914, Muni Light had such excess capacity that street lights and the then novel traffic signals were installed to help use the excess capacity.  Muni Light's rates were so dramically cheaper than CEI's that it allowed Cleveland to surge ahead as an industrial powerhouse and lead to the rapid industrialization of the area between East 17th and East 120th.  In fact street car fares stayed at 3 cents per ride until 1957. 

Sugercreek Filtration and Pumping Plant for Canton City Water Department

Sugercreek Filtration and Pumping Plant for Canton City Water Department

Also in 1957, the city of Canton embarked on another example of  protecting regional interests. In that year, the City of Canton borrowed $7.6 Million to purchase land and build a water distribution system, piping water from Sugercreek Ohio to Canton over 20 miles away. This would more than double the capacity of Canton's water supply and insure that the rapid growth of the local steel industry would not be diminished.   This bold move would cost over $63 Million in today's dollars.   The Canton Water Department has since then gone on to service customers not only in Canton, but in the surrounding townships providing tens of thousands with clean, abundant, reasonably priced water.

Several Ohio communities have moved ahead with their own broadband plans. Hudson, Ohio is rapidly installing their own fiber-optic 1 gigabit network.   Started just last year, Hudson is now expecting to complete their network in 2-1/2 years versus the projected 5 years due to strong demand.   Currently Hudson is experiencing an 80% conversion rate wherever they provide new service.

Fairlawn Ohio has also started their network the spring of 2016 and you can check on its progress here.   Fairlawn's municipal broadband system, FairlawnGig, will be a fiber and public wifi open network able to carry other service providers.   It was made possible by a $10 million bond issue by the Summit County Development Authority.

A Tool for the Everyone

The appeal of broadband as an economic driver is hard to dismiss.  We can think of very few (if any) regional initiatives that could have such a far-reaching effect for residents, businesses, governments and non-profits.

While not every resident would need or appreciate gigabit speeds, they would appreciate less predatory pricing and obfuscated marketing bundles and a more competitive marketplace.  Also, more of their dollars could be spent on the delivery of services, rather than on tax abatement or unreasonably costly Internet service borne by their local government, hospitals and small businesses.

Stark County area businesses that are currently paying 24 times the going rate for gigabit services found in more competitive markets, could be more profitable and more inclined to add state-of-the-art digital services, expanding their reach and scope.

Last, and perhaps the most fundamental of advantages, is one of communicating aspirations.   Rarely does a community have the ability to speak out to its citizens, young and old, and tell them in no uncertain terms that we want you to stay, we want you to prosper, we will give you the tools to discover new worlds.

 

Internet Service as a Title II Utility

During 2015 the FCC reclassified Internet service as a Title II utility.   This was done to give the FCC the proper authority to regulate Internet service in the United States and oversee Net Neutrality rules that would protect consumers and content providers from various carrier practices.

As both wireless data and Internet service migrated from the unregulated to the regulated, the FCC did not impose heavy regulation on these new utility-class services.  Rather the FCC characterizes the regulations on these services as light, but important new rules apply.

Of all of the new rules, the most important for aspiring broadband suppliers is that pole rights and other public right-of-ways are now non-exclusive.   Heretofore Internet service providers (ISP) would have to negotiate with right-of-way owners and could be excluded out-of-hand.

In the FCC's view, Internet services like wireless data and broadband will eventually subsume cable TV and landline phone service, and these new classifications and regulations are levers to move this along faster.  Since right-of-ways are now open to any new entrant ISP, this is a sea change opportunity.

Publicly owned Internet providers were traditional municipalities who could co-op right-of-ways to their own use by using local ordinances. This was an effective way for cities to affordably build their own ISP by overlaying on top of existing utility infrastructure.   Now with the new FCC classifications, new entrant ISP's have the right-of-way infrastructure available to them via traditional utility rental tariffs.   This means that the areas that lie outside of cities, suburbia if you will, is now open to the land rush of broadband choice.

Stark County - Supply Meets Demand

Stark County lies conveniently between the metropolitan areas of Chicago and New York.  As such Northeastern Ohio is rich in fiber assets that are high-capacity, high-speed and wholesale in nature. The economic opportunity of any entity offering gigabit broadband to our area is to aggregate enough demand to be able take advantage of the wholesale market.   Ideally, this entity aka broad utility would be able to choose between multiple suppliers at any time and create a marketplace of suppliers to service that demand.

Facilities that house these types of switches are called carrier hotels and beyond just offering greater choice, they can deliver unique and regional value.

A carrier hotel location could also offer local co-hosting of equipment that is owned by larger customers.   This would be important to large customer, if such a large customer might experience large swings in bandwidth required, due to seasonal demand in their business cycle, the introduction of new products and services, and the desire to have a scalable on-line presence.

Where to Start?

Much of Stark County's population and commercial activity takes place along the North - South Whipple corridor. Just 11 miles as the crow flies from Faircrest Street SW to the Akron-Canton Airport, this corridor has the ability to aggregate the demand from many of our largest employers, shopping centers, tourist attractions, office parks, cities and subdivisions.   A loop architecture could be employed to not only address redundancy issues, but to encompass more territory.

One of the findings the Task Team has found in previous broadband initiative failures were overly ambitious build-out plans based upon flawed assumptions and a lack of subscribers per mile. By addressing this dense corridor first, a network could capture the densest subscribers per mile in the county, before addressing additional phases to provide service to other regions.

Using a deliberate, phased approach will help mitigate risk of large capital costs vs subscriber take-up rates as well as the possiblity of disruptive technology change.

 

Advocation

The Stark County Broadband Task Team has been advocating our stance on broadband to a number of public forums over the last two years, as well as meeting with our elected officials, developers, foundations, businesses and other important stakeholders.

We are extremely grateful to the feedback, time and consideration these groups have given us and helped us shape our message.  If you would like to us to deliver this message to your group or meet up with us in person, please use our Contact Us link.

Government Resolutions

Stark County Resolution

In December 2015, the Stark County Commissioners voted unanimously to adopt a resolution supporting the exploration of a regional effort encouraging appropriate stakeholders to collaborate on widely available and affordable high-speed connectivity and to explore an asset holding legal entity that can work in concert with private and public stakeholders.

Jackson Township Resolution

On April 26th, 2016, the trustees of Jackson Township unanimously voted to adopt a similar resolution to that of Stark County, after a brief presentation

City of Canton Resolution

On May 23rd, 2016, the city council of Canton, Ohio unanimously voted to adopt a similar resolution to that of Stark County, after a brief presentation. 

Plain Township Resolution

On June 14th, 2016, the trustees of Plain Township unanimously voted to adopt a similar resolution to that of Stark County, after a brief presentation. 

CITY OF Alliance

On September 19th, 2016 the city council of Alliance, Ohio entertained a representative of the Stark County Broadband Task Team and unanimously passed a resolution of support of their endeavors.

City of North Canton

On June 27th, 2016 the city council of North Canton, Ohio entertained a representative of the Stark County Broadband Task Team and listened to a brief presentation.   On October 10th, the council passed a resolution endorsing the work of the team.

 
 

Feasibility Study

Please see our Study section regarding the feasibility study that was conducted by Magellan Advisors on behalf the Broadband Task Team.   You can see the overview and results here:  Feasibility Study