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.