1. The document discusses how investing in fiber infrastructure could transform Minnesota by improving access to high-speed internet, which is essential for economic growth, education, healthcare and reducing inequality. 2. It recommends that Minnesota set a goal of funding $100-200 million to build out fiber networks, prioritizing installing "dark fiber" that any internet provider can use. 3. Cooperating through public-private partnerships and helping form new cooperatives could extend affordable fiber access to rural areas not served by private providers.

1. Large as Life: How Fiber Will Turn
the World Upside Down
Susan Crawford
Nov. 19, 2015

2. fiber

5. Immerse yourself in the sun, sand, and secret journals of five twenty-somethings living under one roof.

7. 11/18/2015 Welcome to the .coop registry
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10. What I learned
• Many heroes
• Getting anything done is really hard
• “But phones are two-way!”
• No path to a national upgrade to last-mile
fiber optic connections

16. Footprint Is Destiny
Wires in US households:
– AT&T 51 M
– Comcast 41 M
– New Charter 36.9 M
• [TWC, Charter, Brighthouse]
– New VZ 22.4 M
• New FiOS 11.6 M
• [No more CA, FL, TX]
– New Frontier 14.4 M
– Windstream 3.2 M

17. Four Different Wires
• FTTH – glass/lasers, potentially unlimited capacity, easily
symmetrical (up/down), future-proof, just upgrade electronics
• Hybrid fiber-coaxial – cable plant, some portion of pipe
allocated to Internet access, high capacity download, cramped
uploads absent expensive re-tooling
• FTTN – fiber to node, copper between neighborhood node
and home, capacity dependent on distance to central office
• [DSL: “The New Dialup”]

18. 0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
2005 2006 2007 2008 2009 2010 2011 2012 2013
Share of High Speed Data Net Adds
Cable Telco

19. -35%
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
Annual Percent Change in Wired High Speed Data Subscribers
Comcast
TWC
AT&T Total
Verizon Total
AT&T DSL
Verizon DSL

20. Five Simple Principles
1. Cable v. FiOS: FiOS usually wins (60-65% of the time)
2. Cable v. all other telco: Cable usually wins
3. Bigger cable co: Cable wins even more!
4. Smaller telco: Telco loses even more!
5. Major cable players never enter “rival” territories
Markets are divided
“bounded competition”

21. More on Divided Markets
• New Charter faces competition from FiOS in just 12% of its
territory
• Comcast faces competition from FiOS in just 14% of its
territory
• New Frontier faces New Charter: just 18%; faces Comcast: just
8%
• CenturyLink has just 9% overlap with Charter, 18% with
Comcast
• Windstream has just 3% overlap with NC, 1% with Comcast

22. Where Competitive Fiber Isn’t
1. MN incumbents Comcast, New Frontier,
CenturyLink, and Windstream don’t face
competition in their footprints
2. Complete pricing/service-level power

24. FiOS pre-sales to New Frontier

25. 25Mbps problems

26. Google Fiber effect

28. Google Fiber
1. Note that Google Fiber is avoiding Verizon FiOS markets
2. Even if Google builds out all 40 cities it has already announced and the
six cities it is considering, it will pass just 4.3 million homes – small
portion of the total market
3. Note public demand - take-up rates are very high: Bernstein Research
estimates at least 40% of each market Google addresses in the coming
years (very popular in Provo – note $30 installation fee)

30. Macon, GA
Miami, FL

31. Elimination of distance: Empathy
– curiosity about strangers
– looking at life through other eyes
– the enemy of indifference and dehumanization
– awareness of what is greater than ourselves

35. The killer app: economic development
• Fiber networks enable hundreds of thousands of individuals
to work from home, adding tens of billions of dollars annually
to the U.S. economy
• Fiber connectivity adds between $5,000 and $6,000 to the
value of a $300,000 home in the United States
• New jobs, new businesses, talent attraction
• Plus enormous healthcare & education benefits
• Change of mindset: fiber is basic infrastructure 35

36. Cedar Falls, Iowa
• Citywide all-fiber network – state’s first gigabit city as of 2014
• Jim Krieg, general manager of Cedar Falls Utilities: “Twenty
years ago, [Cedar Falls] had 27 businesses and $5 million in
taxable valuation; today, there are 160 businesses and $270
million in valuation.”
36

37. Chattanooga, TN
• FTTH network offers gigabit speeds throughout the city
• Chattanooga has attracted several major companies, including
Volkswagen, which has already spent more than $1 billion
building factories in the area and created 12,000 new jobs, as
well as Homeserve USA and Amazon
• An entrepreneurial boom—new innovation district
• NetBridge, a service that provides the municipal high-speed
Internet access to low-income residents at half price.
37

38. Salisbury, NC
• Fastest Internet access in the country: municipal network is
making 10 Gbps speeds available
• Catawba College will use the ultra-fast connections for its new
Digital Media Creation and Collaboration labs
• "The future is all about rich immersive digital media and being
able to communicate and collaborate with others in real-time
regardless of where people are in time and space.”
• Confronted by TWC attacks and 2011 state law limiting
expansion
38

40. Minnesota: Much Good News
• Many heroes
• State infrastructure grants are important
• Broad political support for those grants is
important
• That’s all fine
• Minnesota can do better

41. The Problem
• Minnesota’s existing high speed Internet
access goals haven’t been met
– Just 86% have access to 10/5
– Not in top 5! 19th!
• Gaps are widening
– Top 6 counties have more than 99% coverage but bottom 13 have less
than 50% coverage
– Prices are far too high

42. Minnesota!
• Minnesota should be looking the rest of the
country in the rearview mirror
• Time for some new recommendations from
the Governor’s Broadband Task Force

43. Fact One
• Federal funding is not going to do it
• Connect America Funding (CAF II) not enough
– Substandard: 10/1 – creates second-class citizens
– Too slow – six years to build
– Recipients Frontier, CenturyLink, Windstream,
Comcast won’t undermine their own roles
– Provides no incentive to build the relevant
infrastructure: fiber/WiFi

44. Fact Two
• Fiber is future-proof – warranted for decades
• WiFi, YES – but needs fiber deep into
neighborhoods!

45. Fact Three
• Wireless connection will never substitute for
fiber capacity
• Interference
• Narrow bandwidth
• Mobile wireless has data caps and overages

46. More on complementarity
• When asked how likely it is that they would cancel a
home high-speed Internet access subscription and only rely
on their smartphone to access the Internet, here is what
people with both services said:
– 63% Not likely at all
– 29% Not too likely
– 6% Somewhat likely
– 1% Very likely
46

47. Data caps and overage charges limit
smartphone substitutability

48. Don’t be fooled
– 85% of people with smartphone also have
wire at home; 95% of wireless is a wire
– WiFi becoming much larger portion of
wireless use than mobile
– Cablecos on track to offer mobile wireless/
WiFi as well as cable

49. Comcast Data Caps on Wired
Connections
"While we believe that 300GB is more than enough to meet your Internet usage needs
if for any reason you exceed the 300GB included in your plan in a month, we will
automatically add blocks of 50GB to your account for an additional fee of $10 each,"
Comcast wrote. "We’re also implementing a three-month courtesy program.
That means you will not be billed for the first three times you exceed the 300 GB
included in the monthly data plan."

50. Fact Four
You are all using gigabit connections

52. Fact Five
• Lower-income Americans have far lower adoption
– Forty-nine percent of households making less than $25,000 used the
Internet at home, compared to 96 percent of households making
$100,000 or more.
– Common Sense Media this week: Only one-fourth of teenagers in households
with less than $35,000 in annual income said they had their own laptops
compared with 62 percent in households with annual incomes of $100,000 or
more
– Price is the primary obstacle
• Many helping hands needed: digital literacy/relevance/application
thinking – but lower prices would make the most difference
52

53. Minnesota
• RS Fiber – an inspiring story
– Very rural area in SW Minnesota
– Collaboration includes support from
city/township, agricultural coop, electric coop
– Ten cities, 17 townships collectively selling bond
– Bank loans covering the rest
– Has exceeded 45% breakeven take rate

54. 090215
Internet Service
Internet Options(Download/Upload) Per Month
UpTo50Mbps/50Mbps...........................................$49.95
UpTo100Mbps/100Mbps.......................................$69.95
UpTo1Gbps/1Gbps*..............................................$129.95
UnlimiteddatausageisincludedFREEwithInternet service.
*Gigabit speedissubject toequipment availability; 1Gigabit =1000
Megabits.
Internet Equipment Rental Per Month
GigaCenter GatewayAndRouter*............................$9.00
*Requiredfor Internet service.
Email Services Per Month
First 6Email Addresses............................................FREE
2015Residential Rates
PhoneService
PhoneOptions Per Month
Local ServiceMainLine...........................................$17.95
Additional Lines........................................................$8.50/Line
DomesticLongDistanceCallingPlans Charge
UnlimitedLongDistance*.........................................$19.95/Line/Mo.
*Residential UnlimitedLongDistanceappliestocallswithintheUnited
States(includingAlaskaandHawaii), PuertoRico, andtheUSVirgin
Islands.
PhoneCents**..........................................................$0.035/Minute
Clear SavingsPlus**
• First 60Minutes......................................................FREE
• Additional Minutes..................................................$0.09/Minute
- Local serviceisrequiredfor all longdistanceplans.
Internet Service
Internet Options(Download/Upload) Per Month
UpTo50Mbps/50Mbps...........................................$49.95
UpTo100Mbps/100Mbps.......................................$69.95
UpTo1Gbps/1Gbps*..............................................$129.95
UnlimiteddatausageisincludedFREEwithInternet service.
*Gigabit speedissubject toequipment availability; 1Gigabit =1000
Megabits.
Internet Equipment Rental Per Month
GigaCenter GatewayAndRouter*............................$9.00
*Requiredfor Internet service.
Email Services Per Month
First 6Email Addresses............................................FREE
2015Residential Rates
PhoneService
PhoneOptions Per Mon
Local ServiceMainLine...........................................$17.95
Additional Lines........................................................$8.50/Lin
DomesticLongDistanceCallingPlans Charge
UnlimitedLongDistance*.........................................$19.95/L
*Residential UnlimitedLongDistanceappliestocallswithintheUnit
States(includingAlaskaandHawaii), PuertoRico, andtheUSVirgi
Islands.
PhoneCents**..........................................................$0.035/M
Clear SavingsPlus**
• First 60Minutes......................................................FREE
• Additional Minutes..................................................$0.09/Mi
- Local serviceisrequiredfor all longdistanceplans.
ABOUT US
From the very beginning, RSFiber has approached
everything we do differently.
Our business model focuses on service to the community and putting
people before profit. We are proud of our small-town roots and small-town
values. RS Fiber wants to make a difference, because we understand how
much our communities are served by having world class technology at their
fingertips — and world-class people who genuinely care about serving their
technology needs.
HOME RESIDENTIAL BUSINESS FARM SUPPORT
ABOUT US CONTACT US NEWS INTERNET
SUPPORT
VIDEO SUPPORT
PHONE SUPPORT
TV2-GO SUPPORT
FAQS
DOCUMENTS &
LINKS

56. One: Invest in Minnesota
• Put $100-200M into fiber infrastructure
• Make this a priority
• Free up private capital by using government
guarantees and loans
Projected MN budget surplus grows to $1.87B

57. ROI
• Returns will include dramatic healthcare and
education savings
• Win competition for talent
• Economic growth
• Retain character of rural areas

58. Two: Set High Standards
• Don’t pay for anything other than fiber
• Paying for copper is throwing money away
• As much as possible, require installation of
dark fiber subject to public obligations

60. Stokab model
– Telecom market deregulated in early 90s
– Vertically integrated incumbents and little fiber
– Great interest in higher capacity and greater competition
– No interest in tearing up streets for multiple operators
– Stokab, 1994, built out dark fiber
– Passive dark fiber, duct, right of way managed by a
publicly-owned entity
– Dark fiber leases available at set costs in defined areas

61. • Stokab sells one product and one product only: point-to-point dark fiber
circuits.
• By not offering any form of lit services Stokab does not compete in the retail
market.

62. ($585M total)

63. $7.3M in dollars

65. "What I like in Sweden is the open fiber.
My apartment is connected to open fiber,
so when you move in you just plug your
computer in and you get a splash page; on
it you can just choose the operator you
want and push a button, and 15 minutes
later you have that operator delivering
bits."

66. Three: Sweat the Details
– Map assets (many places don’t know what dark fiber they
already have, which makes investment decision difficult)
– Dig once for efficient building
– Require new buildings and retrofits of existing buildings to
be fiber-ready – require neutral internal meet-me points
– Streamline permitting (CT “single pole administrator”)
– For starters, self-provision fiber connecting municipal
buildings
– Move incrementally to businesses and then homes

67. Four: Cooperate
• Minnesotan cooperative power is essential
– State grants PLUS guarantees/loans (and don’t rely
on federal money)
– Widespread need for capacity/speed PLUS
organizing
– Co-ops PLUS new private providers
– Not-for-profit sector, Blandin and colleagues, PLUS
everyone else

68. Big Picture: Public Priorities
– Economic growth
– Lower barriers to healthcare and education, and
reduce costs
– Public safety – increase order, increase trust of
community, deploy body cams and E911 systems
– Reduce inequality
– Enhance “brain gain” for rural areas
– Use data to manage, visualize, engage, prevent

70. Moving ahead!
• Overcoming asymmetry of information
• Gathering assets
– Include possible role as ERATE provider
– Access to Lifeline funding
• Financing
– public-private partnerships
– State funding for new co-ops
• Smoothing the way
– pole attachments, rights of way, permitting
• Aggregating public support

71. Just three points
• Because of policy decisions, US is experiencing digital divide
both among Americans and vis-à-vis other nations
• Every Minnesotan needs an inexpensive, persistent, high-
capacity data connection to compete in the 21st century: fiber
+ WiFi
– health, education, civic, collaboration, innovation
• Wholesale fiber networks are like street grids
– retail competition, cloud of WiFi, improve local governance