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UC2B Funding Raises Concerns About Open Access

By Jim Meadows

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(Duration: 5:30)

Supporters of the UC2B Big Broadband project know they want a high capacity broadband network for the Champaign-Urbana area. However, there is concern that the way money for UC2B is being raised could hinder the project's long-term commitment to open access.

The UC2B project would allow individuals to access fast internet access, and enable businesses to launch their own Web-based services.

The worrying began last month, when UC2B announced plans to apply for funding from start-up company Gigabit Squared to complete construction of their broadband network. Gigabit Squared specializes in helping to develop such networks, and it is holding a competition among college towns that are part of the nationwide Gig U project.

Urbana Alderman Brandon Bowersox-Johnson is on UC2B’s Policy Committee.

“(So) if we don’t win the competition, we will try to find other private partners, who would build out the network in Champaign, Urbana and Savoy under these same terms,” Bowersox-Johnson said. “The same pricing and the same four-year commitment to build in order of neighborhoods, and build the whole town in four years.”

Government grants paid for the first part of UC2B’s construction --- the fiber rings that are the backbone of its network, connections to local institutions, and connections to customers in broadband-poor neighborhoods. Now, UC2B is looking for private investors to help them complete the build-out, and that is causing some of UC2B’s supporters to worry about the project’s pledge to maintain open access --- that is, keeping the network open to any business that wants to use it to provide services.

“The big concern is if we don’t nail down this open access issue is that five years down the road, we could have somebody basically say well, we’re bankrupt or we’re selling the system,” Urbana Alderman, Charlie Smyth said. “Under the selling of the system, they could sell to Verizon, Comcast, AT&T  and we’re back to square one, without real competition, without open access.”

Smyth said most telecom networks like Comcast and AT&T don’t offer open access, because they can make more money selling services on their broadband networks than by opening the network for others to use. But he argues that open access is essential for the nation’s economic well-being.

Smyth said communities need broadband networks that are like their road networks --- supported by all, and open to all.

“The government isn’t making money off of the roads,” Smyth said. “If anything, we’re losing money on those roads. But everybody else, everybody who uses those roads, uses them for their own economic purposes, whether it’s driving to work, or running your trucks that are delivering freight, or moving goods and services up and down for various companies. It is an economic backbone of the country.”

Gigabit Squared promises open access, but Smyth wants more assurance that their promise will be a lasting one.

One of the organizers of UC2B thinks that concern can be addressed. Mike Smeltzer, with CITES, the University of Illinois’ information technology unit, said because UC2B already owns the fiber backbone of its network, they will have some leverage when they negotiate a contract with Gigabit Squared or any other private investor.

“We would enter into a contractual relationship with either Gigabit Squared or another private provider to use those rings,” Smeltzer said. “But it wouldn’t be a life time commitment; it might be a five-year commitment. And if we weren’t happy with the way that either Gigabit Squared or a successor company was providing the services, we could always just not renew that contract to use the rings, which kind of puts them out of business.”

Urbana council members are working on a resolution that spells out their concerns about UC2B, and re-states their commitment to open access. The resolution urges UC2B to explore alternatives to private investment, including the possibility of municipal and co-op ownership. The latter is being promoted by Peter Folk, the CEO of Volo Broadband. Folk said he wants to see UC2B succeed, in part because his own business could use it to expand the scope of its broadband service. Folk’s plan to preserve local control for UC2B is for community members to share in ownership and investment.

“There are hundreds – almost a thousand, actually --- cooperative power companies in the nation,” Folk said. “And they operate on that model, where you have a share in that company when you become a member of the coop. And it’s that equity that you bring to the table that allows the company to build out its network.”

While Folk develops his co-op proposal, the Urbana City Council is scheduled to take a final vote on its open access resolution tonight.

Meanwhile, UC2B plans to hook up its first residential customer sometime this week. The city of Champaign, the lead agent in UC2B operations, last week put out a “Request for Information” call to potential investors in the broadband network. The only identified potential investor so far, Gigabit Squared, is expected to announce in the fall whether Champaign-Urbana is one of the college towns to win its competition for funding.