2023 Advance Local Media LLC. At the end of the day, muni bonds are a good option for investors looking to complete their diversified portfolio. Your email address will not be published. In most cases, muni bonds are tax-exempt from state taxes if the investor buys bonds issued from their state. The Infrastructure and Investment and Jobs Act allocated significant sums of money to facilitate broadband access and affordability to U.S. households. Do leaders want to attract more residents or businesses? Extends better access equity to rural areas and other populated locations that dont represent profit potential to private companies. LLC, Access Fiber by Taylor Electric Cooperative, Beresford Municipal Telephone/Cablevision, Blue Ridge Mountain Electric Membership Corporation, Bluewave Communications (Lumbee River EMC), Bolt Fiber by Northeast Oklahoma Electric Cooperative, Carolina Connect (Mid-Carolina Electric Cooperative), Chippewa Internetworking Consortium (CINC). Close collaboration is necessary to ensure that everyone can benefit from a municipal network launch. These projects are putting significant stress on local finances. City leaders must consider many factors before deploying municipal fiber networks.Some of the most important questions to ask include: Communities must answer these questions to put themselves in the best position to succeed. How much will the network cost to subscribers? qZ #TK ? Telecommunications services, such as internet, TV, and phone, are provided directly to residents and businesses by the community, which has full accountability over the networks success. In the open access model, participating ISPs buy into municipal networks and then have control over which services they provide. Whatever the motivation, communities retain ownership and accountability over their municipal networks. Under this model, communities often work exclusively with a private ISPs to build out fiber infrastructure and operate networks. There are pros and cons to municipal fiber networks. In many cases, this means eliminating budget that is allocated to other broadband service support or ISPs. 2023 All rights reserved. Reliability The town of Cleveland, TN is currently considering a proposal to partner with Cleveland Utilities to install a broadband grid for all its residents. SHARE THIS ARTICLE. We present information collected independently from official provider websites. Since munis avoid this tax, they can be a better investment. Here are the biggest ones you should know. More Local Journalism to Love Start today for 50% off Expires 4/30/23, Michael Ballway | Special to The Republican, announced in November that it would start charging customers extra, Springfields City Council passed such a resolution, begin offering municipal broadband in at least one neighborhood of town. Opponents claim that multiple broadband providers in Cleveland help keep the service affordable. Because the risk is lower with muni bonds, this could help decrease the overall fluctuations of your portfolio as a whole and help you stay on track for your financial goals. They are also a smart investment option for high income taxpayers as they can avoid a higher tax bill with a tax exempt stream of income. There are obstacles that stand in the way of widespread municipal fiber network deployment: For some markets, overcoming hurdles is relatively easy, while others still have a long fight ahead. While U.S. treasury bonds charge income tax on the Federal level, they do not charge tax on the state or local level. You might also want to consult with your investment advisor or accountant to make sure you are limiting any potential taxes you might owe. Cities manage the networks while ISPs compete for subscribers on a common infrastructure. Local governments deploy municipal networks for various reasons. Opponents of anti-municipal broadband laws InLongmont, Colorado, residents have enjoyed high-speed broadband since 2014. Below are examples of municipal broadband providers currently operating and offering cheap broadband for residents. Low Default Risk 5 Cons Of Municipal Bonds #1. Another major benefit of municipal networks is that local governments can closely monitor the services provided by participating ISPs. No Federal Income Tax #2. Municipal Broadband: Background and Policy Debate - Congress Municipal fiber developments are currently outlawed in more than half of the U.S.26 stateshave laws that prevent local municipalities from funding, installing, or managing their own networks. Municipal networks are primarily funded in the following ways: Tax revenues are a primary source of capital for many municipal networks. There are 331 Santa Monica, Californiais one example of a city that has taken the incremental expansion approach. Lack of profit incentive can lead to reduced efficiency in infrastructure expenditures, leading to greater costs. Because municipal networks are managed by local governments, stakeholders may also have concerns about their privacy and information. Government-Supported Broadband: Pro and Con | IT Business Edge These partnerships allow us to connect you with the best providers and products for free. Market dynamics can also make it challenging for communities to successfully launch their own municipal fiber networks. At the federal level, lawmakers are divided on municipal internet providers. Through municipal networks, communities create competitive marketplaces in which consumers have a choice over who provides their broadband services. 2. But year after year the lobbyists kill such efforts. To help municipalities operate their own fiber networks, OSPInsight has built a one-of-a-kind software solution that can support developments of all sizes and complexities. Rather than roll out a uniform solution, leaders can cater to certain populations initially to test their skills at managing networks.When communities have a strong sense of what role fiber can play in the regions development, they are better equipped to make sound decisions around network marketing, execution, and management. Fiber Guide | Municipal Fiber Networks | OSPInsight In many cases, municipal fiber networks provide residents and businesses with quality broadband services at lower annual costs. Cohill was joined by representatives of Westfield's Whip City City Fiber, a municipally-owned ISP that delivers internet to its residents on a city-owned fiber-optic network and which has partnered. IQGeo is a registered trademark. Why It Matters: The Affordable Connectivity Program, Three Ways Rural Broadband Is Creating Positive Change, Internet is Affordable for All: Broadband Not Fueling Inflation, Internet Trends, Fueled by Broadband, That Continue to Soar. Currently,500 communitieshave active municipal networks. Finding the right resources and personnel can be hard, especially in smaller communities. , including a mix of dark fiber networks, Fiber to the Home networks, and business/residential services. PDF Next Century Cities - Institute for Local Self-Reliance Municipal broadband is an internet network and provider owned by public entities instead of private companies. India Expected to Raise $84B In Future Spectrum Auction. Since the interest rate of muni bonds is generally lower than other types of investments, it can be difficult to beat inflation. If you are in the 25% tax bracket, this would be 1 .25 which gets you .75. Municipal broadband (also sometimes referred to as "community broadband") is a somewhat amorphous term that can signify many different ways that a local government might participate either directly or indirectlyin the provision of broadband service to the local community. Medina Fiber and SiFi are among some of the players tapping into private capital to fund their open-access fiber networks. In markets with sparse ISP coverage, municipal networks can be a viable solution for providing high-speed internet residents and businesses. Municipal internet projects tend to be charged significantly higher rates for pole attachments (the cost charged by utility companies to attach lines to and use their infrastructure). Passwords are 6-20 characters with at least one number and letter. Key personnel, organizations, and communities change a lot over time. Rather than rely on external developers and private internet service providers (ISPs), local governments are building their own municipal fiber networks.. Deploying municipal fiber networks requires skill, experience, and resources. But trying to rely on municipal broadband as another competitor or as a . In some municipalities, local governments raise taxes to help pay for network developments.Bonds are also a common funding source for municipal networks. ?Wj5|H(zB0mzD -v/l =|:{B^cfx,TNW1*BxYUqXd}$*phulJC[ch-'XJDhVCpc~aw7~. Broadband and Network The Risks and Rewards of Municipal Broadband (Contributed) Broadband is the most important infrastructure investment a community can make, especially as a new generation. The more stakeholders there are, the more challenging the network is to maintain for all who are involved. Maintaining clear documentation is one of the most important practices when it comes to fiber network management. With OSPInsight, managing municipal fiber networks is much easier. 10 Big Pros And Cons Of Municipal Bonds - MoneySmartGuides.com PLEASE SEE MY DISCLOSURES. To better understand this, you have figure out the tax equivalent yield. Consequently, this means that communities must achieve a certain adoption rate in order to be successful. It is important for communities to understand both the advantages and disadvantages of fiber networks before pursuing large-scale projects. Agawam has 130 miles of streets, Sapelli said. A wireless network might make broadband access more available and affordable for more people. Often called "municipal WiFi," these networks use more than just 802.11 networking. We have to have an alternative to Comcast, Sapelli said. The catch here is that this isnt always the case. Powered by consumers. Overcome your fears and start growing your money today! According to Comcast, 1.2 terabytes is equal to 21,600 hours of music, 34,000 hours of online gaming, 3,500 hours of video chat or 500 hours of high-definition television. We dont recognize that sign in. All content on this Web site is proprietary. UtahsUTOPIAnetwork is one of the best examples of a successful open access municipal deployment today. Your email address will not be published. If municipal bond investors are looking to buy a bond, are they more likely to buy the one that is paying them 5% interest or 10% interest? Pushing Back Against Municipal Broadband | POTs and PANs On one hand, municipal networks are an effective solution for delivering high-speed public broadband services in areas with limited ISP coverage. However, only 46.4 percent of the respondents said that they definitely would switch to this service if it became available. For many cities, it makes sense to deploy municipal fiber networks in smaller steps. Springfields City Council passed such a resolution on Feb. 8, with sponsoring Councilor Jesse Lederman stating that the Internet has become an essential utility for families and businesses, and needs to be regulated in the public interest. When done well, residents and businesses benefit from increased internet access without having to pay exorbitant rates. Compared to corporate bonds, municipal bonds are a low risk investment. Instead, they must collaborative with competitors, which can be a tricky relationship to navigate. The page didnt have what I was looking for. Public service organizations can also benefit from high-speed broadband as better internet can enhance the productivity of key personnel so that they can serve constituents more effectively.Cities must think long-term about their networks. Investing in Municipal Bonds: Pros and Cons to Consider But if the FCC makes such a move, Cleland argues that it will encounter substantial opposition. They also have the capacity to serve dense populations in major urban areas. 2023, Municipal Broadband Opposition Laws: Pros and Cons and Legality. Also, muni bonds have a de minimis rule, where a bond purchased for a minimum discount it is subject to capital gains tax and not ordinary income tax. City of Wadsworth Electric & Communications Dept. %PDF-1.6 % The positive externalities of getting some service rather than none certainly outweighs the drawbacks to government-provided broadband. Several municipalities have created public broadband providers with varying degrees of success. 5 Advantages and Disadvantages of Broadband Connection - HitechWhizz In OSPInsights platform, there are many different ways to look at data in order to evaluate network performance. Note: OSPInsight is committed to fiber and we are optimistic that constituents, regulators, and businesses will find effective solutions. As mentioned above, muni bonds are backed by local and state governments. 66 Pa. Cons. Required fields are marked *. Mitchell also disagreed with Clelands comments about bonds. It may seem safe to invest in them because you are getting a steady stream of income from the interest on your investment. In addition, fiber networks should be designed so that they can easily expand and absorb incremental capacity, if available. Why Broadband with Alyson Moore Rural broadband deployments can be quite challenging. What are the primary approaches to deploying municipal fiber networks. What are the advantages and disadvantages of municipal - OSPInsight Your insight helps, and well do our best to improve your experience. Ad-free. YouTubes privacy policy is available here and YouTubes terms of service is available here. Municipal and county governments are barred by state law from offering broadband service, leaving residents with few options in the state's more rural areas. Rather than use taxpayer money, the citys mayor, Bill King, used a $7.5M revenue bond to upgrade the communitys DSL network to fiber. Municipal broadband networks tend to be established in small and mid-sized communities, often located in rural areas. In addition to offering tax benefits, muni bonds offer other advantages over other types of bonds. Here are the investing terms you need to know, Learn the pros and cons of investing in stocks, Learn how to invest in a volatile stock market, Here is the beginners guide to asset allocation, Click here to learn the investing risks you have to face, Learn the effect of inflation on your money, Learn the importance of a diversified portfolio, Click here for the best short term investments. But that rigor disappears when it comes to the pros and cons of municipal broadband. Of the 2,143 responses collected, 97 percent of the surveys indicated that respondents were interested in the plan. Next take the muni bond yield and divide it by the above. Here, learn everything you need to know about municipal fiber networks and how you can optimize them with sophisticated fiber network management technology. Communities must develop a plan that includes a path to broadband connectivity, while minimizing the inherent risks that come with executing it. 813 0 obj <>stream If a local community and a private firm work together, they may soften the ire of the mega corporate providers who cry foul at the prospect of a municipal broadband network. Wheeler opponents, including industry research consultancy The Precursor Group, say the FCC would be overstepping its authority if it were to take the sort of action Wheeler has threatened. . MoneySmartGuides is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com. Communications Access Cooperative by Hood River Electric Cooperative, DeKalb Advancement of Technology Authority Broadband, ECFibernet (East Central Vermont Community Fiber Network), Elevate - Delta-Montrose Electric Association, Firefly Fiber Broadband (Central Virgina Electric Cooperative), Fort Morgan Fiber Optic Broadband Network, Freedom Fiber (Tombigbee Electric Cooperative), Glenwood Springs Community Broadband Network (GSCBN), HITEC - Hawarden Integrated Technology, Energy, & Communication, Independence Light & Power, Telecommunications, Johnson County Fiber Network (Johnson County REMC), Laurens Municipal Power and Communications, Manning Municipal Communication and Television System Utility, NEXT, Powered by Northern Arkansas Electric Cooperative, Nine Star Connect (Hancock Telecom and Central Indiana Power), Oconee FOCUS (Fiber Optics Creating Unified Solutions), Oregon South Central Regional Fiber Consortium Lighting the Fiber, Red Bolt Broadband (Continental Divide Electric Cooperative), Ruralband (Prince George Electric Cooperative), SECOM (Southeast Colorado Power Association), SGRITA Rural Last Mile Infrastructure Project Last Mile, South Central Connect (South Central Arkansas Electric Cooperative), SVEConnect (Sequachee Valley Electric Cooperative), Tohono O'odham Last-Mile FTTH and Broadband Wireless Network, Town of Islesboro Fiber Network (Islesboro Municipal Broadband), True North (Arrowhead Electric Cooperative), Utah Telecommunications Open Infrastructure Agency (UTOPIA), XStream Internet (Mille Lacs Energy Cooperative). As with any bond in this asset class, you have the risk of changing interest rates. This service requires a modem that uses cables to connect to the satellite dish on your home. And since they are backed by local and state governments, the actual default risk, or the risk of you never getting your money back, is low. If they so choose, they will vote to hold a public hearing, advertise it and hold it. With municipal fiber networks, smaller cities can close the connectivity gap and keep pace with larger urban centers. action against state-level laws that block municipal broadband networks, prohibiting municipalities from offering commercial services on broadband networks, Municipalities are legal creations of the state, FCC had the authority to remove barriers to broadband network deployments, FCC Broadband Fund Awards Almost $21M for Students in 7 States, Puerto Rico, Shentel Reaches Agreement with FCC on Sunny Day 911 Outage, 5 Building Blocks to Drive an Exceptional Subscriber Experience, Explore the Growing Data Demands of Autonomous Vehicles, Balanced vs. Unbalanced PON: Key Differences and Deployment Impact, Solving Your Broadband Network Challenges with GIS, Ensuring Multi-Gig PON Reliability in the Last Mile, Beyond Residential: Capturing New Markets in Your Community, People Spend Almost Six Minutes Finding Streaming Content, Colorado Demonstrates Why a Mapping Challenge Process Is Critical, Introducing iGLASS Networks Now Part of the ISPN Family, Blue Stream Fiber Expands Presence in Orlando, Wisconsin Awards Lifeline Outreach Grants, Fastbridge Fiber Begins Construction in Three Pennsylvania Markets. L Risk Of Default #4. It is important to look at how you will invest your money and compare that with the potential loss from rising inflation. Influence-free. This high speed makes it ideal to be used for downloading large videos, music and other files. The first phase of Medina Fiber's open-access FTTH network deployment is fully funded and will cost close to $8 million to construct. Or, states may require communities to work with private ISPs, which may see municipal networks as threats to their success. What capacity is needed for future bandwidth demands? Should communities want regional ISPs to participate in their networks, they need to know how to incentivize effectively. If the FCC goes forward with this preemption of state authority, count on 20+ state attorney generals to challenge constitutionally the FCCs frontal assault on their core sovereign state functions of determining economic and fiscal policy, wrote Cleland. Here, learn everything you need to know about municipal fiber networks and how you can optimize them with sophisticated fiber network management technology. Line of sight is required between the transmitter and the receiver. As this issue evolves over the coming years, the state-level responses and the successes and failures of municipal internet projects will become more apparent. Timnath town officials want to partner with a neighboring municipal broadband provider to bring high-speed internet to town, but who, when and how to pay for it are questions without answers. Maryland Broadband Cooperative is a not-for-profit 501(c)(12) charged with offering, through our members, expanded and world-class network services around the state. Springfield may become the first big city in New England to invest in municipal internet. They're not rate-regulated and are subject to only limited regulation of service quality. Tax savvy investors know that municipal bonds are a great way to diversify your investment portfolio. Understand this is rare, in fact much lower than 1% versus close to a 7% default rate risk for corporate bonds. Noting that there have been more than 400 municipal projects to date, Chris Mitchell director of the ILSRs Community Broadband Networks Initiative said there were some projects that didnt work out but others that have had major benefits. Some of these reduce barriers to such projects and even enact state-level definitions of broadband. San Antonio's COVID relief package allotted $27 million dollars toward expanding municipal broadband structure to give residents internet access after a study found that 40% of households did not have home internet. However, if you bought Maryland muni bonds and live in Virginia, then there is state income tax you owe. Cities and providers collaborate to set performance standards and share accountability over the success of the network. How Should Broadband Be Regulated? | The Pew Charitable Trusts Allconnect is an independent, advertising-supported publisher and comparison service. hb``` cb LG(&5te1@}kCo$B33O/ r$;{= 6hr81+\MFM2?tD(',f5#v[^ jp%#MI;l)&5L@)u 5 YAh k[b : #Ko81sxuaC MmX&BN>f1 In addition, the upfront and ongoing costs of deploying a municipal network can be significant. This means that you can typically expect your investment to fluctuate less than if you invested in stocks or other types of more risky investments. Comcasts proposed data charges affect customers in the Northeast, including Massachusetts, who are not subscribed to an unlimited plan. are used by BROADBANDNOW only to describe products and services offered by each respective trademark holder. Municipal networks also help promote community-wide economic development. The federal government recently passed H.R.3684. Almost annually in North Carolina, proponents for better broadband take a shot at overturning the municipal broadband ban. A market research firm was hired by Cleveland Utilities to gauge the interest in the potential partnership between the town and the utility company. Households exceeding the 1.2 terabyte cap would be charged $10 per 50 gigabytes of data, up to $100 per month. Start out by subtracting 1 from your tax rate. Since municipal bonds are low-risk investments, they also have relatively low volatility. You should know both the pros and cons involved so that you can serve your community's internet needs effectively over the long term. We regularly update the site in an effort to keep this information up-to-date and accurate at all times. By subscribing, you agree to receive Allconnect promotional emails. What are the advantages and disadvantages of municipal fiber networks? As a result, residents often have access to high-speed internet at a lower cost than they would otherwise. The right one for a community depends on several factors, including existing ISP presence, fiber deployment expertise, and the goals of city leaders. Want to stay connected with the latest deals? Municipal networks should support current technology and future development. One of the primary benefits of municipal networks is that they help level the playing field.. MoneySmartGuides may be compensated if consumers choose to utilize the links located throughout the content on this site and generate sales for the said merchant. However, if you are using an investment strategy that is meant to help protect your assets, then this drawback might not be a big issue for you. Launched in 2010, Chattanoogas network has turned the area into an attractive destination for innovative businesses and young tech talent. The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of Advance Local. 0 Stat. Home Municipal Broadband Opposition Laws: Pros and Cons and Legality. BROADBANDNOW is a comparison and research website that does not offer internet, TV, or home phone service. Municipalities are legal creations of the state, not the federal government, argued Scott Cleland, president of The Precursor Group, in a blog post from earlier this week. High-speed internet is essential for residents and businesses that want to participate in the global economy and take advantage of technological advances. Tech media love to be hard-hitting except when it comes to muni broadband If you decide to sell before it matures, then you will earn more money. Dark fiber municipal networks are those in which communities install fiber cables without the components needed to actually activate the networks. For a number of reasons, private ISPs are not able to deliver quality broadband in every market. If you need to access the money you put into your muni bond investments, it can be done easily. Copyright 2023, IQGeo UK Limited. 774 0 obj <> endobj Fiber deployment costs have come down significantly over the last several decades. Municipal broadband is a broadband Internet service that is entirely or partially owned and operated by a public entity, usually a local government or public utility provider . Now, residents have access to 100Mbps service for $40 per month and 1Gbps for $60 per month without having to commit to any contracts. Note that this list might differ slightly from lists at other sources, due to different methodologies for determining when to count a network as its own entity due to network sharing arrangements. Through these networks, communities are able to deliver high-speed internet directly to homes, spark regional innovation, and jumpstart economic development. Comcast later said it would suspend implementation of the plan until August. Setting up such a system will be harder in Agawam than in cities like Holyoke and Westfield, Sapelli said, because unlike those cities, Agawam does not have a municipal electric utility. The following states have bans enacted on public broadband: Alabama, Florida, Louisiana, Minnesota, Missouri, Montana, Michigan, Nebraska, Nevada, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, Washington and Wisconsin. Joshua holds a degree in sociology from the University of Tulsa and worked as a behavioral anal Read more, Camryn Smith 6 min read, Robin Layton 4 min read, Alex Sheehan 5 min read. More and more, communities are choosing the private-public deployment route. Here are the pros and cons of fixed wireless internet: Pros. #X^SdR;C1i=VIo$d?-SB)hgJ A wireless access point in a municipal network is also different from a typical WiFi hot spot. Despite the creation of BEAD, public broadband projects remain a controversial topic among lawmakers. There are 10 pros and cons to municipal bonds. Tennessee Town Weighs the Pros and Cons of Municipal Broadband. Municipal networks can be extremely effective in areas where leaders have fiber network management experience and private ISP coverage is lacking. Superfast speeds. The task force consists of five town officials, IT Director Jeff Hulbert, City Councilor Rosemary Sandlin, Planning and Community Development Director Marc Strange and Cable TV Manager Les Tingley, as well as two residents at large, Brian Burbank and Paul Jenney. Whip City could serve as a model for Agawam, said Sapelli, or as a vendor. Yes No. As for FCC authority, Mitchell said the recent Net Neutrality court decision said that the FCC had the authority to remove barriers to broadband network deployments. Cleveland Utilities claims that their all-fiber network will deliver higher speed and better rates for all participants. If you were to invest in U.S. government bonds or corporate bonds, you would be paying Federal income tax on the interest you earn on these bonds.
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