Indiana Town Takes Broadband Into It's Own Hand

Scottsburg, Indiana, Mayor Bill Graham didn’t want to be in the telecommunications business, but what options did he have? Unable to get the high speed Internet service they needed, businesses in his town of 6,040 were about to leave. And unable to get the private sector to provide that service, it fell to the town to build its own system. At a community broadband event hosted by the Center for American Progress last February, Mayor Graham hit the highlights of a story that may sound all too familiar to small, rural communities around the nation.

Prompted in 2001 by efforts to create a center for technology, innovation and entrepreneurship, the good mayor conducted an informal survey to find out what businesses thought of the town’s telecommunications infrastructure. The results were eye opening. As he put it, “…we were overwhelmed with what we found out.”

What they found out was that without broadband, the Chrysler dealership would leave and take its 60 jobs with it; a local defense contractor nearly lost a $2 million dollar contract because it couldn’t get online to submit a bid; a local plastics company was planning a major expansion but would have to do it elsewhere.

They also found out that a T-1line (a phone/data line capable of 1.5 megabits per second or 60 times more than a typical residential set up) would cost $1350 a month in Scottsburg. By comparison, it only cost $350 in Louisville, Kentucky, 29 miles away. Trouble was they couldn’t get a T-1 line in Scottsburg nor any other type of broadband infrastructure because the region’s major telecommunications providers all told the mayor that ‘economies of scale will not permit us to bring that to your community.’ This, despite the fact that the cable provider had just ripped up the city’s streets to lay fiber optic cable on its way through to serving bigger communities up the road.

Even more depressing, 18 months of studying the situation led only to the conclusion that it would cost $5 to $6 million to hard wire a fiber optic loop around Scottsburg. Needless to say, the town didn’t have that kind of money to spend.

Finally, and fortuitously, Mayor Graham found a company that could build a wireless system to serve Scottsburg for a fraction of the cost of fiber--$275,000 to be exact. And by spending a bit more ($385,000 total), the town was able to cover the whole county and two smaller towns nearby as well.

Did it work?

They projected 100 paying customers in the first year; they got 500. Indeed, the system worked so well and was so well received, that they’ve now expanded it to serve seven counties. For $35 a month, residents can get 512 kilobytes upstream and down. For $70, they can get 1 megabyte. Business can get 1.5 megabytes (equivalent to a T-1 line) for $200 a month, not $1350.

As Mayor Graham said, “We have industry and business coming to Scottsburg because of our high-speed wireless, not leaving…We’re growing like crazy.”

Perhaps too crazy—at least for private providers. With success comes attention and the phone and cable giants are paying plenty of attention these days. As reported here last week, 13 state legislatures (including Indiana) have turned a sympathetic ear toward the whining of private providers seeking to trample the rights of municipalities to ensure broadband service and all the benefits it brings for their citizens. Fortunately, all but one of those legislative attempts have been rebuffed and the 13th—in Nebraska—is being reconsidered. In Indiana, they’ve just beaten back yet another attempt.

Not surprisingly, Mayor Graham isn’t exactly keen on efforts to quash municipal broadband.

“I came out of the private sector,” he said. “I’m very much for the private sector. I don’t want to compete with the private sector, but I want to control my own destiny and that for the people of Scott County and that for all of the Hoosiers and everywhere else. You know, don’t tell me I can’t do this when I know it’s the right thing to do, and I can do it cheaper and do it more reliably and do it much, much faster.”