Loading...
HomeMy WebLinkAboutLake Minnetonka Communities Complete Market StudyLake Minnetonka Communities Complete Market Study Wed, May 25, 2011 | Posted by christopher The Lake Minnetonka Communications Commission has finished its market study of some 17 communities in the western suburbs of Minneapolis. LMCC has long been examining solutions that will expand fast, affordable, and reliable access to the Internet. Dick Woodruff, chairman of the Tonkaconnect working group and a member of the Shorewood City Council, said that overall the results were positive. He said that the majority of the people surveyed indicated that they had no objections to the LMC C getting into a competitive FTTP business and that they would become customers if the Tonkaconnect services were offered at a lower price than providers already in the area. … While the results of the market survey are encouraging to the Tonkaconnect grou p, there is still more work to be done before they can deem the project feasible. Woodruff said that the next step in the process would be to complete a business plan and financial model for the fiber project. LMCC will consider what to do next at a meetin g in June but has not budgeted funds for the next step in building a universal FTTH network in those communities that choose to take part. Regarding the survey: The first question, though, asked if respondents believed that the LMCC and local governments should "provide locally - owned, competitive choice of TV, Internet and telephone services to every home, business, school, governmental buildings, etc. in the LMCC area." Strong majorities consistently agreed that LMCC and local governments should get involved but the survey was also very clear that respondents were mostly concerned with price. We see the same results elsewhere, particularly in times of economic stress. Consider a national cable network, "National Cable." In Anywhere USA, most people subscribe to National Cable at a monthly rate of $140/month for phone, video, and broadband. Anywhere decides to build a community fiber network and charge $105 for similar services but the broa dband is considerably faster and more reliable using the next - generation network. National Cable responds by offering a deal for $95/month for what people had been paying $140/month for. After all, National Cable is so big, its costs are lower than the new community network. And National Cable, if it chose to, could run its Anywhere operations at a loss for many years due to its fat margins in all the communities without a real choice in providers. Do not be surprised to see a lot of people going to Nationa l Cable to save that extra $10/month, even though it may deprive the community fiber network of the revenue necessary to meet the business plan. If the community network were to disappear, National Cable would raise its prices right back up to $140/month. This is a real community conundrum. The community network provides tremendous benefits, but may not be appropriately recognized as the agent responsible for saving everyone in the community a lot of money. LMCC completes fiber study By Amanda Schwarze Staff Writer Published: Friday, April 29, 2011 3:36 PM CDT If the price is low enough, people in the area would be interested in becoming customers of a fiber - based network operated by the Lake Minnetonka Communications Commis sion (LMCC). The LMCC recently completed its Fiber - To - The Premise (FTTP) market study. The study, conducted by CCG, LLC, a national consulting firm, was done to gauge the level of support in the area for a community based and locally controlled high - spee d all - fiber network to the area. The proposed project - called Tonkaconnect - would be an option for high - speed Internet, television and telephone services to everyone living in the area. The network would act as an additional offering to residents, so pe ople would still have the option of buying the services from providers such as Mediacom. CCG completed telephone surveys of 1,774 individuals living in the 17 LMCC member cities (Deephaven, Excelsior, Greenwood, Independence, Long Lake, Loretto, Maple Pla in, Medina, Minnetonka Beach, Minnetrista, Orono, St. Bonifacius, Shorewood, Spring Park, Tonka Bay, Victoria and Woodland) and Mound. According to an LMCC press release on the study results, the amount of people surveyed was enough to achieve a 95 percent statistical accuracy. Dick Woodruff, chairman of the Tonkaconnect working group and a member of the Shorewood City Council, said that overall the results were positive. He said that the majority of the people surveyed indicated that they had no objection s to the LMCC getting into a competitive FTTP business and that they would become customers if the Tonkaconnect services were offered at a lower price than providers already in the area. Woodruff said that he participated in a conference call with a CCG c onsultant shortly after the survey was completed. He said that the consultant said that LMCC's results were similar to studies done in other communities that eventually completed projects that became successful. Woodruff said that the consultant also noted that in some cases the LMCC's results were more favorable than results in those communities. While the results of the market survey are encouraging to the Tonkaconnect group, there is still more work to be done before they can deem the project feasible. Woodruff said that the next step in the process would be to complete a business plan and financial model for the fiber project. That would require hiring a consultant to do the work. Woodruff said the LMCC did not include money for that work in the 2011 b udget. He said that the Tonkaconnect group would discuss the issue and talk to the LMCC about next steps in June. "It's a slow process," Woodruff said. Survey information The study broke the surveyed cities into five different groups. Woodruff said many of the LMCC cities are too small to produce a statistically sound survey sample. Mound was the only city out of the 18 communities in the study that was surveyed individually. Woodruff said that Mound has enough households to make the results of the surv ey in the city statistically sound. The rest of the cities were broken into four groups with geographic proximity and similar demographics. The four groups were: ¥ Group 1 - Deephaven, Woodland, Greenwood and Shorewood ¥ Group 2 - Excelsior, Minnetonka Beach, Spring Park and Tonka Bay ¥ Group 3 - Minnetrista, Victoria and St. Bonifacius ¥ Group 4 - Orono, Long Lake, Medina, Maple Plain, Loretto and Independence The survey consisted of 23 questions, many of which asked about the Internet, television an d telephone services that are available to the respondents and whether the respondents would be willing to purchase those services from the LMCC's fiber network. The first question, though, asked if respondents believed that the LMCC and local governments should "provide locally - owned, competitive choice of TV, Internet and telephone services to every home, business, school, governmental buildings, etc. in the LMCC area." The majority of respondents in all five groups - ranging from 60 percent to 69 perce nt - answered "yes." The second most popular answer in all five groups was "don't know." Only 7 percent to 11 percent of respondents in the five groups answered "no." The results also showed that the majority of respondents were usually satisfied with the ir current high - speed Internet, cable television and telephone service providers. Some questions asked respondents to rate the current services they receive for issues such as speed, reliability and value compared to the price paid for the services. People could choose to reply that they were extremely dissatisfied, somewhat dissatisfied, neutral, somewhat satisfied or extremely satisfied with their current services. The majority of the respondents answered that they were neutral, somewhat satisfied or extr emely satisfied with their current services. When asked if the respondents would consider buying the same services from the LMCC, most people answered that they would do so if the LMCC could offer a lower price. More information on Tonkaconnect can be fo und online at www.tonkaconnect.com .