Archive for Tuesday, January 29, 2008

Internet firm’s plan raises questions

Lawrence Freenet wants city to co-sign $4.9M expansion loan

January 29, 2008

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Internet company seeks city backing

A non-profit Internet service provider is seeking city backing for a loan of nearly $5 million. Enlarge video

Alex Kaufman, of Community Wireless Communications, loads gear into a Lawrence Freenet truck outside the Lawrence Freenet offices, 4105 W. Sixth St, in this 2008 file photo.

Alex Kaufman, of Community Wireless Communications, loads gear into a Lawrence Freenet truck outside the Lawrence Freenet offices, 4105 W. Sixth St, in this 2008 file photo.

Editor's note: The Lawrence Journal-World is owned by The World Company, which also owns Sunflower Broadband. Sunflower Broadband and Lawrence Freenet are competitors in the Lawrence Internet service provider market.

The Lawrence City Commission is being asked to co-sign a $4.9 million loan for Lawrence Freenet to finance that company's plans to expand its wireless Internet service in the city.

Freenet leaders say in exchange for the unusual financial arrangement, they'll guarantee that every child in the city under age 18 will have free access to wireless Internet service. They're also agreeing to provide the city with enough installed underground cable to synchronize the traffic signals on major city streets, along with providing city government with free Internet access.

The majority of city commissioners, though, said the proposed deal creates a host of legal and ethical questions about what role city government should play in private enterprise. Some commissioners also are asking questions about whether the not-for-profit Freenet has adequately explained its relationship to a for-profit company created by Freenet's founder.

"They have great, positive, ambitious goals, but unless staff can give me some very good reason, I am not at all comfortable co-signing a loan," Mayor Sue Hack said.

Commissioners are being asked at their Tuesday evening meeting to hear the proposal and determine whether they want to reject the plan or ask staff to investigate it further.

The deal

Joshua Montgomery, a founding member of Freenet and company spokesman, said Freenet has plans to install 25 miles of underground cable, expanding the company's ability to provide Internet service from about 60 percent of the city to about 95 percent.

Montgomery said Freenet and its partners can get private financing to complete the expansion without the city co-signing the loan. But if the city agreed to co-sign, the interest rate would drop from 12.5 percent for 60 months to 5.5 percent for 120 months. That would reduce the loan's monthly payment by about $57,000.

In exchange for that help, Freenet would start "Freenet Kids," which would provide free, filtered, wireless Internet access to children via a user name and password wherever Freenet has a signal.

Freenet also is proposing that: the city would have use of about $1.9 million worth of fiber-optic cable that could be used to synchronize traffic signals; Freenet would provide improved access to the city's public library Web site; and the company would give the city Internet accounts for city employees.

Freenet would pay for the loan through sales of its Internet service. Montgomery said he is counting on individuals to buy the service and not use the filtered Internet access that may be available to the children. He said there isn't a method planned to stop adults from using their children's free accounts, and that the company needs to grow its paid subscriber base from about 1,100 today to 6,000 in two years to meet its financial plans.

Montgomery said the proposition is a low-risk deal for city leaders because the city would be the fourth guarantors on the note. Freenet, its for-profit service provider and Montgomery all would be guarantors ahead of the city.

"It is very similar to what would happen if you asked your dad to co-sign a loan," Montgomery said.

Split commission

A majority of city commissioners, though, aren't so sure. Commissioners Mike Amyx, Rob Chestnut and Hack all have expressed reticence.

All have posed questions of whether the city has the legal authority to back a private loan, but they've also expressed concern about whether it is the proper role for the city.

"I'm somewhat skeptical about even pursuing this at all because it opens the door for us to get involved in some private enterprise matters that we perhaps shouldn't be involved in," Chestnut said. "It brings up the question of whether we are providing something that, in fairness, we should be providing to other people, too."

In 2005, the previous City Commission allowed Freenet to place its wireless equipment on city water towers. The company pays $10 a year to locate on city water towers, a significant discount from the $1,000 to $2,000 a month that the city charges wireless telephone providers to locate on the tower.

But commissioners previously said they were fine with that subsidy because Freenet was different than for-profit Internet providers such as Sunflower Broadband or AT&T.

When Freenet first approached the City Commission, it was using a public television business model, where no one was charged for the service, but Freenet would rely on donations and pledge drives to sustain itself.

That model did not last long. Adam Mansfield, president of Freenet, said it became apparent that the business would need to generate money to pay expenses.

"That initial effort basically was a bunch of people getting together working with off-the-shelf radio equipment," Mansfield said. "It basically was some nerdy folks trying to figure out if we can make this work ourselves."

Now, the company sells service for $19.98 a month, which is at or above the rates charged by for-profit service providers in the city. The company commits to use 10 percent of its revenue to provide free service to qualifying low-income residents. According to the last quarterly report filed with the city in October, the company had 1,144 paying subscribers and 90 individuals who were receiving free service.

Freenet's proposal has drawn opposition from Sunflower Broadband. Patrick Knorr, The World Company's chief operating officer, said Sunflower has been providing community service to Lawrence long before Freenet was established. And he said the company has been doing so without a public subsidy.

"Asking the community to pay for us to serve the community, I think that would be outrageous," Knorr said. "I find it outrageous that any competitor is asking for that."

Knorr said Sunflower provides discounted Internet service to 341 nonprofit organizations as part of a program started in 1995. The company also provides more than 50 "hotspot" locations where people can access wireless Internet for free and without a Sunflower account. That program began in 2001.

In December, Sunflower started its own program to provide free Internet service to qualifying low-income individuals. The company has signed up 32 people in less than two months, Knorr said.

Knorr said he would urge the city to reject Freenet's proposal, in part, because Freenet's past business assumptions have been wrong and there's no reason to think the most recent projections are any more accurate.

"If this was sustainable, sound business, they wouldn't need to be this creative with their financing," Knorr said.

The fact that Freenet is now competing with traditional for-profit companies also is giving some city commissioners pause.

"It certainly has expanded from what I was comfortable with in the beginning," Mayor Hack said.

City Commissioners Mike Dever and Boog Highberger said they are comfortable with the city's arrangement, and want to look at the $4.9 million credit proposal.

Dever said the amount of fiber optic cable that city government would gain use of could have a significant value to the city. He said the city likely would need to spend millions of dollars to put in cable for a program to coordinate traffic signals.

"You have to look at what we're being asked to do versus what we could gain," Dever said. "I'm interested in pursuing extraordinary pursuits to have an extraordinary community."

Comments

Joshua Montgomery 7 years, 3 months ago

Please See the Lawrence Freenet Project's Official Response

http://tinyurl.com/29v2qd

Keith 7 years, 3 months ago

Wow, two articles in one day, the World Co. is really protecting its turf.

monkeyhawk 7 years, 3 months ago

Joshua is asking every taxpayer in the city to guarantee $4.9 million dollars. His not-for-profit business has shifted to a for-profit business, (but is still misleadingly named FREEnet?) and he thinks that the city will be enticed by free stuff? I know of one commissioner that loves freebies, but the others we elected are business people, not social welfare reps. I guarantee if I am forced into co-signing for this private company, I will be first in line asking the city to co-sign on my next venture. But, I will come armed with many years of business acumen.

"That model did not last long. Adam Mansfield, president of Freenet, said it became apparent that the business would need to generate money to pay expenses." Oops, bad planning. The kids found out that it takes money to operate a business. Since they are now a for-profit company, I would expect them to pay the same rate for housing their equipment on water towers as other service providers.

If I wanted to gamble with millions of dollars (OPM), I would buy into something like an empty bus system. It looks like the city has already gotten scammed once by this "free"net.

BigPrune 7 years, 3 months ago

Gee, this thing reeks as corporate welfare, and why is it called "free" when in fact it is NOT free at all? FREEnet is just like SMARTgrowth - to define them means exactly the opposite.

Eileen Jones 7 years, 3 months ago

Anonymous user Keith (Anonymous) says: Wow, two articles in one day, the World Co. is really protecting its turf.

That explains why our mayor suddenly developed a concern for ethics in business.

toefungus 7 years, 3 months ago

There may be other ways to raise the capital that they need. I like competition. Don't forget that Sunflower also has corporate welfare in favorible tax laws, limitations for years on what telephone companies could send over wires, and limitations on the ownership of TV and newspapers by a single parent company. All of these were put in to protect small media outlets. It is just a public battle for public resources. Let the games begin.

Ralph Reed 7 years, 3 months ago

Good post toefungus (anonymous).

In fact, the other article says that Freenet has the capability to secure a loan at a higher interest rate, costing them about $57K more over time. All that co-signing will do is save them the extra interest.

It is a public battle for public resources. Maybe this will bring about "gas wars" like we had when I was a kid.


I'm me. Who are you behind your hood of anonymity?

monkeyhawk 7 years, 3 months ago

"It is just a public battle for public resources."

No it isn't. It is a private company asking taxpayers to guarantee $4.9 million dollars. I would have extreme reservations putting faith in people who did not have enough foresight to understand that they could not ever operate as a not for profit. Or, maybe they just decided to become capitalists. And, as good little capitalists, they will understand that they need to pay the going rate to house their equipment on city property. No more "free" rides.

SettingTheRecordStraight 7 years, 3 months ago

So it's not really "free" if the taxpayer is co-signing a potentially risky loan? Bad, bad, bad idea.

newsreader 7 years, 3 months ago

The FreeNet response, at the bottem, says that computers are "free" while with Sunflower you have to "provide your own". Does this mean they are going to be running around passing out labtops?

billmore 7 years, 3 months ago

To me, it doesn't really matter how you slice it. Municipalities give hand-outs to businesses -- It has and will continue to happen. At least in this case, if Freenet pulls the deal off, the taxpayers really aren't out anything (and there are other co-signers in the event of a failure). In the usual tax deals, we end up paying out regardless of the outcome.

I applaud Freenet for at least finding a way to (potentially) get help from the city that doesn't mean my taxes go up again.

SoupBone 7 years, 3 months ago

It seems to be OK to provide corporate welfare to businesses that have City Commissioners as part owners....

compmd 7 years, 3 months ago

"The company commits to use 10 percent of its revenue to provide free service to qualifying low-income residents"

BigPrune, perhaps you missed that. You also clearly did not read Freenet's response to this article. Or maybe you work for Sunflower.

Sunflower is upset that their profits are being cut into. Mr. Knorr, how much does Sunflower charge local businesses for a hotspot? Is that different than what Sunflower charged before Freenet came around? And why do they now offer their "Lifeline" service?

Sunflower does not compete with Lawrence Freenet. They offer completely different services. Sunflower's service involves tying you to one location and ridiculous bandwidth caps. Freenet allows you to sign on anywhere in the city where Freenet has an access point and has no bandwidth caps. And do you really think that Sunflower is going to run cables to traffic lights?

What's wrong Mayor Hack, you won't back an advanced, promising and innovative local business that you don't have a financial stake in? You wouldn't have any ties to the World Company by chance, would you? And if you did, would you recuse yourself from discussion about Freenet? Oh, how about that, you are a Sunflower customer too! And so are you, Mr. Chestnut. Two out of the three opposing commissioners are Sunflower customers. Funny stuff.

If I'm not mistaken, the point of having the city back the loan is because Freenet will provide services to the city. City employees, city traffic lights, and the city library. And Freenet Kids serves the public good.

Don't kid yourselves, this is all about Sunflower angry about losing profit. I for one will be at the commission meeting tonight to support Lawrence Freenet.

Posted from a Lawrence Freenet access point.

funkdog1 7 years, 3 months ago

newsreader said:

The FreeNet response, at the bottem, says that computers are "free" while with Sunflower you have to "provide your own". Does this mean they are going to be running around passing out labtops?

Freenet collects individuals' and businesses' discarded computers, refurbishes them and gives them away for free to their low-income internet users who don't have a computer.

Baille 7 years, 3 months ago

Read the commission agenda. At the end of the day, the proposal won't cost the city anything and the city gets state of the art infrastructure in return. Plus all Lawrence kids get free access to the internet wherever they may be in Lawrence.

monkeyhawk 7 years, 3 months ago

Does this company have the right to lay all that cable? Are they entitled to the same right of way as utilities?

There is already "free" internet access for anyone who desires it in the form of the public library and in all of the schools.

For those of you who believe that this is a good deal and won't cost the city anything probably rents or has a sub prime loan. If they default on the loan, it is the taxpayers holding the bag.

Amazing how some of you howl over TIFs, etc. to tax paying businesses, but when it has the "free" label, or "it's for the children" you get sucked in.

Fact is, it is a private business, still wet behind the ears, asking the government to help out. That is what the SBA is for. Let them find their own financing the way any other business does. This is purely a speculative deal.

zettapixel 7 years, 3 months ago

"Let them find their own financing the way any other business does. This is purely a speculative deal."

Moneyhawk... I totally agree with you on that one! A business should not have to rely on handouts in order to stay afloat. If it can't stand on its own two feet, then the business model probably isn't viable and should be terminated.

Godot 7 years, 3 months ago

Follow the lender's lead in this. If they need 12.5% for the risk this loan represents, at a time when the Fed fund rates are near all-time lows, then they are telling us this is not a good risk; reducing the rate to 5.5% if the city co-signs means that they expect these guys to default, and know that they city will pay up.

Where is the policy regarding such a giveaway? This is the same as a that so-called rebate.

And, if Freenet is only borrowing $5 million (rounded up), how is it that they expect to provide the city with use of millions and millions of dollars of equipment in return? Sounds very questionable.

I agree with Monkeyhawk. This is a scam.

Dave Greenbaum 7 years, 3 months ago

Interesting some of the inaccuracies in today's story.

First, Sunflower provides NO free Wireless Access. Those Sunflower HotSpots are paid for by the business owners. Coffee shops and other business are given NO discounts for declaring themselves a Sunflower HotSpot. In fact, Sunflower requires them to put a Sunflower Ad on their Window and to change their network name to include sunflower information. Heck, Sunflower doesn't even provide the router.

Second, the city is already in a "private enterprise matter" with a for-profit company. Each month, the city gets a profit sharing "cut" of every dollar Sunflower bills via a franchise fee.

That's really what it comes down to. When Sunflower makes money, the city makes money. When Sunflower looses customers, the city looses money.

And what exactly does the franchise fees go to. I'm sent many emails and never received an answer. At least with Freenet, they tell us what they do with their money.

Finally, can't help but notice the city council members expressing concern are all Sunflower customers based on their contact infromation from the city website. I'm assuming they won't vote on the issue due to conflict of interest?

StephenColt 7 years, 3 months ago

I find it ironic that none of the questions raised by the plan are really about the plan itself, rather in the execution of the plan. Does this mean that the consensus is that the plan is good?

jayhawklawrence 7 years, 3 months ago

I think Joshua Montgomery is a great entrepreneur. He has figured out how to use other people's money. The problem I have is that he is using this Kid's freenet as a way to get his foot in the door while selling his for profit services. I think it smacks of false advertising and confuses the people in Lawrence,

It is a BAD idea to fund a competitor to an existing business with tax payer funds. This was the main problem with the Eagle Bend debacle which is still losing money today. Why do we keep having to relearn the same hard lessons.

The Journal World internet business is a great business that pays taxes that help us fund our precious city services. They have competitors, all of whom, play by the same rules of the market. It is not fair for Freenet (Scamnet) to try to paint them as unethical.

I am only a customer of LJW. I don't work for them. But I know how market forces work and this Freenet is trying to violate the natural forces at work in our market. The result can only be less revenue and fewer services for all of us. We need to attract productive companies not companies looking for hand outs.

Godot 7 years, 3 months ago

TIF for Fritzels: BAD

TIF for anything in Lawrence: BAD

StephenColt 7 years, 3 months ago


Also you may want to investigate how they are putting Lawrence on the map as ahead of the game when it comes to wireless access in a city.


It's funny you mention this. The Lawrence Freenet project is one of the most successful City WiFi projects to date, it's a shame that the LJW hasn't told anyone about this. Not only is the technology on the cutting edge, but from what I've read they've got better coverage and for less money than anyone else.

jayhawklawrence 7 years, 3 months ago

I want to have an open mind, but you cannot screw up the market for existing businesses using Taxpayer funds.

These local businesses pay for our city services. Without them the only alternative is to raise taxes. Ouch again.

Cutting edge is a relative term. I have read of problems across the country with the free internet concept. I think this needs a lot more study and from what I see, it is not good for Lawrence.

jayhawklawrence 7 years, 3 months ago

FYI:

I can get free internet at a lot of places around town. Einstein Bagle for instance. Go have a bagle and use the internet. That is good business for everyone.

lccaf 7 years, 3 months ago

First off, they are still 24 people short of even giving free service to 10% of their users. Second for a company that has been in business since April of 2005, how can they still not be rated well enough to get good loan rates? Fourth in line guarantor? LFN is a nonprofit that obviously needs money, so write them off as a realistic guarantor. If CWC has enough money and revenue to be a viable guarantor why don't they just make a low interest loan to LFN themselves. I would like to see Joshua Montgomery's tax returns and portfolio before I believe he has the ability to bail the city out of a loan of this size. Ultimately they are an almost 3 year old company that still only has 1144 uses. How is this a sound business investment for anyone let alone the City?

BigPrune 7 years, 3 months ago

How many children live in Lawrence? If it wasn't for the virtual school, the school district's enrollment numbers would show a decrease in students.

Baille 7 years, 3 months ago

Criminy people. At least take the time to go to the commission website and read the proposal. Or better start attending the commission meetings. The proposal is to develop infrastructure for the benefit if the city as a whole. It is not an investment in the business itself. It also doesn't put forth a model that will compete with Sunflower.

Ralph Reed 7 years, 3 months ago

StephenColt (Anonymous) writes: "I find it ironic that none of the questions raised by the plan are really about the plan itself, rather in the execution of the plan. Does this mean that the consensus is that the plan is good?"


Maybe not ironic, but it is interesting. But, putting the shoe on the other foot, do we have access to the World Company business plan? Unless the intended service is a public utility, then we shouldn't have unfettered access to their business plan.


jayhawklawrence (Anonymous) writes: "FYI: I can get free internet at a lot of places around town. Einstein Bagle for instance. Go have a bagle and use the internet. That is good business for everyone."


This is true. In fact you can even access the Aimee's Coffeehouse wireless internet from across the street at Einstein's. However, both of those businesses pay for the access they provide. It's free to you, but it's not free to the business providing the free access.


"I want to have an open mind, but you cannot screw up the market for existing businesses using Taxpayer funds."


Jayhawk, you're making the assumption up front that Freenet will fail, so your assertion is really unfounded. Besides taxpayer funds are not being used. The loan is not from the City, the City is simply being asked to cosign so Freenet will save some interest. They've got the loan, they just want to cut their interest rate. What's wrong with that.?


(Why are there only two posters to this blog who are NOT anonymous? Must be that pesky accountability issue again.)


I'm me. Who are you behind you hood of anonymity?

Don Zimmer 7 years, 3 months ago

Why do they not go to Venture Capitalists for their money?

With such funding readily available for anthing with "Wireless or Internet" in their name five million is a drop in the bucket for these guys.

The city should not guarentee any money for a business that competes with existing businesses that pay their budget.

The rewards and risks are for Venture Capitalists and investors, which their are pllenty of.

At least they are getting free publicity and should attract more customers who are anti Sunflower customers.

blakus 7 years, 3 months ago

Ah, World Comp., how I love your veiled attempt to seem impartial. It is not what you report that is important, but rather, what you fail to report. What Freenet brings threatens Sunflower for two reasons (in my opinion), no bandwith cap and better, more comprehensive services. Being a previous Sunflower customer, I was horrified by the constant traffic jam that I experienced while using their services. Freenet is a completely different system when compared to Sunflower and I believe this is seen as a problem to World Comp. It would infringe on their wireless hotspots that are inplace in businesses and Freenet's infrastructure would allow faster access. The technology that a company employs and maintains is just as important as its business practices (money.) What Freenet brings to the table is interesting; improved infrastructure (fiber optic cable is the future for info. tech.) free services for low income families, children, and city employees (not to mention refurbished computers for those who can't afford them), and city-wide wireless access!!! Being the fourth guarantor on a loan that would allow Freenet to keep costs down and therefor keep price down does not seem that awful. Call me crazy for believing that bringing open access for some and improving information availability= democracy is a good thing.

jayhawklawrence 7 years, 3 months ago

RalphReed:

I appreciate yours and everyone's comments. Gee, if only congress could discuss issues sometimes...

I am only applying simple MacroEconomic principles that I believe have allowed us to have the greatest economy in the world. When AT&T tries to change these principles for there own benefit, it hurts all of us in the long run so these principles of the "invisible hand of the market" work for all of us. I am only assuming that there exists certain free market forces and when tax payer funds help create a new competitor in the market where there is an existing business environment with existing businesses servicing market needs, you upset that balance and you end up with less services and greater cost.

Hey, I have liberal tendencies also. I cannot stand Conservative Republican BS and I like our Lawrence openmindedness. But we complain all the time about the taxes, etc and then we mess up our own economy because we just don't pay attention to the consequences. This is not my opinion, it is Econ 101.

Look up this issue on the internet. Many cities want to provide free internet access for everyone. Great concept. I have loved it. Why isn't everyone doing it? Because there are problems with this. I just think we need to be very cautious about this being another boondoggle.

Ragingbear 7 years, 3 months ago

This reminds me of what NetZero originally aimed for. They wanted to give free Internet to everyone.

I think it's still too early to set something like this up. What we ultimately are aiming for is a realistic way to run laptops on our cellphones. They are fully capable of doing so, but the cost is astronomical.

Ditch the project. You get free wireless downtown anyways. Wait a few years and it will be a moot point. In 5 years, we are going to look at this as an asinine idea that drained millions and STILL failed to deliver. Meanwhile we will be walking around with cell phone transmitters on our PDA's.

Adrienne Sanders 7 years, 3 months ago

Quote: Now, the company sells service for $19.98 a month, which is at or above the rates charged by for-profit service providers in the city.

It's above rates charged by other providers? Um, what? Would someone like to tell me where I can get decent internet service (not dial up) for under 20 bucks a month?

eliteminds 7 years, 3 months ago

Well since there's all this hoopla over local Internet firms... how about giving some business to another local Internet firm?

If you need web hosting please give our company a try. It's called Elite Minds and the URL is www.eliteminds.com

We're locally owned, don't ask for a dime from the city, and have 24/7 tech support and rates as low as $7.95 a month. Thank you for your support!

Tristan Moody 7 years, 3 months ago

Autie:

So let's set up a fair bidding process. Let Sunflower bid on the same services that FreeNet is offering to the city. I think we have to take all the articles about FreeNet here with a grain of salt, since this paper writing about FreeNet constitutes a conflict of interest. The LJWorld has absolutely nothing to gain by writing something favorable to FreeNet and everything to lose, and writing articles in this manner without stating the benefits they provide to the community, as presented in the rebuttal offered by FreeNet, is journalistically irresponsible and unethical, but such is life when the local media monopoly is a for-profit company. Of course they will protect their interests.

lucky_guess 7 years, 3 months ago

I have had a Freenet account for over a year and I use it at public hotspots without issue. When I talk to the employees there they are friendly supportive and they don't give you the run around. Quite different from my typical Sunflower experiences in the past where one time I had to call, sit on hold for 20 minutes in order for them to explain to me that the mysterious $7 charge on my $40 Internet bill was simply because I didn't have cable TV.

"Now, the company sells service for $19.98 a month, which is at or above the rates charged by for-profit service providers in the city." (from above). I really don't think this is true.

I have followed the Freenet project since nearly the beginning because I really feel that what is going on in this town (and nearby towns) with the World Company is getting out of control. Also, I've read the Freenet literature, I've been to a city council meeting or two, and I really think these people are fighting a good fight. And I don't think it is out of the question at all to ask the city to C0-SIGN a loan with MULTIPLE OTHERS if it truly benefits the city provides MORE CHOICES for Lawrence residents.

And the World Co. should really be ashamed here. It is very very clear to me that the Journal World is acting as a media outlet for the interests of Sunflower. Do they think that this is not obvious? Do they think we won't catch on, or do they think we just won't care?

Consider this: Until today, the Journal World has printed next to nothing about Freenet and the services they are trying to provide the city. If you search the Journal World for 'Freenet' you just get a bunch of city commission meeting agendas. To get a real story you have to go all the way back to November of 2005.

This makes sense of course, because Sunflower and Freenet are competitors. But the travesty is that the Journal World pretends to be a fair media outlet. It simply is not.

a_flock_of_jayhawks 7 years, 3 months ago

"And what exactly does the franchise fees go to. I'm sent many emails and never received an answer."

Ask the city. They are the ones who require the franchise fee.

ivan 7 years, 3 months ago

I like the idea of FreeNet and competition. But when I got to their actually website it took two minutes just to load their rates page, same amount of time for the signup page. Not a good sign.

lucky_guess 7 years, 3 months ago

Bottom line.

To provide an alternative to Sunflower you need to provide competitive services.

To provide competitive services you need a competitive network.

To build a competitive network, you need money. Lots of money. Fiber is not cheap. Wireless mesh radios are not cheap. Network administrators are not cheap. Technician crews, utility trucks, call centers, all cost a lot of money.

But it is what you Must Have if you want an alternative to Sunflower thats worth a darn.

What Freenet is asking from the city is not a big deal. It seems pretty logical considering the city stands to benefit quite a bit.

Maybe Sunflower is worried about losing the city's business. Maybe they are worried about losing more residential business if their service suddenly becomes inferior to Freenet's due to the planned network improvements (a fiber ring would really be awesome).

In any event, it appears to me that Sunflower whined to the World Co. who ordered the Journal World to put out some negative pub.

The chokehold that the World Co. has on media in this town is really, really beginning to irritate me. And I really, really hope that Freenet can get a foothold in the market. I agree with their direction and apparent goals far more than that of World Co.

OnlyTheOne 7 years, 3 months ago

"I am not at all comfortable co-signing a loan," Mayor Sue Hack said." But it was okay to give Deciphera a million. Oh yes, I'm leerie of this "loan" also.

Danielle Brunin 7 years, 3 months ago

I'm sorry, but I had terrible service with Freenet. I had a charge on my credit in June from February because they forgot to bill me for it. They didn't bother to let me know and I had to dispute the charge with my credit card company because I could never get ahold of anyone for help. Their service is slow and cuts out, and it takes them a long time to remedy the problems (2+ days). I wanted to like Freenet, I really did, but when you have to use the internet for school or work, it is absolutely imperative that you have reliable internet and I've never had a connection problem with Sunflower. At this point, I think Freenet is too unstable and this is too big of a monetary gamble.

Baille 7 years, 3 months ago

The proposal has little to do with the wireless technologies that Freenet has developed. It is primarily concerned with infrastructure - high tech cable.

Baille 7 years, 3 months ago

There is an 83 page proposal on the City Commission's website. Skip the fluff and the story of Freenet's success and go to page 19 to see what they really propose. Whether or not you agree with the financing, the proposal itself is interesting.

http://www.lawrenceks.org/web_based_agendas/2008/01-29-08/01-29-08h/lawrence_freenet_kids_proposal.pdf

zbarf 7 years, 3 months ago

Freenet is trying to take advantage of bleeding heart liberals is Lawrence to promote a front company. The real company is behind the scene and yes there is a profit motive.

Nothing is free...somebody has to pay and this is just another social program to distribute wealth. Better bet would be to tell poor kids in school to ask their moms to put the cigarette money towards the same internet access we all pay for.

I have heard this guy (Joshua Montgomery) speak and he is a jerk. Don't support this plan!

PS. You ask my how I know he is a liberal....he invented the FOX Blocker!

been_there 7 years, 3 months ago

I tried to get Freenet a few months ago but they have no service in North Lawrence, couldn't believe it Once again North Lawrence gets ignored. I quess people in North Lawrence have too much money to need such a service. Look at their coverage map and you will see that the older low income areas are not covered, totally contradicting what they say they are about.

been_there 7 years, 3 months ago

Looks to me like they are targeting students, why don't they ask KU for money?

pace 7 years, 3 months ago

Hack feels free to speak dis about cosigning for a business that could really help Lawrence. She just won't discuss her own deals that involve giving money to compnany that she had invested in. Hack should resign. We are tired of asking her the questions about her "special" deal and getting a wounded look. she should of stood up and communicated with the people who elected her, she should of answered right away.

monkeyhawk 7 years, 3 months ago

Has it occurred to anyone that this may merely be a ploy by "free"net to be gobbled up by a "Goliath" company? They must be somewhat clever to get this thing off the ground to begin with, so why not come up with some outlandish, unprecedented partnership proposal with the city. If they are denied, at least G company is taking notice

Perhaps the city should consider signing the note, if they are guaranteed say, 25% of the sale price when "free"net is taken over.

Ralph Reed 7 years, 3 months ago

Baille (Anonymous) writes: "There is an 83 page proposal on the City Commission's website ... go to page 19 to see what they really propose. Whether or not you agree with the financing, the proposal itself is interesting."


I agree, the proposal is interesting and deserves further consideration. I think that's why they CC sent it back to City Hall.


What I don't understand is how people got the idea, and others jumped on the band wagon, that Freenet is asking the City for a loan. That's not what the proposal is. Go read it.


I'm me. Who are you behind your hood of anonymity?

Godot 7 years, 3 months ago

When, not if, Freenet defaults on this loan, the co-signors will be responsible for paying it back. The city in Lawrence will be fourth in line to pay it off - the three entities who would be responsible for the loan before the city are just different names for one person: Joshua Montgomery.

As I posted on another thread, this reminds me of:

"Dad, I am not asking you to buy me a car. Really. All you have to do is co-sign the loan. I'll make the payments, on time, I promise. There is nothing to worry about."

been_there 7 years, 3 months ago

So if the city taxpayers would end up paying for it, would the 5% of Lawrence that will not have access to their system be exempt from having to pay for it

been_there 7 years, 3 months ago

Wait, if they are promising that every child under 18 would have free internet access, what if they lived in that 5% area? Would they have to go somewhere else to use their free access? They never said they would have it in their home. How tricky.

compmd 7 years, 3 months ago

Well, its easy for people to attack things they don't understand when they are being inundated with negative information from a monopolistic news agency. Its also easy considering how most people can barely grasp how a credit card works; I don't expect most people to have a clue about business finances.

I was at the meeting this evening, and Simons and Knorr were in full form. Simons went off about the 700 "Gigahertz" auction (its "megahertz" actually) and withheld the actual costs of implementing 700MHz infrastructure. Knorr stood up and talked about how "we wanted to do these things first, so let's bid on them!"

There have been disappointingly few people here who have taken the time to actually read the proposal to the city and simply drink that LJW's Koolaid and then spew vitriol on these boards. Monkeyhawk, keep drinking the Koolaid. You have made a conscious decision to not educate yourself on this matter, when other posters have provided everything necessary. Your baseless invective has added nothing of any substance this discussion. Baille, Ralph, Marion, good posts. Glad to see some people get it.

Godot 7 years, 3 months ago

Monkeyhawk is straight on right about this issue. This business has already taken advantage of "not for profit" status, and its originators used their relationships with the commission of 2005 to gain an unbelievable gift of a $10 annual lease from the city to mount their equipment; even then, it failed; now, after reinventing itself and getting private, for-profit funding, it is still on the edge, and it comes to the city with this surreal notion of having the city "co-sign" a note in exchange for unverifiable, unvalued concessions to the city.

How does one value a barter between a city, a not-for-profit, a for-profit and the taxpayers who will eventually be forced to ante up the tab?

There is trouble in river city and it begins with "free"

unite2revolt 7 years, 3 months ago

Did anyone else notice that World company now owns TV Channel 49 in Topeka too?

compmd 7 years, 3 months ago

Godot, I'm curious why you feel the way you do about this.

"Unvalued concessions?" If you are referring to the benefits to the city that were outlined (such as police department bandwidth, Internet access for city employees, fiber to traffic lights) then maybe you should rethink that statement. Simons and Knorr seemed to place great value in those things and said this evening that they would want to bid on those projects. Commissioner Dever seemed to think very highly of those projects and even suggested that Sunflower and Lawrence Freenet partner on a project.

"How does one value a barter between a city, a not-for-profit, a for-profit and the taxpayers who will eventually be forced to ante up the tab?"

Community Wireless and Lawrence Freenet, both of which started together as a bunch of geeks in a garage with a Winnebago, has grown to a large office building with several vehicles, numerous employees, and one of the most successful city-scale wireless mesh Internet providers in the United States that continues to grow. You assume that:

1) The businesses will fail, which based upon my prior paragraph doesn't fit with the trend. 2) Everyone else guaranteeing the loan will default. 3) Everyone involved in this process must not know what they are getting themselves into.

Does that really seem reasonable?

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