Archive for Wednesday, January 30, 2008

City: Freenet loan support is unlikely

January 30, 2008

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City leaders balk at Freenet loan

City commissioners like the idea of making the Internet more available to Lawrence youth, but they're skeptical of a plan to expand access. Enlarge video

City commissioners like the idea of making the Internet more available to Lawrence youth, but a majority said it was unlikely they would enter a unique financial partnership with Lawrence Freenet to do so.

"I think there is a lot of risk there," Commissioner Rob Chestnut said of a proposal by Freenet that would require the city to financially guarantee a $4.9 million private loan for the nonprofit Internet company.

In exchange for the financial backing, Freenet leaders said the company would start a new program to provide free, wireless Internet service to every Lawrence child under 18.

But Mayor Sue Hack, Commissioner Mike Amyx and Chestnut said the loan guarantee represented too big of a risk for city government to take. They also said they had questions about whether the project would be unfair to for-profit Internet providers in the community - such as Sunflower Broadband, which is owned by The World Company, which also publishes the Journal-World.

Instead, commissioners said they wanted leaders of Sunflower Broadband, Freenet and city staff members to meet on ways that Internet access could be more available to Lawrence students, low income families and others who have difficulty accessing the service.

"In a perfect world, I would like for everyone to come together and figure out a way to close that gap for people in Lawrence," Hack said. "It can be a great economic development tool, but more than that it can be a great asset for the entire community."

City Manager David Corliss told commissioners he thought state law likely would prohibit the city from backing a private loan for a business, but said there may be other ways the city could help.

Amyx said he was skeptical of claims that the Freenet proposal would be revenue-neutral for the city and reminded commissioners that the city was facing tough budget times.

"It was only a few months ago that we were talking about reducing expenditures to outside agencies, talking about whether we had money to keep operating the T, and debating whether we could afford to give raises to city employees," Amyx said of last year's budget process.

Commissioners Mike Dever and Boog Highberger expressed the most support for the Freenet plan but stopped short of saying they would fully endorse it. But Highberger said he was open to the idea of spending city money on improving Internet access.

Commissioners heard public support for the plan from leaders of the O'Connell Youth Ranch, Kansas Research and Education Network, and a parents group at Central Junior High School.

Commissioners also heard from leaders of The World Company, who urged city commissioners to treat all Internet service providers in the community equally.

"This really is a question of what is the best use of municipal funds," said Patrick Knorr, chief operating officer for The World Company and general manager for Sunflower Broadband.

Corliss said he would bring back a status report on the issue to commissioners in early March.

Comments

Joshua Montgomery 7 years, 2 months ago

We were all glad to see the project go to staff for review. The resulting proposal will be weighed on its merits.

http://kids.lawrencefreenet.org

compmd 7 years, 2 months ago

Sigmund, I would have expected a more insightful post from you. You ask who in Lawrence has "difficulty accessing" DSL or Sunflower. 19% of Lawrence is below the poverty line, and 10% of children (under 18) are below the poverty line. That's around 16,000 people, people who would have "difficulty accessing" DSL or Sunflower.

Dominic_Sova 7 years, 2 months ago

IF you want this to work, Sue's going to need some options. Some STOCK options that is.

monkeyspunk 7 years, 2 months ago

Amyx has an excellent point. The city is in a serious budget crunch right now. Their "estimations" on tax revenues were woefully optimistic and irresponsible. The county was much more realistic, and is in much better shape "dolla dolla bill" wise. (Kudos to Weinaug)

Josh, I do salute your drive to provide free internet access to children though. And because of it, I will at least look into purchasing internet service from your company. Being an IT professional, I really dislike wireless though!

Eileen Jones 7 years, 2 months ago

Freenet must not have paid off the commissioners well enough. They're talking "ethics" and "risk." My guess is that the commissioners are getting NOTHING.

compmd 7 years, 2 months ago

What the article neglects to mention is that the commissioners asked the city staff to investigate first whether it was legal for the city to guarantee the loan before they agreed (or disagreed) to back the proposal. That is where the proposal stands now; it is necessary to determine if it is legal for the city to guarantee the loan, and if so, how to do it.

newsreader 7 years, 2 months ago

I still don't understand how FreeNet, being open for over 3 years and only 1100 customers actually got a bank to agree to loan then $4 million dollars!

Right now they only make $22,000 a month, how do these numbers work?

LogicMan 7 years, 2 months ago

This should be handled like any other utility service. No free lunch -- it's a for-profit venture that will be competing with existing providers. Let the free-market rein!

Richard Heckler 7 years, 2 months ago

Dicephera,The North Lawrence Project and Oread Inn are far more risky than FreeNet. There is visual demand for the services of FreeNet whereas demand for the other three is based on pure speculation.

If demand for FreeNet services were less than real Sunflower would not be interfering.

compmd 7 years, 2 months ago

LogicMan, three letters: FDR.

There are plenty of utilities that have their roots in government jumpstarts. Mr. Mansfield even spoke of these.

Evan Ridenour 7 years, 2 months ago

Does anyone else see the irony of a company with a monopoly asking the city commission to maintain a level playing field?

Hah!

jhawk0097 7 years, 2 months ago

Freenet should work on their lousy service before trying any pie-in-the-sky projects. I tried them out for a couple of months and I was lucky to get a connection most of the time. Good call by the city IMO.

Ralph Reed 7 years, 2 months ago

Again it seems the majority of posters have the impression that Freenet was asking the City for the loan. This, in fact, is not true. Asking for the City to cosign and asking the City for the loan are two different things.

I think it's good that the City Commission sent the proposal back to City Hall for additional review instead of discarding it outright. That was a good call.

Mike Amyx did raise a couple of valid points: 1. Questioning whether or not it is legal for the City to cosign a loan for a private entity; and 2. Whether or not the City must have the balance of the loan appropriated in order to be able to commit.


Note to those of you whose complain about Freenet. I've heard similar compaints about Sunflower, the broadband services and the dial-up services. I would wager the number of satisfied customers far outweighs the number of dissatisfied customers.


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

valgrlku 7 years, 2 months ago

I'm confused - isn't there a new program available through Sunflower BB that provides internet service for free to those who fall within the income guidelines?

FatTony 7 years, 2 months ago

Can anyone tell me how you can prove that only those under the age of 18 are gaining free access. Thats a joke. Co-sign my loan and I will do something for the kids. B.S. Quit using excuses like its for the kids to promote your agenda, your company, and gain financially. As soon as you offer free access to Kids under 18 is the day that the enitre city of Lawrence has a population aged 18 and under.

Baille 7 years, 2 months ago

Go to http://kids.lawrencefreenet.org/rebuttal_links/rebuttal.html to see the comparison between Freenet and Sunflower.

Go to http://www.lawrenceks.org/web_based_agendas/2008/01-29-08/01-29-08h/lawrence_freenet_kids_proposal.pdf to see the real proposal.

The City of Lawrence would get a high-speed, high-tech fiber ring at no cost. If you went to the commission meeting last night, you would know this proposal is akin to early projects that established electricity and telephone utilities. Access to data in this proposal is being treated like access to water and electricity. It makes sense - even if you disagree on the details of how it should be financed. There are other ways for the city to get this done by utilizing the same profit/non-profit partnership arrangement. Again, if you read the proposal you would know that other places have utilized a similar model to great success.

newsreader 7 years, 2 months ago

Just looking at the finances again, even if they some how get 6600 customers @ $20 a month, thats only making $132,000 a month. How do you expect to pay a nearly $5 million loan with $130k a month, nearly 75% of your revenue will be going to pay a loan???? Where is the rest of the money coming from?

Raider 7 years, 2 months ago

"They also said they had questions about whether the project would be unfair to for-profit Internet providers in the community - such as Sunflower Broadband, which is owned by The World Company, which also publishes the Journal-World.

Instead, commissioners said they wanted leaders of Sunflower Broadband, Freenet and city staff members to meet on ways that Internet access could be more available to Lawrence students, low income families and others who have difficulty accessing the service."

The answers is summed up right here. It sounds like Sunflower / World got their toes stepped on and decided to take action. What action was taken, one can only specualate, but we see the results.

Could you imagine the insanity that would take place if someone like Cox, Time Warner or Everest wanted to come to town?

jayhawklawrence 7 years, 2 months ago

If Lawrence was more busy friendly and business smart we could be a lot more particular about who we partner up with. Sometimes I get the sense that we are just too desparate and not smart.

I think City and State governments often forget the power of good sale personnel. You want to attract good companies? Make a good marketing plan and get great sales people. Sell facts and benefits and stop giving away the farm. Everything starts with sales. It is a simple concept, often unappreciated by bureacracies like government and educational organizations.

Richard Heckler 7 years, 2 months ago

Sunflower's service is not without its' internet problems.

In essence the city is more or less backing some financing for Oread Inn = T.I.F. although it is said to be accompanied by a letter of credit

which raises the question of why not finance the whole Oread Inn project through conventional means? This T.I.F. project steals from the public schools and the library.

That way taxpayers see all revenues going to the community cookie jar as it should be.

FreeNet is willing to give back to the community.

afred 7 years, 2 months ago

I read the articles about Freenet that ran yesterday. I took an hour out of my Tuesday night and went to the city commission meeting.

This article does little to reflect what actually happened. It could just as easily and legitimately be titled: "City Commission Interested in Possibilities Offered by Freenet Proposal".

Instead, it focuses on the rebuttals of Patrick Knorr and Dan Simons (heads at World Co.)

It focuses on commissioner Amyx's cautious disposition, quoting him from the last 30 seconds of an hour long discussion.

It quotes commissioner Chestnut saying "I think there is a lot of risk there," when in fact, he seemed optimistic about finding ways to make the proposal work.

It barely mentions (and does not quote at all) the professional researcher who spoke, the director of the O'Connel Youth Ranch, the representative from Central Junior High, nor any of the Freenet reps.

This article is clearly slanted. And it irritates me.

toefungus 7 years, 2 months ago

Internet service will get cheaper and cheaper. You do not need wires in todays world, thus cost to build, maintain, and upgrade is not nearly as big an issue. In a few years, cell phone companies will have a highly competitive alternative to wires. They are very close now, but soon, it will be priced right and most will use it instead of being tethered to a silly wire.

Ralph Reed 7 years, 2 months ago

afred (Anonymous) writes: "I read the articles about Freenet that ran yesterday. I took an hour out of my Tuesday night and went to the city commission meeting. This article does little to reflect what actually happened. It could just as easily and legitimately be titled: "City Commission Interested in Possibilities Offered by Freenet Proposal"."


I didn't make it to the meeting, but I watched it on TV. I agree with your post afred. Well said.


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

knowuh 7 years, 2 months ago

i was employed by 'Free'net for sometime and was still confused by the 2 companies working under the same tent by the time i was terminated. Lawrence Freenet/ Community Wireless Communications was probably the most ridiculous employer that i've ever had, the story is nearly unbelievable. Either way, CWC makes money, and Freenet pretends to be non-profit, but at the end of the day, they give themselves raises with money they don't have, buying motorcycles and new gizmos with money they aren't earning. I was fired by two of the most incompetent people i've ever met, not including josh, he merely smiled, nodded, and let the monkeys that he hired above me attempt to use words.
The city would be better off keeping millions of dollars in their pockets rather than to throw money at lawrence Really-Expensive-net. Though there are still a handful of people employed by the company that i do respect, i can't respect their aspirations after my experiences.
If they want to compete, they should just come out of the closet actually make a name for themselves like the World company has done, and at some point, they can give away internet to needy families instead of buying flamer motorcycles. Hey freenet, need a consultant? What's the pay?

Don Zimmer 7 years, 2 months ago

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

With such funding readily available for anything 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

Godot 7 years, 2 months ago

for you anti-Sunflower folks, there are competitive alternatives that do not require the City of Lawrence to become a co-signor on a $4.9 million loan Dish Directtv DSL through ATT & Verizon & Sprint Air cards through the above mentioned providers Various dial up ISP's such as NetZero, PeoplePC, etc.

You are not captive to Sunflower just because you live in Lawrence.

Godot 7 years, 2 months ago

With all due respect none2, is the argument about access or speed of download? Are we to the point that the expectation is that the taxpayers will underwrite free access to the highest speed internet?

This is just absurd.

Godot 7 years, 2 months ago

Water is more important to my life than high speed internet. Why do I have to pay for water? Shouldn't it be free?

Sigmund 7 years, 2 months ago

Has anyone bothered to ask why the childrens need free internet? Anyone who has kids knows that they spend at least 95% of their time playing WOW, chatting with friends, and watching youtube. Maybe 5% of the time doing anything approaching "educational" (other than "sex education" obviously).

How many "students, low income families and others who have difficulty accessing the service" already have a computer and a air card are there in Lawrence? Are they giving away free computers as well? And who in Lawrence has "difficulty accessing" DSL or Sunflower Broadband?

If there is a "visual demand for the services of FreeNet" as Merrill claims, then surely they won't have any difficulty convincing lenders. Then when they are profitable they can "give back to the community" by simply providing their service for free to the childrens. Or are they only being so generous when they want the taxpayers to back a very, very risky loan?

compmd 7 years, 2 months ago

"So the river is not the issue, it is motivation to expand their coverage to less affluent neighborhoods."

Really. The entire Alvamar area is a giant hole in the coverage zone. If you live around the 1800 block of Inverness, you're just as far from an access point as someone who lives on the 400 block of Lincoln in North Lawrence. Since there is an access point at Clinton and Inverness, and what appears to be a few customers near the intersection, I can't imagine it would be difficult to provide service to that neighborhood. There's just not a pressing need. Getting a signal across the river is not an easy task, and I can understand why coverage there may be limited or nonexistent.

StephenColt 7 years, 2 months ago

I did some Google research regarding Freenet and North Lawrence and found a piece in the Lawrencian that I'm quoting here...


Freenet currently cannot service North Lawrence, and they are pinning their hopes on the owners of the not-very-tech-oriented Ottawa Grain Elevator for support. The elevator is one of only two vertical vantage points in North Lawrence on which to mount equipment.

The other is the KANU or NPR tower owned by KU, and they've already blown off several Freenet requests.


It appears they're trying to do what they can, but not having much luck. If you're interested in the full article it can be found here.

http://www.lawrencian.com/index.php?option=com_content&task=view&id=383&Itemid=1

compmd 7 years, 1 month ago

none2,

RF communications is not an easy topic to understand.

"How is getting a signal across the river difficult? My cell phone doesn't stop working when I go across the bridge. I know that all the major cell phone companies have coverage in North Lawrence. I assume they are a mix of 1900Mhz & 850Mhz. Likewise, in the old days before I had cable, my rabbit ears did just fine picking up both Kansas City, and Topeka stations as well as the small one they had at KU. So I don't see how the river itself is a barrier."

Of course your cell phone doesn't stop working when you go across the bridge. There are tall towers broadcasting in licensed spectrum strictly for cell phones at very high power, often in the hundreds of watts. Your cell phone transmitter nominal power output is higher than the maximum transmit power of a Freenet access point (600mW vs. 400mW). A cell phone can peak at over 1W. The wireless card in your computer peaks at 30mW transmit power. Also, since wifi signals operate in the 2.4GHz ISM band, there is a considerable amount of noise (from signals from countless other 2.4GHz devices) contributing to a shorter effective signal range. The VHF and UHF signals from TV stations are broadcast below 800MHz, thus having a longer wavelength and even higher transmit power for better range. These stations often broadcast in the tens of thousands of watts. We're talking a power difference of seven orders of magnitude between TV and wifi, and you wonder why the range of wifi is so limited.

To enable the mesh topology to function optimally, there would need to be more than one way to get across the river. A microwave shot to the grain elevator from the KANU antenna sounds good, and a second shot from the downtown antenna tower or from City Hall to the grain elevator for redundancy. That's just what I would do. Have I helped you understand why the river is a barrier?

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