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Archive for Thursday, February 26, 2009

Lawrence Freenet seeks county help with rural Web plan

February 26, 2009

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A proposal to provide wireless Internet service to 180 households in southwestern Douglas County was presented Wednesday to Douglas County commissioners.

County leaders were asked to sign a loan guarantee so Lawrence Freenet would have a better chance to obtain a $150,600 loan for what was called a pilot project.

“There would be no cost to the taxpayers,” Lawrence Freenet founder Joshua Montgomery said.

The establishment of the wireless service would cost $126,000, Montgomery said. The remaining $24,600 would be held by the county in escrow, he said.

The service would cost each household $44.98 per month. Lawrence Freenet hopes to find an existing tower for the service, Montgomery said.

Commissioners Charles Jones, Nancy Thellman and Jim Flory expressed interest in the proposal but made no decision.

Flory said he would like see options explored for tapping into President Barack Obama’s economic stimulus package, which has funds for rural broadband. Jones said he wasn’t sure now was the time to become involved in such a project, considering the current economy.

Commissioners will discuss the issue again on March 11.

In 2008, Montgomery and Freenet unsuccessfully lobbied city commissioners to co-sign a $4.9 million loan to allow the Internet service provider to expand in the city.

Comments

Joshua Montgomery 5 years, 10 months ago

Members of the community interested in learning more about this innovative, revenue neutral project can read the presentation at:

http://www.lawrencefreenet.org/rural

ithink 5 years, 10 months ago

There are several issues here:

(1) FreeNet is not free. Pulling up their web site advertises starting plans at $22.98 per month.

(2) With FreeNet putting up wireless access points all across Lawrence, they have denied many other users from accessing and using wireless technology.

(3) There are other providers of rural, wireless, internet access in the area. FreeNet is not the only one and should not be given preferential treatment.

RoeDapple 5 years, 10 months ago

“There would be no cost to the taxpayers,” Lawrence Freenet founder Joshua Montgomery said.

"The service would cost each household $44.98 per month."

Lawrence "Freenet", only $44.98 per month!!! But wait, there's more! Sign up in the next 30 seconds and we'll double the offer! Yes, folks, you heard it right! For $89.96 we'll hook up a second TV, and throw in a plastic food slicer, worth $79.95! You won't find this offer in any store, not even Wal-mart! So call now, before it's too late to the number at the bottom of your screen!

(Please include $29.95 S&H charges for each unit, limit 50 units per shipping address, installation not included)

1-900-UBINHAD

Pay no attention to this fictitious post. This is not a real offer.<

Kind of like, "no cost to taxpayers, just $44.98 per month"

somebodynew 5 years, 10 months ago

I may be wrong here, but why does a company like this always need a government entity to "co-sign" on a loan???? If they have been in business and reasonably sucessful, they shouldn't need a co-signer.

" There would be no cost to the taxpayers,” Yeah, until they don't pay the loan back, then we get stuck with it. No thanks.

monkeyhawk 5 years, 10 months ago

Here he is, back at the trough again.

"The company has promoted itself as a not-for-profit company with a goal of providing free Internet access to everyone in Lawrence.

But company leaders recently conceded that the majority of all the revenue that the not-for-profit receives goes directly to a for-profit company that is partially owned and led by Freenet's founder, Joshua Montgomery."

"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."

fairplay 5 years, 10 months ago

I have to defend Josh before I point out the flaws.

No cost to the taxpayer does not include customers. It's pretty clear that the taxpayer will not suffer a mandatory charge. Should they want to purchase internet they will have the option...at a cost.

The flaw is that if Montgomery's plan doesn't work, THEN it WILL cost the taxpayer. This is MUCH different than Richard's "corporate welfare" which offers tax incentives to potential organizations. What Montgomery is asking for is a co-signer. The reason he's doing this is because the County has a better credit rating than he does. Freenet was started on credit cards. Guess what is a bad business plan???? Credit card financing. It's the same reason he asked the City to guarantee his $5 million loan a while back. Incidentally, he claimed at that time that regardless of the City's commitment to his loan, the fiber-optic infrastructure that he was proposing would be completed. Haven't seen it.

Roe, I think you are on the money in assuming that this is just like a bad TV "too good to be true" product. This is the Magical Montgomery info-elixir, guaranteed to cure what ails you.

To the county commissioners, ask yourselves why this businessman has to ask the municipal government for a co-signer on his business loan. Pull his credit report and find out why the lending institutions aren't willing to offer him a loan at a reasonable rate?

Halfjagged 5 years, 10 months ago

Freenet doesn't work in town half the time. Why would it work in the country! Freenet needs to go away.

cowboy 5 years, 10 months ago

Freenet seems a bit flaky on the operations side while pretty innovative in just how they have gotten off the ground. As a freenet customer I am happy with the service which is sometimes great , sometimes poor , but at 20 bucks a month you can't be too demanding. Biggest plus is their low cost , biggest minus is their acceptance of less than excellent service.

hipper_than_hip 5 years, 10 months ago

I pay $49.95/month for Canopy, and it's faster than my broadband at work.

OldEnuf2BYurDad 5 years, 10 months ago

Freenet needs co-signers for the same reason why individuals sometimes need co-signers: they are a credit risk. Their books are a shambles. They sometimes miss payroll. They have a history of throwing money in strange places. Look in their parking lot. They spent money on a reserved parking space for "Bill Lumberg". Bill Lumberg is the creepy boss in "Office Space". Why would a businessman spend money on something like that?

The best thing that could happen would be if Freenet sold itself to someone with some business acumen for $1 so the concept could survive. County-wide wireless would be great. We need someone better than the Freenet folks to pull it off.

c_dubya 5 years, 10 months ago

kind of like 'free credit report . com'

Free = $14.95/month.

Godot 5 years, 10 months ago

Freenet needs the county to co-sign for them because no bank would consider lending them the money.

The taxpayers stand to lose $150,600 on this deal. This is a ridiculous proposition in good times, let alone during a severe recession.

Flap Doodle 5 years, 10 months ago

I see Thready McThreadjack is up & around this morning.

beawolf 5 years, 10 months ago

I take it there is no cellular service in that area?

Chris Ogle 5 years, 10 months ago

beobachter (Anonymous) says… If freenet can't get funding for their business model, then maybe their business model is flawed


Darn-it beo: I wanted to complicate this one.

Chris Ogle 5 years, 10 months ago

Just imagine... MT/freenet cruising with LJW posters... Wonder if it would be half full, or half empty.... No, forget that idea... Bozo and Tom..... nope

RoeDapple 5 years, 10 months ago

Fast internet services can be received by satellite receiver dish without guarantees by the county

Budgets_Smudgets 5 years, 10 months ago

Sunflower Broadband receives a significant intangible subsidy through the granting of property interests to them (easements) for their services. And Sunflower has never complied with the services which they promised to give the school and city under the current franchise agreement.

I see absolutely nothing wrong with using the County's credit worthiness to help a small business providing such services, especially to the rural underserved part of the county.

In a number of smaller municipalities, the creation of cable services and internet services would not exist but for ownership by the local governments. In the same way that electricity, phone and cable services are all provided in cooperation with local governments through a variety of arrangements, I see no reason to exclude internet services from such arrangements. Indeed, it should be encouraged.

workinghard 5 years, 10 months ago

Isn't the DSL through ATT cheaper? They do not even require you to have a landline anymore, at least in town. But if they do have a landline then they can get internet at half the cost of Freenet. Until I see it available in North Lawrence and old East Lawrence they do not get my support.

otto 5 years, 10 months ago

Sunflower needs to canopy the west side of the lake - not available at my house. Had to spend $25.00 for them to say sorry. There is a lot of people I know that would sign up today.

Joshua Montgomery 5 years, 10 months ago

I just thought I'd throw a few facts in to counter some of the untrue statements made by some of the frequent posters:

  1. Freenet is 100% free to low income families. Its last quarterly report shows it is serving 104 locations with free service. Some of these locations serve multiple households such as the entire Habitat for Humanity Neighborhood, the O'Connell Youth ranch and over 125 households at the Lawrence Housing Authority site.

  2. Rather than spend grants, gifts and donations on this service, the organization pays for its operations by providing paid service to people who choose to use it.

  3. The organization has never received a single penny in taxpayer grants or donations.

  4. The organizations's books are in order and the company has invited city staff to review its operations at any time. It has also made repeated written requests for the City of Lawrence to assign a staff member to observe its board meetings.

  5. The reason no one provides rural service in the targeted areas is the low return on investment. It is much more profitable to spend these funds wiring up a single apartment complex with fiber-optic cable than to spend the money providing service in a large rural area.

5.a Without government involvement it is unlikely anyone will build broadband coverage in these areas in the near future.

5.b Without government involvement these areas wouldn't have electricity or phone service either.

5.c The relatively high rural rate ($44.98) reflects the increased costs of service calls due to travel time and the increased maintenance required of long distance links.

5.d When compared to other "broadband" services available in these areas, it is still the cheapest option.

  1. Satellite & Cellular service are NOT broadband despite what their marketing departments might tell you.

  2. The Lawrence Freenet Project and its service provider have invested $2,200,000 in Lawrence to date.

  3. The project is structured to cost the taxpayers nothing and has funds attached to pursue stimulus money that might make it possible to cover the entire county.

Last but not least, I'd like to point out that the projected payments on this note are less than the company's current positive cashflow. Meaning the company wouldn't need to add a single household in the target area to cover the costs of the loan.

Chris Ogle 5 years, 10 months ago

joshua_montgomery- Are you related to merrill?

Joshua Montgomery 5 years, 10 months ago

I'm an Engineer. I think in bulleted lists. Don't blame me - Prof. Jan Roskam at KU did it to me.

Joshua Montgomery 5 years, 10 months ago

The local cable utility/newspaper/news channel/computer repair shop/magazine publisher/real estate developer/etc. provides service in the highest density areas of the county. The proposed project is in an area with no current service.

The service provider has private investors who have put up $1.5 Million in cash and another $700K in loans.

Rural utility services wouldn't exist without government help. No electricity, no telephone service.

Our goal as an organization is to bring the Internet to everyone, everywhere, regardless of income. This project is a part of that goal. If you disagree with the goal, that is where you should focus the discussion.

newsreader 5 years, 10 months ago

Joshua can you respond to the claim that you also own a for-profit company that you funnel Lawrence Free-Net profits too?

Does your for profit company receive a management fee or anything from FreeNet?

Susan Mangan 5 years, 10 months ago

I would love to live out in the country, but I (obviously) can't sell my house right now. Every choice requires a cost/benefit analysis. The benefits of living in the country...escaping urban sprawl, no noisy neighbors, beautiful open spaces, etc. The costs...simple...not having access to all of the convenient amenities available in a more populated area. So we should now require everyone, even those of us stuck in the urban sprawl, to guarantee your access to those amenities?? There aren't any 24-hour grocery stores, either, so should we guarantee those, too?

What's the difference between Freenet's request and the bailout loans? In both cases, they don't cost the taxpayer a penny...unless they fail to repay the loans. And, just like GM and Chrysler, they weren't credit-worthy enough to get the loan on their own, apparently. I guess now is the time to stick out your hands and ask for taxpayer guarantees, so they've just jumped on the bandwagon. Probably a smart business move, actually...take advantage of the economic climate and screw over the taxpayer.

Joshua Montgomery 5 years, 10 months ago

Broadband is defined by law as a utility service. Not an amenity.

gl0ck0wn3r 5 years, 10 months ago

I love the "hey, the county has already made stupid financial decisions, so what is one more?" arguments. A million here, a million there... Freenet is a private company, why should the govt put its credit on the line? Surely if the service is effective it can find a financial backer to loan it the money privately.

Joshua Montgomery 5 years, 10 months ago

In response to newsreader:

Freenet received $32,040.16 in payments from its members last month.

$26,565.18 was spent with its service provider to pay for the service to its paid members.

$1,691.00 was spent with its service provider to pay for low income families.

$1,073.13 went to the credit card processing companies.

$336.42 was spent on payroll.

The remaining balance ($2,374.42) was spent paying down short term liabilities (accounts payable). The company currently has NET 90 terms with the provider, but would like to have its accounts payable under 30 days.

Susan Mangan 5 years, 10 months ago

"Utility service" does not mean "necessity". Most utilities are also strictly regulated and public utilities generally need to go through a regulatory board to change their rate schedules. What board regulates Freenet's rates? I'm really not interested in the "legal" definition of broadband. It's a nice unnecessary amenity that the rest of us should not have to subsidize through guarantees. Unlike heat or water, you really don't need it to survive and be happy. Believe it, or not, I even know some people who live happy productive lives without cable. It may be a utility, but you don't have a right to it.

Joshua Montgomery 5 years, 10 months ago

I'd like to point out that the rural members of our community are largely absent from this discussion.

They don't have broadband Internet.

workinghard 5 years, 10 months ago

I know people living in the area that Freenet wants to cover that have internet. It is there if they want it.

newsreader 5 years, 10 months ago

Joshua;

I appreciate you being active on this board to answer our questions, but you didn't really answer mine. FreeNet paying $25k last month to "its" service providor doesn't mean anything.

Don't you also own that service provider? Why shouldn't I believe that the the service provider you own only payd 5,000 for the 25,000 in services... leaving you a 20k profit from your 'non-profit'

misseve 5 years, 10 months ago

I have Freenet, I PAY for Freenet and yes it isnt GREAT however it isnt Sunflower and the majority it works for my laptop I have little to complain about. I hope he gets the backing he needs and the folks griping would just get over it already.

Joshua Montgomery 5 years, 10 months ago

newsreader -

If the local broadband provider and newspaper were separate entities or the public had a financial stake in the business, I would answer that question, but suffice it to say that if I wanted to I would qualify for food assistance this year.

No one is getting rich off this project. I assure you.

OldEnuf2BYurDad 5 years, 10 months ago

"$336.42 was spent on payroll"

This doesn't add up. You have several employees. Come on, man.

I worked in lending. If you can demonstrate on paper that you can pay the note each month even just from your existing cash flow (without a single rural client), then a bank would be foolish to deny that loan. I'm sorry, but there is more to this than Josh is revealing to us on this forum.

-

"FreeNet paying $25k last month to “its” service providor doesn't mean anything. Don't you also own that service provider?"

Yeah, it's the smoke and mirrors of "Community Wireless" and "Freenet" being separate entities (run by the same family, in the same office space).

c_dubya 5 years, 10 months ago

Well, service provider probably = Internet service. Freenet does not own the data lines that all those WiFi users link into, it has to buy bulk bandwidth from someone. Maybe AT&T or Sprint? That's probably the service provider Joshua is referring to, but I'm just guessing.

Joshua Montgomery 5 years, 10 months ago

The organization project works to provide the service we promised to provide to low income families.

If you have a better idea as to how to build out Universal Internet service without grants from the taxpayers, I eagerly await your input.

We gave a lot of thought to the arrangement we developed and the only folks who seem to have a problem with it are at the World Company, either in the broadband or "news" division.

Bob Forer 5 years, 10 months ago

The company has promoted itself as a not-for-profit company with a goal of providing free Internet access to everyone in Lawrence.

But company leaders recently conceded that the majority of all the revenue that the not-for-profit receives goes directly to a for-profit company that is partially owned and led by Freenet's founder, Joshua Montgomery.”


Thanks for the infor, moneky. Was not aware of the for=profit connnection. Sounds like Josh is trying to line his pockets under the guise of community help.

While I may have been favorably inclined to freenet previously, my eyes are now a little open, so Josh, get your hands out of my pocket and go *&^% yourself.

John Hamm 5 years, 10 months ago

Bowhunter99. No, actually Umbrella is $49.95 a month but with no taxes or surcharges and a pretty decent service.

Joshua Montgomery 5 years, 10 months ago

Wow, what the World Company says is the Truth, the Whole Truth and Nothing But the Truth. They have no reason to make us look bad in the paper.

The day we shut our doors the World Company adds $75,000/Mo to its bottom line. That is no reason to write a slanted, one sided article about us.

If we are back to this discussion, I'd refer you to our official response to the original hack job: http://kids.lawrencefreenet.org

Bob Forer 5 years, 10 months ago

I hate to say this, but Marion is right. Its a scam--perfectly legal, but nonethless, a scam. Under the guise of providing service to a hundred of so low-income families, Montgomery and company are manipulating and lying to the public while they build a big corporatoin with other peoples money

I don't hear rural folks joining in unison with Freenet. Why not? Because internet services are already avaiable, and for much less. Try ATT DSL for 25/month. No its not btoadband, but its pretty damn close.

Bob Forer 5 years, 10 months ago

Excuse me Josh, but you claimed to link us to a presentation, which I assumed would be a well thought out and congent written policy statement. Instead, I wasted my time view a nine piece slide show.

A fricking slide show? And no audio. You can't leave town soon enough, you shyster.

lotsofgunsforaliberal 5 years, 10 months ago

Hey Joshua, maybe if you spent LESS money on all these guns you and your friends are playing with in these you tube videos you could spend some on your GREAT IDEA.

I especially like the the sks with the 30 round clip that you are givin hell to.Those poor trees. http://www.youtube.com/watch?v=OxsKHLCA0fc&feature=channel_page

this GLOCK is nice too.

http://www.youtube.com/watch?v=1Vi0_6ho_8Q&feature=channel_page

Hey when you get your loan approved from the city I would like to gun shooting with ya.

Just how much did it cost to blow off 30 fricking rounds in a couple seconds?

compmd 5 years, 10 months ago

If I didn't know any better, I'd say Sunflower was astroturfing on this board.

I'm amazed at the technological ignorance of so many. Some say "get satellite service" yet ignore the bandwidth caps. Others say "get DSL" and ignore the fact that DSL is not an option for rural customers. Still others say "what about cell service" which at its fastest, is slower than Sunflower or Freenet. Freenet's method of having a service provider is not uncommon, look at DSL providers. If you see a DSL provider that isn't a phone company, its the exact same setup. DSL providers pay the phone companies to use their lines and to put DSLAMs on phone company switches. Without this arrangement, the only DSL providers would be phone companies.

And where do you think KU gets its Internet connection? KanREN, a non-profit. And where does KanREN get its connections? SBIS, GPN, AT&T, SBC, and COX, for-profit providers. How much money do you think KanREN gives them?

Many people here are taking adversarial stances on a topic they aren't qualified to. How many of you run ISPs, or are RF engineers, or network administrators? Anyone?

I'm curious how many of you who are ashamed of Kansas being laughed at as backwards are also for stifling technological progress which would set Douglas County ahead of everywhere else in the state, and ahead of just about everywhere else in the country when it comes to wifi Internet.

Co-sign his loan, give the people of Douglas County something useful, and something Kansas can be proud of.

Flap Doodle 5 years, 10 months ago

marioni, you been uptown wearing your black hat recently?

compmd 5 years, 10 months ago

What research is that Marion? And who says you are a competent authority to make such conclusions as "existing service providors will do a much better and more reliable job of all this than Freenet could ever hope to do"? Please, share how you know this.

KsTwister 5 years, 10 months ago

Let them fail. They are not helping. Sorry I advised different families to look into it in the past for their students. Do not send my tax money that way, I know better. Too few to amount to a hill of beans right now get it.

monkeyhawk 5 years, 10 months ago

"I'm curious how many of you who are ashamed of Kansas being laughed at as backwards are also for stifling technological progress which would set Douglas County ahead of everywhere else in the state, and ahead of just about everywhere else in the country when it comes to wifi Internet."

Who really cares about Kansas being laughed at? Does that equate to guaranteeing a loan for a private, not-so-much-for-non-profit business?

"But company leaders recently conceded that the majority of all the revenue that the not-for-profit receives goes directly to a for-profit company that is partially owned and led by Freenet's founder, Joshua Montgomery.”

You do make a good point, though. Sunflower had incredible technology long before most other parts of the country. I would imagine if there was a demand for country WIFI, Sunflower would have funded it themselves, without looking to the taxpaying citizens of the entire county to back a very small loan because they were not credit worthy.

The effect of those who are not credit worthy obtaining credit is causing a small problem in our economy at the present time, if you haven't noticed.

rocketmom67 5 years, 10 months ago

I am writing this using my Freenet connection which I pay for. I am not up to speed on the supposed controversy involving Josh or Freenet but I can share my experience which keeps me loyal to Freenet, even though I wish it were faster. When I call Freenet I know that I get to talk to someone over on 6th street. When I tell them where I live, they know right where that is. I appreciate that. I appreciate that Sunflower has some sort of competition. My townhouse is not wired appropriately for Sunflower digital services, including internet. They started updating it in November but they have yet to visit my unit. I don't have cable or a landline so end up paying extra for AT&T or Sunflower--if I could get it. I recently thought I wanted to switch to AT&T for the speed NOT customer service and when it did not work I ended up talking to a tech in India who went through a list of questions on his computer and said someone would call me. No one ever called me. When I call Freenet--they call back. I also really appreciate their committment to helping youth--at least my youth. My son had the opportunity to do an internship with Josh last summer. It was an amazing opportunity and he loved it. We have also wandered into the Freenet office on a few occassions when my son has electronic or computer questions and someone ALWAYS takes the time to help him for free. He went to a local computer store to ask for help and they said it would cost $25 for a diagnostic. He went to talk to Josh and got the problem taken care of. I have complained about the reliability of the signal and guess what? It improved! I do not have those issues any more. I do wish it were faster but I remain loyal because I appreciate what Freenet is trying to do by offering choice and access for low income families. I also really appreciate Josh and the Freenet staff taking the time to work with my son. I think the co-signing should be approve so that rural residents also have a choice in internet providers.

tcs 5 years, 10 months ago

Josh and Freenet have a histoy of lying to the city commision to get what they want. When they got the city to allow them to put their equipment on city property, for next to nothing, internet service was supposed to be free to EVERYONE. Shortly after getting the city's approval they set up their for profit company and started charging for service.

lotsofgunsforaliberal 5 years, 10 months ago

tcs (Anonymous) says…

Josh and Freenet have a histoy of lying to the city commision to get what they want. When they got the city to allow them to put their equipment on city property, for next to nothing, internet service was supposed to be free to everyone. Shortly after getting the city's approval they set up their for profit company and started charging for service.


If this is true this CROOKED SHYSTER should not get a red cent!

lotsofgunsforaliberal 5 years, 10 months ago

Below is a DIRECT quote from this article http://www2.ljworld.com/news/2005/aug... and you mean to tell me this is all BS now? WOW what a crook!!! If anybody gives this guy a dime they are out of their mind.

" To access the Freenet service, which won't be available to businesses, residents will be required to buy from the company a $150 box that will be attached to the side of their homes to receive the wireless signal. Company leaders say that one-time, $150 charge is the only fee users would have to pay.

But Montgomery said for the group to survive, it will need to receive donations from users who can afford to pay for the service. But Montgomery said the company will send no monthly bills and will not disconnect anyone for a failure to pay. Users won't have to meet an income test to apply."

gl0ck0wn3r 5 years, 10 months ago

"compmd (Anonymous) says… Many people here are taking adversarial stances on a topic they aren't qualified to. How many of you run ISPs, or are RF engineers, or network administrators? Anyone?

I'm curious how many of you who are ashamed of Kansas being laughed at as backwards are also for stifling technological progress which would set Douglas County ahead of everywhere else in the state, and ahead of just about everywhere else in the country when it comes to wifi Internet."

First: Why must one be an engineer to understand and have an opinion on the topic? The choice seems rather simple and not an engineering or networking problem. Rather, it's a state vs. private industry problem. However, just in case you were wondering, I don't think the state should get involved in this and I have run large enterprise networks... before I grew up and decided I could spend my time doing something more interesting. Happy?

Second, who cares about competing with the rest of the nation by providing "free wifi" to citizens? Why should the citizens of Douglas County - who are laughed at all the time - care if the nation laughs? This is a failed business model.

Matthew Del Vecchio 5 years, 10 months ago

Looks like Community Wireless/Freenet/IMPAC is on the consent agenda tomorrow to gain free access to the public right away around 23rd and Harper.

lotsofgunsforaliberal 5 years, 9 months ago

Marion (Marion Lynn) says…

Hmmmm…….seems this bailout request was removed from the agenda.

Whatup?

YEA waz up wit dat???

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