NETWORK NETWORKING

So Goldberg is picking me up in a rented minivan in six hours and we're heading out for the National Summit for Community Wireless Networks in St. Louis, stopping in Columbus to pick up Katie and Robb, two Ohio Community Computing Network Vista volunteers.

Not being a laptopper myself, I probably won't get to blog much from the event even though we'll all be swimming in a sea of bandwidth. But I'll try to borrow a keyboard once or twice, and maybe the four of us can figure how to get some interviews posted.

Stay tuned.

GREAT DEBATES: Well, I missed them both (along with Jim Petro) but the Meet The Bloggers debates between the remaining Democratic candidates for Governor and Attorney General are posted, including the transcript of Strickland vs. Flannery.

Thanks to Gloria Ferris, we now have the Democratic candidates for governor on the record agreeing that Ohio's deregulation of electric rates was "bad for Ohio" (Flannery) and "a huge mistake" (Strickland). Strickland, at greater length:

I think what we’re seeing on the part of the utility companies today is a desire to reap the benefits of deregulation, while at the same time trying to push a kind of re-regulation that is to their benefit. So in other words, they want the best of both worlds. They want to be deregulated when it is to their financial advantage, and they want the guarantee of being able to recoup whatever investments they make in a new generation capacity. They want the State to guarantee that they will in fact not have to face that risk. So I think the situation we have today is intolerable... [W]e need a Governor who will have a strong consumer advocacy position, and make sure that the people who are appointed to the PUCO are people who have a track record of being concerned about the needs of the consumer.

Neither candidate explained exactly how a new governor or his PUCO might go about stuffing the deregulation genie back into its bottle. Nor did Strickland say how he feels about AEP's proposal to make consumers pre-pay to construct a new clean coal plant in Meigs County. Still, it's a good start. Thanks, Gloria.

NOT SO QUICKEN

The Detroit Free Press picked up on Dan Gilbert's Cleveland musings on Friday, without adding much information. But the FP piece also pointed to its own interview the day before with Peter Karmanos, the CEO of Compuware, which is headquartered in downtown Detroit:

Karmanos has been trying to talk Gilbert, the founder of Quicken Loans and Rock Financial (and owner of the Cleveland Cavaliers) into moving his headquarters and 3,500 workers from Livonia and other suburbs to downtown Detroit.

"I've talked his ear off. We only have a few more shots. Dan Gilbert, myself, a few other people whose parents had businesses here, were actually born and raised in Detroit. ...

"So Dan has an affinity for the city that stretches beyond his business instincts. He's one of the last of the Mohicans because that situation doesn't exist much anymore. I would like very much to see them move that company down here.

"Because I think if they did that, as vibrant a place as they are, it would really, really resonate."

Sound familiar?

Livonia is twenty miles west of downtown Detroit -- just a little farther than from Mayfield to Public Square. Quicken Loan's 1,300 non-Livonia workers are all in other northwest Detroit suburbs -- Troy, Farmington Hills and Auburn Hills. So it's as natural for Detroit to speculate about getting Gilbert's headquarters to move downtown there as it was for boosters here to hope, once upon a time, for a Progressive building on Cleveland's skyline.

But Cleveland?

I think Roldo is right -- Gilbert's speculation about moving his whole operation to Cleveland was just a way of yanking some chains in Michigan.

The Jackson administration has been commendably cool about the whole thing. But if I were the mayor, I'd consider making this an opportunity for a friendly public discussion with Detroit's Kwame Kilpatrick about how nearby urban regions might cooperate, rather than compete, to attract and keep firms and jobs in our very similar neighborhoods.

Update 3/30: Steve Goldberg suggests a list of principles they could start with.

CLEVELAND: THE QUICKENING?

Mayor Jackson says he's against communities using tax breaks and other subsidies to raid each other's good jobs.

Does that apply to Livonia, Michigan?

In the glow of yesterday's announcement that Quicken Loans' promised 300-employee mortgage center will go into the M.K. Ferguson Plaza, owner Dan Gilbert threw some steaming red meat on the table:

Cavaliers owner Dan Gilbert is dangling the prospect of Cleveland as a potential site for a new national headquarters for his 3,500-employee Quicken Loans.

In announcing the April 3 opening of a mortgage office with 300 to 350 new $85,000-a-year jobs in Tower City Center, Gilbert on Thursday also said he wants to build a new national headquarters to replace his spread-out operations in Livonia, Mich., a Detroit suburb. The office leases there end in 2009. While that might seem a long time off, if the company is going to build, it needs to get started in the next year or so.

Quicken, for now, is considering moving only to areas where it already has operations, said Gilbert, Quicken's chairman and founder.

"Cleveland, because of the other businesses we have there now, is certainly a place we would look at," Gilbert, who bought Cleveland's NBA franchise for $375 million a year ago, said in a phone interview. "We're always open to talking."

The company is likely to make a decision in three to six months, he said.

However, the challenges of relocating 3,500 employees to a new state would be a factor in any decision, Gilbert said.

A high-priced factor, he didn't need to add. Quicken sought and got almost $5 million in subsidies for just 300 jobs in its new mortgage center:

The Ohio Department of Development is providing a 60 percent Job Creation Tax Credit for a 10-year term, which is valued at up to $4.5 million.

It is also providing a $300,000 Ohio Investment in Training Program grant. Ohio was in competition with Arizona, Nevada and Michigan.

What do you suppose the price tag might be for 3,500 high-tech headquarters jobs at "Forbes Magazine's 13th Best Employer"? But that won't stop our regional economic salivary glands from juicing up over Gilbert's dangling prime cut. After all, he's willing to look at us! He's open to talking!

So what does this story look like in Livonia, where all those happy employees work and pay taxes now? From the Detroit News, Friday, February 24:

Livonia, state woo Quicken Loans

Officials work to save jobs, keep the company's headquarters in the city once its lease is up in 4 years.

LIVONIA -- City and state officials are working to ensure the headquarters of Quicken Loans Inc./Rock Financial, one of the city's largest employers, does not leave the city, or Michigan, once its lease is up in four years.

"We're working very aggressively to keep Quicken here," said Jeff Bryant, Livonia's economic development director. "It's definitely a top priority."

Bryant, Mayor Jack Engebretson and former Mayor Jack Kirksey have had informal meetings with representatives of the company to urge them to stay.

The company confirmed in November it may need a larger headquarters when its 10-year lease at the complex on Victor Parkway, just east of Interstate-275, expires at the end of 2009.

With about 1,700 employees at its headquarters, local businesses would be affected if the company left, Kirksey said.

"Every time there's a closing of a plant or something dramatic happens, you realize you've lost some economic base," he said.

Quicken Loans is in discussions with a local real estate company to possibly purchase 35 acres at 39000 W. Seven Mile, the former site of Technicolor Home Entertainment Services, said Keith Pillow, spokesman for Thomson, SA, the parent company of Technicolor.

Elizabeth Jones, spokeswoman for Rock Financial, declined to comment on specific locations and would not confirm any meetings with government officials.

"We are still quite a ways from making any decisions, so we are not prepared to comment on any particular site that may or may not be under consideration," she said.

The company has 3,500 employees and is one of the fastest-growing companies in Metro Detroit, hiring 200 employees a month. Rock Financial has additional locations in Auburn Hills, Farmington Hills and Troy.

State Sen. Laura Toy, R-Livonia, who met with company representatives this week, said she is looking into possible tax incentives to convince the company to stay in her district, and at least in the state.

"We're trying to see where we could help them out," she said.

In 2000, the Michigan Economic Development Corp. gave the company a $6.1 million state tax credit over seven years after it revealed plans to expand and possibly move to Virginia.

The city kicked in its own 50 percent tax abatement over three years, amounting to a break of just less than $40,000, said Bryant.

(Notice that the headquarters Quicken needs to replace has 1,700 employees -- 3,500 is the company's total Michigan workforce. But the bigger number is the one Gilbert "dangled" in front of the PD.)

Gilbert is clearly a world-class gamesman -- and I'm not talking about basketball.

Is the Jackson Administration ready to be played?

WIRELESS IN PHILADELPHIA, PART 1

So I finally got the hotel wifi working with my Belkin card, checked four days of email , PD and blogs (great job on the Strickland/Flannery debate, everyone!), and got a chance to post something.

Bonnie and I are holed up with the dog at an Extended Stay America in Malvern... well, not actually in Malvern, but in an exurban office park moonscape nearby. I'm proud to relate that Bonnie gave her sister a kidney on Friday, so we're here while she heals enough to travel. Malvern is half an hour from downtown Philadelphia by car and an hour by train, so I haven't spent a lot of time in the city but I did manage to spend some time Monday with Derek Pew, the interim CEO of Wireless Philadelphia, and then got a tour Tuesday of the neighborhood wireless network run by the People's Emergency Center in West Philly.

I'll get to Philly Wireless when I have more time. For now I want to thank Derek and Corey Robinson of PEC for their time (Corey might actually read this, he seems to have been here before) and say a few words about the PEC system. It was described at length in this Civitium article in MuniWireless a few months ago. Here's a short version:

PEC started in the '70s as a shelter for abused and homeless women and has since expanded to provide all kinds of social and development services for a small, mostly Black low-income neighborhood around it. The neighborhood is a triangle between two main streets (Lancaster and Powelton Avenues) full of two-story rowhouses and a scattering of old commercial buildings -- one of which, a former abandoned warehouse, is PEC's beautifully renovated headquarters.

Several years ago, as part of its computer training and ownership program, PEC built a neighborhood wifi network. It's technically pretty simple. They have two Cisco access point antennas on the roof of their own center -- which is one of the neighborhood's highest points -- and antenna-and-bridge setups on other roofs around the neighborhood which have unobstructed lines of sight to one of the access points. The bridges receive the wifi signal from the center and rebroadcast it to nearby areas. Since most of PEC's target area is within a few hundred feet of an access point or bridge, the resulting wifi "cloud" covers pretty much the whole PEC neighborhood. The only router is back at the center, hooked up to a single Verizon DSL line.

Access to the PEC wifi isn't open to the general public -- it's password-protected and limited to neighbors who complete the Digital Inclusion training. They get a year of wifi Internet access for $5 a month, using USB clients that PEC provides with their recycled PCs. After a year, neighbors have to move on to a commercial service (Corey says PEC doesn't intend to get into the ISP business). That transition will become cheaper and easier when the city's EarthLink wireless is operational in the neighborhood, since most of PEC's trainees will probably qualify for one of the 25,000 low-income discounts EarthLink has agreed to provide -- enabling them to get continuing wifi service for $9.95 a month.

PEC's system isn't cheap -- Corey estimates the parts-and-labor cost of each new rooftop installation at around $3,000, including nearly $2,000 for the Cisco equipment. Remember, this is a neighborhood of maybe ten blocks with equipment on eight or nine rooftops, so it adds up to a very substantial investment to serve a couple of hundred households in a small turf. (Much of PEC's original hardware was donated by Cisco, a partner during the program's first couple of years, though not so much now).Cisco wifi hardware is considered very expensive but also very good... which may help explain PEC's success in getting a good network signal to PCs located deep inside brick rowhouses, using just ordinary little desktop client antennas.

Would this approach work in with less expensive hardware from other vendors, in a more spread-out neighborhood with bigger houses?

I don't know. But it seems to be working fine for PEC's neighborhood, right now.

More tomorrow.

QUESTIONS ABOUT WIRELESS PHILADELPHIA?

I'll be in Philadelphia next week with time on my hands, and I thought I'd use the occasion to find out more about the city's community wireless broadband project, the specifics of which are currently awaiting city council approval. So I called up Derek Pew, the interim CEO of Wireless Philadelphia, the nonprofit corporation in charge of the project, and made an appointment to talk on Monday. I'm also going to stop by the People's Emergency Center, which is operating a neighborhood wifi system for its low-income West Philadelphia constituents (see this PBS Newshour piece for more).

So... who's got questions you'd like me to ask?

STRICKLAND'S BROADBAND/COMMUNITY LEARNING CENTER PROPOSAL

I generally like Mark Naymik's political coverage, but I wish the PD had sent Henry Gomez with him to Ted Strickland's press conference at Rainbow Terrace yesterday. I don't think Henry would have missed part of Strickland's proposal that Naymik's story ignores completely. From the Strickland website:

Establish the Ohio Community Learning Centers Initiative, to boost the use of online and distance education services through Ohio's network of community technology centers.

Modeled on successful programs such as the Cuyahoga Community College's project at Rainbow Terrace, and over 300 community technology centers (CTCs) statewide, this program will mobilize CTCs with hands-on staff support and join them with the online learning resources of the Ohio Learning Network and the Ohio College Access Network. Using the base program E4ME, a free online course, this program will in its pilot phase serve 10,000 learners statewide with life skills coaching, basic computer and GED classes, while channeling successful learners into pathways for further advancement through community and technical colleges and other career training enterprises. It will provide individuals with hands-on counseling to take them from the informal learning environment of a CTC to open doors to higher education and formal certification. Implementing this program is estimated to be an annual investment of at least $5 million. The program will be paid for with savings gained by reforming state procurement of network connectivity.

Strickland spoke about this part of the proposal at length, but more important, he held the press conference at the Rainbow Terrace Learning Center to underline the point that digital inclusion is as much about training as about physical network access.

Apparently Naymik didn't get it. I'm glad Strickland does.

(Don't get me started on Blackwell.)

ARE OUR GAS PAINS UNNATURAL?

Alan Forman of Consumers United for Fair Utility Rates passed this along in an email this morning... it's an AP story but I can't find it linked anywhere. (Update: It's from the Seattle Post-Intelligencer, March 7.)

Report blames lack of federal oversight for high natural gas prices
SAM HANANEL
Associated Press

WASHINGTON - Too little oversight of financial markets - not supply and demand problems - are to blame for skyrocketing natural gas prices, top law enforcement officials in four Midwestern states said Tuesday.

Comparing natural gas trading to "the wild, wild West," the attorneys general from Illinois, Iowa, Missouri and Wisconsin urged Congress to increase regulation of markets they say are vulnerable to abuse and manipulation.

The officials - all Democrats - issued a six-month study of natural gas prices. They said they want to debunk the commonly held view that a lack of supply and surging demand are responsible for sharp price increases that have caused a 25 percent to 30 percent rise in winter heating bills in the Midwest and elsewhere.

"It's stunningly annoying to sit here and have to literally say the moon is not made of green cheese," Missouri Attorney General Jay Nixon said at a news conference. "Supply and demand did not cause the spikes."

The price surge has affected more than half of all U.S. households that heat with natural gas. Many of those who rely on electric heat also have seen bills go up because a large number of power plants run on natural gas.

While natural gas prices are up about 28 percent this year, usage is down 5 percent. At the same time, supply has remained steady.

"How can you have demand down, and price up and supply level?" asked Iowa Attorney General Tom Miller. "It doesn't make sense. To get to these big increases, you have to look at the financial side, at the trading."

The report prepared by Mark Cooper, research director for the Consumer Federation of America, concluded that one reason for the upward climb of prices is a huge influx of money into largely unregulated financial markets.

Under current law, Miller said, only about 20 percent of trades are reported. The lack of transparency allows traders to gain huge positions and potentially manipulate the market, he said.

"It's sort of like the wild, wild West in terms of trading," Miller said. "There's very little reporting of trades."

The officials urged Congress to make market trading more transparent by requiring registration of traders and reporting of all trades. They also want stricter limits on positions held by one entity, longer settlement periods for short- and long-term contracts, and restrictions on how much the price of natural gas can fluctuate before trading is temporarily halted for a cooling off period.

Sandy Crockett, a spokeswoman for the Natural Gas Supply Association, blamed the recent price spike on "unprecedented and massive supply disruptions" in the Gulf of Mexico during Hurricanes Katrina and Rita.

"Both the Federal Energy Regulatory Commission and the Commodity Futures Trading Commission have, in fact, concluded that this winter's price fluctuations were entirely consistent with market fundamentals at that time," she said in a written statement.

"We support their ongoing efforts to police natural gas markets for any evidence of manipulation or abuse," Crockett said, adding, "We remain comfortable with the level of oversight provided by these regulatory agencies."

Wisconsin Attorney General Peg Lautenschlager said the report was commissioned before the hurricanes struck and took them into account. The report found the storms actually had little impact on supply because natural gas storage was at or near record levels both before and after the hurricanes struck the Gulf Coast.

ON THE NET

The report is on the Iowa Attorney General's Web site: http://www.iowaattorneygeneral.org/latest_news/releases/mar_2006/Natural_Gas.html

Notice whose state attorney general is not involved.

PHILADELPHIA WIRELESS: DEAL IS DONE

Posted March 1 on the City of Philadelphia website:

PHILADELPHIA - Mayor John F. Street announced today that four agreements have been signed allowing EarthLink and Wireless Philadelphia to bring wireless Internet service to every City neighborhood. When fully implemented, the initiative will turn Philadelphia into the nation’s largest WiFi hotspot and help to improve education, bridge the digital divide, enhance neighborhood development, and reduce the costs of government.

...Under the agreements, EarthLink will build, manage and maintain a wireless network over the City’s 135 square miles at no cost to taxpayers. EarthLink will install transmittal devices on approximately 4,000 of the City’s street lamp pole arms for which it will pay the City. In addition, EarthLink will provide City residents and visitors with free hotspots in 22 locations around Philadelphia, and provide the City with 3,000 free or discounted WiFi accounts and 700 discounted T-1 accounts to be used at the City’s option.

...Wireless Philadelphia, a non-profit entity incorporated by Mayor Street last March, will use the revenues it receives from EarthLink (5 percent of access revenue) and other monies raised to invest in educational and social programs to help Philadelphia citizens. $2 million of the amount EarthLink pays to the City also will be used for programs to help bridge the digital divide. Initial plans include purchasing 10,000 discounted computers for children and low-income residents to use and for associated training programs. Wireless Philadelphia will also be responsible for building awareness of the program among audiences across the City.

The costs of the service will be geared to users’ different needs. Economically disadvantaged users will be charged $9.95 a month while other Internet Service Providers (ISPs) will be charged a wholesale rate that allows them to sell access for $20 a month or less to retail customers.

Here's the MuniWireless summary of the deal, and some comments.

The Daily News still likes the idea but wants more details before final City Council approval.

And this just in from north of the water... Toronto's municipal electric company announces plans to deploy wireless broadband citywide on the Philadelphia model.

I'm going to be in Philly the week after next. Lucky timing...

REALLY, REALLY BAD GAS PAINS

The PD's John Funk makes a heroic effort today to explain what's happening to natural gas bills, but it's very confusing -- even to your humble utility blogger, who has buried his nose in the subject for the last couple of weeks.

Here are the main things I think we all need to understand:

1) Overall, heating our homes with gas is nearly twice as expensive as it was just four years ago -- and it's going to stay that way.

Dominion's home gas bills spiked from around $5 per thousand cubic feet (mcf) to almost $11 in the first half of 2001, but fell back under $6 by spring 2002. This winter's spike, which took us to $16 per mcf in December, is also falling back due to the cheap short-term contracts Funk describes -- but the final price on our bills is unlikely to go much below $13 this summer, and then start pushing back upward for next heating season. In other words, $13-$15 per mcf is Dominion East Ohio's new "normal range".

To see the monthly ups and downs evened out, look at the chart below. The main graph line is the running average of home natural gas costs -- calculated each month for the previous twelve months -- while the little boxes represent the annual "floor", i.e. the lowest monthly cost per mcf during each calendar year. The blue box is the likely floor (IMHO) for 2006 -- around $13, some time this summer. (All monthly figures are from the PUCO's "Apples to Apples" comparison charts.)

2. NOPEC isn't going to save us. The new "aggregation" deal announced last week by the Northeast Ohio Public Energy Council means that households in NOPEC cities, including Cleveland, will pay about $12.74 per mcf from April through September ($9.70 contract gas cost, plus 73 cents in sales tax on the gas, plus $2.30 for East Ohio's transportation charge). This will probably be no more than 2% or 3% cheaper than Dominion East Ohio's own rates, which will fall to a similar level for the same period. Then NOPEC has to negotiate a new -- and higher -- contract gas rate for bills starting in October.

3. There's really no way out of this -- for individual consumers or for the NEO economy -- but to invest in heating our homes a lot more efficiently, or invest in heating with something other than natural gas, or both.

MEET THE BLOGGERS UPDATE

I've had this weird cold-in-my-eye thing for the last week so it's been hard to look at a computer screen, let alone post regularly. But there's an accumulation of Meet The Bloggers news I have to pass along.

First, Wendy Hoke has a long, very insightful article about MTB at Creative Ink.

Second, there are newly posted transcripts of the MTB interviews with Chris Redfern and Marc Dann, as well as the MTB Salon with Roldo Bartimole. They're all great reads.

Third, MTB has a very busy two weeks coming up, with the MTB version of "sweeps week" scheduled for March 19-25: a Democratic gubernatorial candidates' debate (with Ted Strickland and Bryan Flannery) on the 19th, GOP gubernatorial candidate Jim Petro on the 23rd, and 13th Congressional District candidate Capri Cafaro on the 25th.

I'll be in Philadelphia for at least part of sweeps week so I may miss a couple of these sessions, but you don't have to... they're all at Talkie's Coffee and all bloggers are welcome to participate.

PHO SAYS IT ALL!

An open letter to Brown and Hackett. Where do I sign?

WE GET LETTERS: In my first Free Times column a couple of weeks back, I poked fun at Cleveland's much-hyped "Digital Community" and "Intelligent Community" awards by way of getting to a serious concern -- the low rate of Internet access among city residents, and some concrete ways to improve it.

This morning's FT has a letter from Scot Rourke of OneCleveland, responding to the column's main point as well as to my snarkiness about the awards. Read it here (you have to scroll down a bit from the link.)

It's a serious comment from Scot, and I appreciate it. Let me repeat what I said in the column: OneCleveland is "a world class Good Thing", we're really lucky to have it, and Scot and his colleagues are entitled to all the recognition they can get. No way do I think that OneCleveland itself is "more concerned about winning awards than addressing community needs".

But I do think that Cleveland as a whole has no business posturing itself as a "world-class digital community" unless we do what's necessary to get the large majority of our citizens online. That's a long row to hoe, and we're just barely getting started. We're not investing enough in community IT training and support, we're behind many other cities in public commitment to affordable residential broadband, and we're mostly nowhere when it comes to taking advantage of open source software (though RealNEO's initiative -- in cooperation with OneCleveland! -- to develop drupal-based web resources for nonprofits is a major exception).

No one expects OneCleveland, or any other organization, to drive all these issues single-handedly. But Cleveland has to deal with them -- from the bottom up as well as the top down -- or we won't get to be the "world-class intelligent digital community" that we're all seeking.

So Scot, let's all work together on it. That's all I'm saying.

As for the snarkiness... well, you know, it's just that blogger thing. I'll try to keep it under control.

GAS COSTS SUCK IN THE FREE TIMES

The Free Times has offered me a chance to sound off in print every couple of weeks. My second Foray Into Newsprint is in today's edition (Heating Costs Suck: Rising natural gas prices draining millions from Ohio).

If you're here because you saw the URL at the bottom of the column, welcome.

The column has one glaring oversimplification: I ignored the whole issue of multiple natural gas suppliers offering "choice" to local consumers with various contract prices and terms. The column talks only about Dominion East Ohio, which is really the local distribution company for all those sources including its own affiliated supplier, Dominion East Ohio Energy.

I ignored the issue of "consumer choice" because a) it's way too complicated to describe in a 700 word piece, and b) it doesn't matter. Households throughout the Dominion East Ohio system have similar bills and similar increases no matter which suppliers they "choose" on paper. Those who ignore the "choice" option and just let Dominion East Ohio buy our gas for us are consistently at the lower-cost end of the PUCO's "Apples to Apples" comparison charts. Most important, almost all that gas, no matter who the suppliers might be, comes from outside our region through the Dominion pipeline... which is what the column is about.

But if you're interested, here's a comparison of Dominion East Ohio's non-choice "utility rate" (what my family pays) with the rates paid under contracts with "consumer choice" suppliers who appear on the PUCO charts for both February 2006 and February 2003:


Not much of a "choice", is it?