Fiber Networks Are Expensive But Worth It, Municipal Internet Provider Officials Tell City Councilors
A municipal fiber-optic network is faster, cheaper, and more responsive to customers than the internet through a cable TV company – and can be profitable for a city, advocates told a group of city councilors this week.
In a public forum on Monday, officials from municipal internet providers in South Hadley and Westfield encouraged six councilors representing Agawam, Holyoke, Northampton, Springfield and West Springfield to investigate city-owned fiber cabling in their communities.
âOne of the keys for Westfield is that we can generate non-tax revenue,â said Thomas Flaherty, managing director of Westfield Gas + Electric, which operates the Whip City Fiber network. âOnce you get to the point of paying off your debt service, you have the ability to have bonus non-tax income.â
The five cities represented by advisers at the forum have each signed a contract for cable television with Comcast, which also offers high-speed Internet service. Springfield City Councilor Jesse Lederman said the group of councilors began discussions about municipal fiber networks last year, when Comcast announced it would apply additional fees of up to $ 100 per month. for customers using more than 1.2 terabytes of data. All five cities approved a resolution opposing the data caps, and Comcast has delayed charges indefinitely.
Lederman co-hosted the April 26 forum with Holyoke City Councilor Rebecca Lisi. Northampton Town Council President Gina-Louise Sciarra, Northampton Town Councilor Bill Dwight, West Springfield Town Councilor Sean Powers and Agawam Town Councilor Rosemary Sandlin.
âThe data cap problem grew so quickly because at home, during the pandemic, families became so aware of the part of their daily lives that required internet access,â Lisi said. âWe’re finding that families really want to know that they can access this utility reliably and at the speed that fiber offers.â
Caitrin Ferriter, sales manager at Whip City Fiber, said customers were happy to make the switch. Not only are the monthly rates competitive, but signing up for a city-owned utility means no taxes, no equipment costs, and no restrictive contracts. She also said customers appreciate knowing that their technicians and customer service representatives are local people who work for their own city government.
âThey trust us,â Ferriter said. âIt’s a key factor. Confidence and familiar faces.
Flaherty said Whip City Fiber began with an investment of $ 21 million from taxpayers to build a network covering 70% of Westfield. He said planners estimate they need a 30% subscription rate to break even. They have exceeded expectations, with 50% of potential customers signing up, and are using the excess revenue to expand the service to the rest of the city. Once every street is wired, he says, Whip City Fiber will begin to generate profits for the city. The 50% subscription rate is about average for communities across the country where municipal fiber competes with a private broadband network, Flaherty said.
In the small town of South Hadley, it cost $ 15 million to build the Fibersonic Grid, said Sean Fitzgerald, chief executive of South Hadley Light and Power. He estimated that most towns in Hampden and Hampshire counties would fall within a $ 15 million to $ 30 million range to build their networks, although larger population centers like Holyoke and Springfield would cost more.
The panel of experts also included Timothy Paul, President and CEO of Springfield-based Omnipoint Technology. Paul said he submitted a proposal to the city of Springfield to build a city-owned fiber network for $ 100 million to $ 120 million. It’s a big investment, he said, but in big cities it’s a âno brainerâ not only for the residential consumer, but also for economic development.
âIf your municipality has fiber optic infrastructure, you can also attract the kind of businesses that can boost your economy,â he said.
One advantage that South Hadley and Westfield had over most other municipalities was a taxpayer-owned gas and electricity utility, also known as the municipal lighting powerhouse. Not only did they already have billing and maintenance systems in place, but by owning the local electric utility, these communities also owned the utility poles, which simplified the process of stringing fiber optic cables. . Of the five cities that hosted Monday’s forum, only Holyoke has its own municipal lighting plant. The rest are expected to create new utility companies from scratch and negotiate with Eversource for space on the utility poles.
Sandlin noted that in Agawam, a private company, OTELCO, offered to set up their own fiber optic network.
Flaherty said the demand for fast internet speeds – 1 gigabit per second and above – will only increase. Even with the return to in-person teaching, homework will continue to require Internet connections, as will telecommuting, video games, and even home appliances on the âInternet of Thingsâ.