Voices of Digital Communities

A Tax Increase That Even an American Could Love

Duluth was one of the ten most distressed cities in America as old-line industries shed jobs and closed factories.

by / November 23, 2011

Don Ness is one very smart guy.  He is mayor of the American city of Duluth, Minnesota, home to 86,000 souls on the shore of Lake Superior just south of the Canadian border.  First elected in 2007, he enjoys an 81% approval rating today, for reasons that will become obvious.

We had a chance to talk during the Blandin Foundation's Broadband 2011 conference in Duluth last week. The conversation turned, naturally enough, to broadband. Overall, Minnesota is very well served, with most of the population having access to high speeds, but rural areas suffer from limited choice, large gaps in service, and high prices.  In Duluth, Mayor Ness wants to see fiber-to-the-home deployed as the next step in a striking turnaround story. 

In the Eighties, Duluth was one of the ten most distressed cities in America as old-line industries shed jobs and closed factories. But as other places followed the downward spiral of  Detroit, Duluth's leaders chose to let go of the past.  They began creating a new economy based on year-round tourism and on strengthening the city’s role as the region’s retail and banking center.  During Mayor Ness’s tenure, the city has eliminated sewer overflows into Lake Superior, fixed 100 miles of streets, put its retiree health care program onto a sound financial footing and created a structurally balanced budget.

Broadband stimulus money is currently funding the development of an extensive middle-mile network serving the region.  The question for Mayor Ness is how to cross the last mile to homes and businesses, when incumbent carriers do not seem up to the task.  I told the mayor about the village of Nuenen in the region of Eindhoven, our Intelligent Community of the Year.  Well-connected community leaders there persuaded the Dutch government to spend some of the nation’s last broadband funding on a fiber-to-the-curb deployment in Nuenen.  The same community leaders then formed a member coop called Ons Net or “Our Network,” and invited homeowners to put money into it. The funds went to pay for the last-mile hookup, at a cost of about US$1,500 per household.  As Kees Rovers of Ons Net put it, “if I offered you a home improvement for $1,500 that would clearly add to the value of your home, you would take, right?”  You bet I would.  And that’s what nine out of every ten households in Nuenen did. 

When I finished the story, I could see the wheels turning in Mayor Ness’s head.  “A voluntary assessment,” he said.  “We could offer groups of homeowners the chance to have a small additional tax assessment on their properties.  The money would go to build and maintain the fiber line into the home.”  I told him it was a brilliant idea.  Simple and transparent, making use of an existing system rather than starting a new organization, and putting the power of choice into the hands of citizens.  And entirely in keeping with the most conservative definition of a local government’s proper role: to make civic improvements that support property values.  

That is the kind of creative thinking we find in the world’s Intelligent Communities.  Big ideas – often from faraway places – translated into practical solutions at the local level.  I hope that Mayor Ness follows through on his brainstorm and that the homeowners of Duluth reap the benefits.

Robert Bell Co-founder of the Intelligent Community Forum

Robert Bell is co-founder of the Intelligent Community Forum, where he heads its research and content development activities. He is the author of ICF's pioneering study, Benchmarking the Intelligent Community, the annual Top Seven Intelligent Communities of the Year white papers and other research reports issued by the Forum, and of Broadband Economies: Creating the Community of the 21st Century. Mr. Bell has also authored articles in The Municipal Journal of Telecommunications Policy, IEDC Journal, Telecommunications, Asia-Pacific Satellite and Asian Communications; and has appeared in segments of ABC World News and The Discovery Channel. A frequent keynote speaker and moderator at municipal and telecom industry events, he has also led economic development missions and study tours to cities in Asia and the US.