Madison, Wis., Scales Back Hopes for Low-Income Internet Project

After estimates put the cost of a fiber-to-premises project at $170 million, a committee unanimously recommended smaller targeted approaches be pursued instead.

by Dean Mosiman, The Wisconsin State Journal / October 24, 2018
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(TNS) — Madison’s long-held hope of a citywide, fiber-to-premises initiative to connect low-income households to the Internet is now being seen as financially untenable due to the roughly $170 million public cost.

Closing the digital divide — the disparity between people with access to modern information and communications technology and those without — has been a priority for city leaders for years.

The effort is intended to connect those with low incomes to the Internet so they can compete in school and for jobs, provide service to the entire city, and increase market competition and consumer choice.

But the city’s Digital Technology Committee, created in 2013, has unanimously recommended that a broad fiber-to-premises plan provided by a consultant, CTC Technology & Energy of Kensington, Maryland, not be pursued at this time and that the city explore smaller, more targeted approaches in the 37-page plan and report, which was completed in September.

“I’m obviously disappointed,” city chief information officer Sarah Edgerton said. “The digital divide is strong in Madison and we want to bridge that gap.”

A broad initiative is untenable because any remaining state or federal funding for broadband projects is now targeted to rural areas and the amount of city borrowing or assessment necessary currently is not feasible, the Digital Technology Committee says.

In August 2017, the city issued a request for proposals for a private-sector partnership to bring gigabit-class broadband to the entire city, with a shared-risk model under which the city would construct and maintain fiber-to-the-premises infrastructure and lease the fiber backbone to a partner that would construct service drop cable into each subscriber’s home or business.

The city got four responses, and a committee eventually selected a lead respondent. But CTC’s analysis showed that the city would have to pursue bond financing totaling $173.2 million to cover deployment and necessary startup capital.

“This is a huge amount of money,” Edgerton said.

In the wake of the report, the Digital Technology Committee recommended that the city explore smaller, more targeted options in CTC’s plan.

On Oct. 16, City Council President Samba Baldeh and Ald. Keith Furman introduced a resolution to follow the committee’s recommendations. The resolution will be considered by city committees before a final council decision.

The committee recommendations represent another setback for the city’s efforts to extend low-cost Internet service.

In January, the city terminated a $512,000 contract with ResTech Services implementing a troubled “Connecting Madison” pilot program to deliver low-cost Internet service to the low-income Darbo-Worthington, Brentwood, Allied Drive and Kennedy Heights neighborhoods.

ResTech was supposed to provide services for residential subscribers in the neighborhoods for $9.99 a month with unlimited data and a minimum speed of 25 MBps, plus a call center, 24-hour support, infrastructure maintenance and network monitoring. Despite completing the backbone of a system intended to bring service to more than 1,000 apartments in the neighborhoods, ResTech had managed to sign up just 19 customers.

A “lessons learned report” after ResTech’s contract was terminated says future city efforts should include a much stronger marketing effort for service, that large multi-dwelling buildings present challenges for new service providers, and that many city residents have new options for affordable Internet access since the city’s digital divide initiative began, CTC’s report says.

©2018 The Wisconsin State Journal (Madison, Wis.). Distributed by Tribune Content Agency, LLC.

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