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Michigan City Loan Will Boost Fiber Network Connectivity

Traverse City, Mich., has agreed to lend $800,000 in economic development funds to the city-owned utility to boost its plans to bring Internet with up to gigabit speeds across a bigger swath of the city.

by Jordan Travis, The Record-Eagle / September 9, 2020
TNS

(TNS) — High-speed internet via Traverse City, Mich., Light & Power’s fiber-optic network will arrive a little faster to more than 1,000 potential customers.

Traverse City commissioners on Tuesday agreed to lend $800,000 in economic development funds to the city-owned utility to boost its plans to bring internet with up to gigabit speeds across a bigger swath of the city than originally planned.

Their 6-1 vote, with Commissioner Roger Putman voting against, will fund installing fiber-optic line throughout much of Central Neighborhood, from Front Street and the Boardman River to the north, stretches of Locust and Union streets to the east, 13th Street to the south and Division Street to the west, as previously reported.

City Manager Marty Colburn said it’ll allow adding the area to the network’s first phase, meaning they can be served by the same network hub as the rest of it.

Commissioner Christie Minervini pointed out the proposed expansion of phase one wouldn’t be adding customers, so much as serving them sooner than hoped for.

Colburn agreed.

“This would actually on short notice be able to move forward the project in phase one, not phase two, and it’s directly tied to the expansion of our economic activity as well as, how I mentioned earlier, help with the bandwidth for all the community to utilize it, particularly students,” he said.

Both referenced TCL&P’s overall idea to eventually build the network throughout its entire service area — Colburn added the utility’s working to secure a U.S. Department of Agriculture loan to do so.

If successful, the utility potentially could pay back its loan from the city’s economic development fund faster than the five-year term commissioners approved, Colburn said. Until it’s paid back, it’ll tie up most of the $1.1 million available.

Colburn said it’s a particularly good time to make broadband even more widely available, with more people working from home and thousands of students learning remotely.

Commissioners mostly agreed, including Ashlea Walter, who mentioned how her own house could use more bandwidth with a handful of kids learning at home. It could also entice people and companies to move to town — Minervini said she’s already heard from a few.

But lending the money when the city’s eyeing economic trouble in the future didn’t make sense to Putman, he said. He argued for holding it in reserve, despite his overall support for the project.

City resident Rick Buckhalter also questioned the idea and proponents’ claims the project will have the economic growth impacts — he wanted to see the data or studies backing up these assertions, he added.

Russell Schindler, TCNewTech’s outgoing president and a longtime project supporter, had some questions as well. Another fiber provider already signed up hundreds of customers in the city and seemed ideally poised to take over the utility’s project. He questioned why TCL&P’s project is behind schedule and why the utility continues to go with Fujitsu Network Communications in spite of the delay without seeking bids.

He also said he can “guarantee” Charter Communications will undercut TCL&P’s fiber prices to financially destroy the project, which he argued should allow for other internet service providers.

“I want to see the project go forward but I think it really needs to have a different business model and a fresh look to the projections of financial viability under the current business model,” he said.

TCL&P Executive Director Tim Arends after the meeting refuted Schindler’s assertion that the project is over budget, but acknowledged COVID-19-related delays shut down work for about two months — Mayor Pro Tem Amy Shamroe told commissioners the original projected date for being online was in May.

She also said TCL&P didn’t seek bids for the work because installers are already on the job for the first part of phase one.

The first phase, as originally planned, will also cover much of downtown, along Eighth Street, down Woodmere Avenue and in the Boardman and Central neighborhoods, as previously reported — about 2,200 potential clients.

Arends after the meeting said the utility’s working on beta testing with early clients and a “soft launch” of the network by distributing marketing materials to a few dozen potential customers. Others looking to sign up are already calling in, and 119 were on the waitlist as of Tuesday morning.

It’s a number Arends expects to grow as awareness does, and he said an announcement’s coming within two weeks about a full launch. He conceded that not every customer the network passes will sign up — past projections showed a 40 percent take rate — but believes growing the first phase is the right move. The loan gets it done without impacting the utility’s ability to pay for electric reliability projects.

“So we’re just being really cautious and very careful about how we’re deploying and where the money is coming from to pay for that deployment,” he said.

©2020 The Record-Eagle (Traverse City, Mich.). Distributed by Tribune Content Agency, LLC.

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