Steve Nelson: Moving forward with broadband — together
WASHINGTON, MA. >> Sixty million dollars is now on the table to bring broadband to people in Western Massachusetts lacking high-speed Internet service. Over $38 million will come from 24 towns, the balance from the state. This is more than enough funding for the project to go forward, and succeed.
The Massachusetts Broadband Institute will build the infrastructure connecting homes and businesses. Each town is responsible for a share of the construction costs, depending on its size and other factors. At recent town meetings, voters overwhelmingly approved borrowing the required funds. A few more towns are yet to vote, with similar outcomes likely.
All these towns are members of the municipal cooperative WiredWest, which will own and operate a regional fiber-optic network for the benefit of everyone in those towns. Working together as a region is by far the best way to reduce construction costs, manage the network, minimize the risks and maximize the benefits of the project.
WiredWest and our towns are running a campaign to sign up future customers. Since March about 6,800 have made a $49 deposit for service, 36 percent of all households in our territory. People are paying for a service they won't get for two years or more. That's how badly they want broadband for themselves and their families.
Yet as the project gains momentum, there are still some lingering questions and misconceptions about WiredWest and our regional solution for broadband.
What is WiredWest? People sometimes incorrectly refer to WiredWest as a vendor or an agent for the towns, as though it were an entity independent of them. Not so. WiredWest is a creature of its members. They formed it. They control it through their representatives on its Board of Directors. Now that towns will be putting up money, a legal document called an operating agreement is being drafted with input from the towns. It will make it absolutely clear that the towns who sign the agreement own WiredWest.
What happens to the money from the towns? When towns sign the agreement, they will commit to contributing their broadband funds to WiredWest, which in turn will make payments to MBI while overseeing construction on behalf of our members. Few towns have either the expertise or the extensive time required to conduct such oversight. WiredWest does, which is yet another advantage of working together to draw on resources across the region.
Who will own the network when it's built? WiredWest will own the network and its member towns will own WiredWest. Each town will have an ownership share in proportion to the amount it invests to fund the network, and together they and only they will control the cooperative.
Why can't each town own the pieces of the network within its borders? There are costly central elements of the network — e.g., network operations, customer service and video distribution — necessary to serve all towns in a state-of-the-art regional network design, but which no one town can own simply because facilities are located within town boundaries established in the 18th century. "Huts" out in the field housing electronic equipment can serve two or more towns but will belong to WiredWest, which will operate and maintain them. Deploying fewer huts on a shared basis will save millions of dollars.
What happens to the revenues generated by the network? After WiredWest meets its operating costs and reserve requirements, money will be distributed back to the towns to make principal and interest payments on their debts. If about 50 percent of potential customers take service, then WiredWest can fully cover those debts. We've already signed up 36 percent in just six months. Rural fiber broadband networks often achieve "take rates" of 75 percent or better.
The town of Otis recently withdrew from WiredWest, saying that if it invests in broadband, it should own and control its own network. This is looking through the wrong end of the binoculars, and failing to see the big picture of a regional approach. With ownership comes responsibility: for hiring and managing contractors, for equipment repair and replacement, for responding to emergencies like outages, for serving customers in town who will be in your face if dissatisfied. Otis will vote soon on funding for broadband. People there should fully understand the costs and risks of going it alone.
Any town's investment will be lower through regional economies of scale and safer as part of a large group, rather than taking on itself all the operating costs, administrative burdens and financial risks, yet with a very small customer base to provide revenues. There are many examples of towns pooling their resources for the greater good, such as regional school districts, ambulance services and renewable energy facilities. This is how best to provide broadband.
Most towns remain committed to moving forward together through WiredWest. In our shared present and shared future lies our shared success.
TALK TO US
If you'd like to leave a comment (or a tip or a question) about this story with the editors, please email us. We also welcome letters to the editor for publication; you can do that by filling out our letters form and submitting it to the newsroom.