Monterey drops out of broadband group, asks state to reconsider Fiber Connect

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MONTEREY — They say it's a no-brainer, and they're casting a line back out to the state to try — once again — to convince it that what they want to do makes lots of sense.

"The town feels that the best plan is to work with Fiber Connect, directly or indirectly, to finish out the build and realize the long-awaited promise of Fiber-to-the-Home," wrote Monterey Broadband Committee Chairman Kenneth Basler, in a letter to Jay Ash, Secretary of Housing and Economic Development.

But there's just one problem. The state vets the finances of companies that will get some of its money, and it told Monterey-based Fiber Connect LLC and the town last month that it wouldn't give the town its share of state grant broadband money if it went with the company.

It is another installment in the quest to bring high-speed internet to each town in the region — one important step toward fixing a limping rural economy and building a thriving one. There is lots of movement and many success stories as the state and towns work through the maze together for the right path. There is also some struggle.

The Massachusetts Broadband Institute said Fiber Connect, a three-year-old company backed by venture capitalist Felda Hardymon, simply didn't have enough of a financial track record.

But Basler said the town is giving it another shot with the state and the company anyway, after the Broadband Committee pulled the town out of a four-town broadband committee negotiating with Frontier Communications to build and operate a fiber-optic network.

Basler says it makes sense to do it this way because Fiber Connect is already in the process of using $1.5 million of its own capital to build a network in town despite MBI having disqualified the company. The company's trucks are now out stringing fiber to utility poles.

"Why not join forces with Fiber Connect and finish off the whole town?" he told The Eagle.

The company plans to string fiber to 70 percent of the town's households and businesses by the end of December, and have some lit by the end of June 2018 if those residents choose to buy the service.

The committee wants to use the total $1.1 million in state grant money allocated to Monterey to pay Fiber Connect to build out the remaining 30 percent of homes and businesses, though according to Fiber Connect Founder Adam Chait, it is unclear exactly how much that 30 percent will cost.

Basler said an important reason for not using MBI-approved Charter Spectrum and Frontier Communications is that, based on the committee's research and negotiations with Frontier, residents might have to wait another three to five years for higher speeds.

Basler said the MBI's concerns with Fiber Connect should be eased because the company is willing to increase its performance bond to "match or go beyond" the state's grant, should the company fail to deliver.

Fiber Connect's original bonding was set at $500,000, and Basler said this is one reason MBI disqualified the company.

Chait said the state never gave the company a chance to increase this number. He declined to say how high the company was willing go, and could not confirm that it matched or exceeded the state's $1.1 million total allocation to the town. But he said the company wants to negotiate.

"We're willing to sit down with the state and say, `What's it going to take to make you comfortable and happy to get this done.'"

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State Executive Office of Housing & Economic Development Spokeswoman Michelle Hillman said the town's letter to Ash is under review, but she was unable to provide additional comment or clarification. Requests for comment by Peter Larkin, chairman of MBI and a special adviser to the state Executive Office of Housing & Economic Development were earlier referred to Hillman.

Basler said in addition to Fiber Connect's performance bond, the town has access of up to $1.6 million in bonding for a fiber optic network, voted on by residents in 2015.

Committee member Clifford Weiss says he realizes this letter to Ash is a bold one.

"It's a scorched earth approach," Weiss said. "But with Fiber Connect, soon the kids won't have to sit in front of the library to get internet... and our real estate values will increase if we get it now while all the other towns are waiting."

Dropping out of Frontier negotiations

Weiss said the town pulled out of four-town negotiations with Frontier partly because the company said it could take between four to five years to build a fiber network to serve Monterey, New Marlborough, Sandisfield and Tolland.

It was also the expense, Weiss said. "Frontier wants $6.1 million over the course of the next 15 years [of the contract]," not including the purchase of services by customers. "It's a burden on our taxpayers," he added.

Sandisfield Broadband Committee Chairwoman Alice Boyd said Monterey's departure isn't a problem and won't raise costs for the other three towns. The towns told Monterey officials they could rejoin the group if the Fiber Connect plan falls through.

"But there will be costs — we're all paying legal fees," she added, of ongoing negotiations with Frontier.

She said the company plans to start stringing fiber to households and businesses next spring.

But Monterey wants it sooner. And they have other reasons for wanting to use Fiber Connect.

As they told Ash, they want to keep the revenue and jobs here by hiring a local business, one with an "angel" financial backer who is a senior partner at Bessemer Venture Capital based in Cambridge, and who is also a Berkshire County resident.

Also, Basler and Weiss have always insisted on getting the town what they say is the longevity of fiber technology over a cable-based solution offered by Charter Spectrum, even though that would cost the town nothing up front.

"Fiber Connect is already involved and doing it," Weiss said. "It makes no sense to wait two to three years."

And when asked what happens if the state says a big "no," Basler said the committee might take it to a special town meeting to ask, "Should we put in our own money for this?"

Reach staff writer Heather Bellow at 413-329-6871.


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