The Shutesbury Board of Selectmen has rejected a proposal from Charter Communications to build a cable network within its borders, saying the town should take take available state broadband grants and apply the money to constructing its own fiber optic network.
Local officials wrote to the Massachusetts Broadband Institute on March 9, saying the Charter cable proposal "is not a good long-term solution to bring broadband to our town" and that "town leadership still believes that building and owning our own network is preferable." Shutesbury last estimated the cost of building its own high-speed fiber network to be $2.57 million. Around $1.7 million could be raised through local taxation, and $870,000 from state grants -- $510,000 for construction and $360,000 for professional services.
Every home in Shutesbury -- a small Franklin County hilltown within commuting distance of UMass Amherst -- would be reached by the proposed town fiber network, which would be operated by a third party. A basic subscription for high-speed data would be around $75, local officials said. By contrast, Charter would serve 96 percent of the homes, and the hybrid fiber-cable network would be owned by the corporation. Customers could subscribe to a range of services, including a "triple play" option for for internet, television, and voice.
Charter proposes a basic plan with downloads at 60 megabits per second, and uploads at 4 megabits -- a so-called "60/4" setup -- starting at $59 dollars per month. Higher speeds would be available as well. Charter would receive Shutesbury's allotted $510,000 construction grant as well as grants from five other towns it proposes to serve.
Shutesbury Board of Selectmen chair Michael Vinskey said in an email to The Republican that the Charter proposal does not meet the town's stated policy goal to reach all homes. As proposed, the Charter proposal would not raise taxes in Shutesbury. But the company would not extend service to about three-dozen far-flung properties unless it gets extra money from the town.
In a March 9 memo, the Shutesbury Broadband Committee reiterated its goal of serving all residents. Charter would not commit to full coverage, and would not commit to a dollar figure to provide all homes with cable, the memo stated. Entering into a contract without that information "would not be fiscally responsible," wrote Vinskey.
Vinskey said fiber would provide higher speeds, be more durable and redundant, and give the town local control. "We are committed to a proposal that incorporates hardware that will allow increased capacity well into the future," he wrote. While Shutesbury Town Meeting in 2015 authorized $1.7 in bonding for a fiber network, the debt exclusion vote will be taken again in May.
Without Shutesbury on board, it's not clear what will happen to Charter's six-town proposal. On March 6, MBI announced that Charter qualified for $4.9 million in state grants to build a cable network in Princeton, Shutesbury, New Salem, Egremont, Hancock, and Monterey. The proposal was described as "inseverable" -- that is, as an all-or-nothing proposition. The strength of the Charter proposal is that towns would not have to borrow money to build a network. MBI chairman Peter Larkin said last week that the Charter proposal "may be an attractive option" to the six towns for that reason.
Shutesbury supported Wired West
The Legislature in 2014 authorized $50 million to bring broadband to Central and Western Massachusetts, with $40 million for communities with no high-speed service. The initial plan was for the state to provide one-third of the cost of a regional fiber network. Shutesbury and 23 other communities in 2015 authorized a total of $38 million to build a fiber network as part of Wired West, then structured as a cooperative of town-formed telecom utilities known as "municipal light plants." Wired West had proposed a regional design to connect member towns to the state's $90 million "middle mile" fiber optic backbone, an MBI requirement. Wired West would own and operate the multi-town network. Shutesbury was a strong and early backer of the WiredWest model.
The plan was derailed in 2015 after consultants for the state sharply criticized Wired West's business plan and MBI pulled funding for the project. MBI changed their policy to insist that municipalities own their own networks, effectively invalidating the Wired West proposal. Gov. Charlie Baker subsequently ordered a three-month pause to review the state's broadband program. He appointed new leadership and promised a flexible approach to bridging the digital divide. At this point, municipalities may still make use of MBI grants to develop their own networks, but the state has also opened the door to private sector partnerships and a range of technologies.
The MBI in November solicited proposals from private contractors to build "last mile" networks in up to 40 unserved communities, requiring 96 percent coverage and broadband speeds as defined by the Federal Communications Commission. Charter was one such company to respond, seeking $5.1 million to serve Princeton, Shutesbury, New Salem, Egremont, Hancock, and Monterey with a hybrid fiber-cable network.
A separate proposal from Comcast would build cable networks in Goshen, Montgomery, Princeton and Shutesbury for $2.2 million. That proposal is still pending before MBI. In its latest policy revision, the MBI encourages corporate network ownership.
"Whenever possible, towns should look to financially established, private sector partners with demonstrated experience in the residential broadband market for broadband solutions without municipal ownership of the broadband assets," the September 2016 policy states.
Private ownership and management "would remove the significant financial and administrative burden of owning and operating a broadband network," the policy goes on to state. Shutesbury's Broadband Committee has long been critical of MBI, saying the agency has been the source of "frustrating delays and policy changes" that have stymied the town's attempts to build a "future-proof" fiber network. MBI's move to fund corporate-owned networks "contradicts their original insistence that towns own the networks they build," Shutesbury officials wrote in a handout. "They do endorse private companies owning it instead."
However, a spokesman for MBI said there's not as stark a contradiction as Shutesbury suggests, as both policies seek to protect the town's long-term financial sustainability. Under current policy, while public dollars would be used for a one-time incentive to a private provider to construct and own a network, the towns themselves would not be on the hook for any long-term borrowing on that network, said Brian H. Noyes, the institute's communications director. The WiredWest proposal rejected by MBI would have had states and towns fund construction of a network, and the town would be on the hook for 20-30 years of debt payments, yet wouldn't own the network, said Noyes in an email.
When the town of Otis dropped out of WiredWest in 2015, its leaders emphasized that flaw. "If the town has to kick-in $3.7 million we should own the asset," said Town Administrator Chris Morris. Shutesbury did welcome as "good news" a recent announcement that MBI would release design and engineering "professional services" grants to towns that wish to pursue their own broadband solutions. If Shutesbury builds fiber, it would not be alone. Neighboring Leverett pioneered a municipal fiber network several years ago. Alford and Otis in Berkshire County decided to build municipal fiber networks with MBI construction grants of $288,775 and $1,145,975.WiredWest may yet play a role, as it now proposes to act as a regional network operator for towns still interested in the cooperative approach.
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