Community Built Network Saves Local Jobs in Princeton, Illinois

Kudos to Richard Downey, Village Administrator for the Village of Kronenwetter in Wisconsin. Mr. Downey reminded us that we have yet to write about the fiber network in Princeton, Illinois. While we have noted Princeton in our list of economic development successes, we haven't delved into the network that serves the city, the schools, and the business community.

Princeton is home to about 7,500 people and is located in the north central region of the state in Bureau County. They have their own electric, water, and wastewater utilities and began offering broadband connectivity in late 2003. We spoke with Jason Bird, Superintendent of Princeton Electric Department, who shared the network's story with us.

In 2003, the city’s largest electric and water consumer was also the largest employer. At the time, incumbents served the community with T1 connections. The manufacturing company moved to Mexico, taking 450 jobs with it. The community was stunned.

Approximately 6 months later, Ingersoll Rand, the community's second largest employer with about 300 jobs, also considered moving away from Princeton. While lack of needed broadband was not the only reason, the Ingersoll Rand CEO let community leaders know that it was one of the influential factors. The company liked being in Princeton, and the city would have been on the top of the location list if not for the sad state of connectivity. At the time, the only commercial option was unreliable T1 connections for $1,500 - $2,000 per month. If Ingersoll Rand moved, the community would experience job losses equal to 10% of the population. Community leaders needed to act and do it quickly.

To retain Ingersoll Rand, the City Council decided unanimously to go into the telecommunications industry. They issued an RFP and encouraged incumbents AT&T and Comcast to bid; neither were interested. (Interestingly, once Princeton let it be known that they were going to build the network without them, there were some local upgrades from both companies.)

IVNet, located in Peru, Illinois, won the bid to manage and provide retail services over the network. Construction began immediately with employees from the electric utility doing the actual construction on the initial 12 miles of fiber backbone. Ingersoll Rand was connected to the fiber network eight weeks later and is still a customer. The company pays around $500/mo for 3 Mbps and has made a $6 million investment in their facility, also contributing to the local economy.

Map of Illinois showing Princeton

Like many other municipals offering fiber connectivity, Princeton did not want to offer retail services directly. The utility did not want to risk its excellent customer service reputation by biting off more than it could chew so it forged a partnership with IVNet. IVNet also runs Connecting Point Computer Centers. Fees from fiber customers are split 50/50 between IVNet and Princeton.

Princeton now has 75-78 commercial customers and most banks in town are connected with fiber. While Bird does not point to the broadband utility as the only factor in bringing in new employers, he credits its presence, along with the fact that it is offered by an electric utility, as attractive for potential employers.

Local schools are saving money and achieving twice the capacity that they received from private providers. Bird estimates the schools were paying $350/mo in 2003 for speeds up to 3 Mbps from the private sector and now pay $200/mo for 6 Mbps with Internet service provided by IVNet. The local hospital uses the fiber network for its 10 Mbps connection. Princeton also provides free wireless at hotspots in town, including the Amtrak Depot and a local city park.

The network has now expanded to over 30 miles with a second loop, creating a figure 8. The fiber network is 80% aerial with 20% underground. Princeton now buries conduit as a matter of course whenever there is any digging or development. Points-of-presence (POPs) are located in the police department, the high school, and the power plant facility.

While fiber-to-the-home is provided on a request basis, most customers are commercial and industrial. New customers can be connected in 2-3 days. Bird told the story of a NASA scientist whose wife grew up in the Princeton area and who wanted to work from a home office in Princeton. He now has a 3 Mbps capacity connection and a secure server located near a POP.

The city paid for the initial fiber network through a loan from the electric utility to the telecommunications division of the utility. The loan was then reimbursed in full with a $350,000 grant received from the state of Illinois.* The larger, present network has also been paid off for some time and is fully sustainable. Connectivity fees pay for operation and maintenance and usually there is a little left over every year, which goes back to the electric utility’s cash on hand. They have plans for their network to join the gigabit club. Bird says the community has applied for a grant from iFiber, a collaborative administering a $6.8 million BTOP grant to earmarked for northern Illinois. If Princeton receives the award, upgrades will come much quicker.

Bird says the city's network is successful because there is no worry about returns for stockholders. The City considers its stockholders to be people in the community. The  goal is not to maximize profits, but to give the community what it needs at a reasonable price.

Bird recalls testifying in front of the State Commerce Commission when Illinois considered legislation that would limit municipalities’ ability to provide telecommunications services. He was asked why he thought municipalities should be able to offer the service and replied that it was not a new idea and that municipalities have been filing gaps left by the private sector for many years. Bird emphasized that is it a different model, focused on customers rather than profit. He recalls being seated between representatives from AT&T and Comcast and remembers that “they didn’t like that answer.”

Photo courtesy of ILPlanner, used under Creative Commons License. Map from Wikipedia.

* Postscript: We spoke with Jason Bird to get more detail on the grant Princeton received from the State of Illinois. He told us that the state grant came from the Illinois Commerce Commission (ICC).

Princeton applied for the digital inclusion grant before they began building the network as a way to pay for the infrastructure. There was significant delay at the ICC in determining award recipients, and Princeton had to act against time to preserve Ingersoll Rand. Rather than wait indefinitely, the City Council decided to transfer $350,000 from the electric utility to the telecom division so construction could begin. City leaders agreed to use the grant to repay the loan from electric to telecom if it was awarded to Princeton.

According to Bird, Princeton is the only grant recipient to have completed its project.