The small town of Windsor is joining the list of communities in western Massachusetts who are taking measures to improve local connectivity with publicly owned Internet infrastructure. The town of fewer than 1,000 people anticipates connecting all residents and businesses before the end of 2019.

Grants Are So Good

Windsor is benefitting from a grant of more than $886,000 from the FCC Connect America Fund, to be distributed over a 10-year period. Six other Berkshire County communities will also receive funding from the FCC; Westfield Gas+Electric (WG+E) applied for the funding on behalf of the region’s communities. In total, the seven towns will receive more than $2.45 million during the next decade to improve local broadband. The Westfield utility has been working with its neighbors in recent years in different capacities, including as an ISP, network operator, and as consultants.

Community leaders originally estimated Windsor’s planned Fiber-to-the-Home (FTTH) network would cost approximately $2.3 million. Select Board Member Doug McNally said that the community may use the award from the FCC to help pay down debt to deploy the network or may be used directly to help residents who have long driveways, requiring more individual investment to connect to the town’s network.

Windsor also received approximately $830,000 from the state in 2017 and previously approved borrowing to fund deployment. Windsor had planned to work with the WiredWest cooperative, until the Massachusetts Broadband Institute (MBI) put up several hurdles that interfered with the cooperative’s ability to realize their business model. WiredWest has revamped what it plans to offer member towns and, according to McNally, Windsor may contract with the co-op for Internet access and operate the network.

If Windsor chooses WiredWest, subscribers could choose between symmetrical packages of 25 Megabits per second (Mbps) for $59 per month or 1 gigabit per second for $75 per month. Voice service would cost an additional $19 per month. All subscribers also pay an additional $99 activation fee.

In early December, the city of Cortez, Colorado, released a request for proposals in their search for a private sector partner to help bring last mile fiber connectivity to premises throughout the community. The city is seeking a way to bring high-quality Internet access to the entire community, but will not expand it’s municipal fiber infrastructure. They're looking for ways to overcome some of the same challenges other small communities face as they attempt to improve local connectivity to every premise.

At A Crossroads

Smith told us that the city is at a crossroads and community leaders think that a public-private partnership (P3) might be the quickest way to get the people of Cortez better services they’re looking for at the affordable rates they deserve. The city faces the challenge of funding the expansion. Approximately $1 million from the Colorado Department of Local Affairs (DOLA) funded the Cortez middle mile infrastructure and connections to community anchor institutions (CAIs), including schools, healthcare facilities, and municipal facilities. Cortez is not able to obtain more grant funding from DOLA for last mile expansion.

As interest in publicly owned broadband network infrastructure increases, local communities seek out new ways to fund municipal networks. Revenue bonds, interdepartmental loans, and avoided costs have been the three most common methods for funding Internet network infrastructure, but local leaders are finding creative approaches to get the job done. The Creative Funding Sources For Fiber Infrastructure fact sheet presents new approaches, pros and cons, and provides examples for further study.

Download the fact sheet.

New Approach to an Ongoing Challenge

Communities that need better connectivity must consider numerous factors when fiber optic network infrastructure is on the table. In addition to the type of model that’s most appropriate, decisions include vendor selection, and the extent of the network footprint. A critical element to every community network are the choice of funding mechanisms local leaders choose to see the project from idea to implementation.

Communities such as Ammon, Idaho, and Kitsap County in Washington are using fresh ideas to fund their infrastructure development. In this fact sheet we describe the way these new mechanisms work and lay out some benefits along with some potentially negative implications. It’s important that communities take a frank look at all the possible repercussions as they move forward. 

This fact sheet will help your own creative funding ideas flow as you look for ways to finance your community’s high-quality Internet access project.

Download the fact sheet.

Earlier this summer, we talked with Jase Wilson and Lindsey Brannon from Neighborly, the investment firm that uses online investing to allow individuals to invest in publicly owned infrastructure projects, including broadband networks. Jase and Lindsey described a program they had just launched, the Neighborly Community Broadband Accelerator. 

A Boost for Local Broadband

The program is designed to help local communities with necessary tools and financing from the start of their project planning. The Accelerator will provide mapping and community engagement tools, help from experts who will share best practices, and access to industry partners, such as ISPs and engineers. In addition to these and other information perks, communities accepted to the program will have the benefit of Neighborly financing at a competitive, below industry rate cost.

Applications were due by September 28th and more than 100 applications indicate that, more than ever, local communities are interested in taking action to improve connectivity. These 35 communities were accepted into the Broadband Accelerator Program:

For many rural Americans, the local electric or telephone cooperative is their best hope for finally obtaining modern-day connectivity. With the support of government funding, rural cooperatives have brought electricity, telephone service, and more recently broadband access to some of the most rugged and sparsely populated places in the country.

However, recent tax code changes might prevent co-ops from connecting more rural communities. Cooperatives could potentially lose their tax exempt status if they accept government grants for broadband expansion and disaster recovery — an unintended yet foreseeable consequence of the Republican “Tax Cuts and Jobs Act” passed late last year. In a press release, Senator Tina Smith called attention to the oversight, noting, “This uncertainty has caused cooperatives significant concern and frozen some of their grant applications.”

Who’s Ready for Some Tax Policy?

As nonprofit membership corporations, rural electric and telephone cooperatives are exempted from paying taxes under section 501(c)(12) of the Internal Revenue Code (IRC). To maintain this tax exempt status, cooperatives must derive at least 85 percent of their income from members (e.g., from selling electricity). This is sometimes referred to as the the member income test or the income source test.

Breckenridge was among the list of Colorado communities that voted to opt out of the state’s restrictive SB 152 back in 2016. Now, they’re ready to move forward with design and construction of an open access network. As the resort town prepares to begin work on their fiber infrastructure, several other communities will ask voters to opt out of SB 152 on November 6th.

To the Voters

As we reported in August, Aurora, Cañon City, the town of Florence, and Fremont County had already made plans to put the opt out question on their local ballots. Since then, we’ve discovered that that at least six other local governments want voters to address SB 152.

In Salida, where the town needed to fill a vacated office without delay, community leaders chose to hold their election in September and put the issue on the ballot. The measure to opt out passed with 85 percent of the vote.

Voters will also decide of their towns or counties should reclaim local telecommunications authority in the towns of Fountain and Erie along with Chaffee County and Kiowa County. Over the past several years, more than 120 local communities have asked voters to opt out of SB 152 and local referendums overwhelmingly passed. Many local communities have presented the issue to voters with no specific plans in mind, but do so in order to keep their options open and because they feel that Denver is less qualified than they are in making decisions related to local connectivity.

The Fremont Economic Development Corporation (FEDC) has reached out to voters, urging them to approve the measure with a "yes" vote. The fact that SB 152 still hangs like cloud over the region prevents them from obtaining grant funding to boost economic development.

In episode 320 of the Community Broadband Bits Podcast, aired on August 28th, we shared news about an opportunity regarding funding local Internet network infrastructure. Jase Wilson and Lindsey Brannon of Neighborly announced that the online investment platform had recently launched the Neighborly Community Broadband Accelerator. Applications to participate in the program close on September 28th, so we want to encourage local communities, Internet Service Providers, or community advocates interested in new ways to develop better local connectivity to check out the program.

More Than Money

For a quick recap, Neighborly is a technology company that provides an online investment platform to give individuals and entities the ability to invest in projects funded with municipal bonds. The projects are publicly owned and centered on improving the quality of life on the local level. Project areas include transportation infrastructure, schools and libraries, housing, and utilities. The accelerator program specifically aims to help local communities develop their own open access municipal networks to improve connectivity and encourage competition for broadband on the local level.

As Jase and Lindsey described in our interview, the numerous moving pieces associated with developing a fiber optic municipal network create a layered and complex project; a key element is financing. While it’s often left as a later consideration — one that makes or breaks the project — chances of success improve when community leaders address funding early and throughout projects development. 

One of the goals of the Accelerator Program is to help local communities interweave funding throughout the process. The program also provides additional resources throughout the process to help ease broadband network development. Applicants accepted to the program pay no fee and receive:

Shortly after Republican FCC Commissioners repealed federal network neutrality protections late in 2017, state lawmakers began introducing legislation to protect their constituents. California’s AB 1999, introduced as one possible antidote to the FCC failure in judgment, passed the General Assembly on August 29th and is on its way to Governor Jerry Brown.

Read the final version of the bill and the Legislative Counsel Digest here.

Let the People Serve the People

As local communities have investigated ways to protect themselves from throttling, paid prioritization, and other activities no longer banned, they’ve looked at investing in publicly owned infrastructure. Rural communities where national Internet service providers are less motivated to deploy have always struggled to attract investment from the same large companies known to violate network neutrality tenets. Assembly Member Ed Chau’s AB 1999 addresses rural communities’ need for better connectivity, solutions that can preserve network neutrality, and challenges in funding broadband infrastructure.

California’s community service districts (CSDs) are independent local governments created by folks in unincorporated areas. CDSs provide services that would otherwise be provided by a municipality. Residents usually join together to form a CSD and do so to establish services such as water and wastewater management, garbage collection, fire protection, or similar services. A CSD also has the ability to create an enhanced infrastructure financing district (EIFD) in order to finance the development of a broadband network.

The EIFD statute granting the authority allows communities, including CSDs, to join together regional projects for a range of financing purposes. Tax Increment Financing (TIF) and various bonding mechanisms are a few examples.

People and businesses in the small town of Hermann, Missouri, primarily rely on slow DSL for Internet access. There are also a few areas with cable connections available, and even a few parts of town where no ISPs offer service. This month, community leaders took decisive action to bring another option to town — they adopted a resolution to pursue federal funding for a publicly owned fiber optic network.

Let the People Decide

Late last year, Mayor Robert Koerber proposed a spring non-binding referendum to determine how strongly Hermann voters wanted to invest in the project. At the time, the Board of Alderman were considering a bond issue to cover the cost of deployment, which they estimated at $2.6 million. 

Koerber thought that a strong outcome in support of the project would help attract financing when it was time to begin the project. He also considered the issue something voters should weigh in on, due to the bonding question.

The Board of Alderman supported the idea, but other town matters, including finding a new tourism and economic development director, required immediate attention. Town leaders also decided to look for some one who could help educate the community about the pros and cons of the fiber optic project. Rather than move forward with the referendum town leaders decided in January to put off any vote for the time being.

Pursuing Funding

Prior to their mid-August Board meeting, Alderman in Hermann had the opportunity to meet with representatives from the USDA to discuss other funding possibilities. They determined during those conversations that they could apply for funding from the Rural Utilities Service, which us under the purview of the USDA, for loans to deploy the network. Deadline for their loan application is September 30th.