Superior has a master plan to build a city-owned fiber optic network.
The city council voted 8-2 Tuesday, Aug. 17, to adopt the plan developed by EntryPoint Networks of Salt Lake City, Utah.
Councilors Brent Fennessey and Keith Kern voted against the plan.
“I’m planning to vote no for this tonight, not because I’m against fiber,” Fennessey said. “I don’t think the city should be shouldering 100% of the risk.”
He said that risk would be 12 times greater than the Kestrel Aircraft deal, in which city taxpayers ended up footing the bill for a $2.6 million city bond Kestrel was committed to repay.
“With Kestrel, they didn’t have a plane approved by the FAA,” council President Tylor Elm said. “The citizens of Superior are not taking on 100% of the risk. The users who sign up for this are. This is grant funding that is available through the feds.”
Elm said adopting the plan is only an incremental step forward.
The plan outlines the steps the city should take if it decides to build a municipal fiber optic network where internet service providers could openly compete for users’ business. It includes a market analysis of existing broadband infrastructure, plans to engage the community, operation models the city could consider, cost analyses for building and maintaining the network and identifies the potential risks.
“I chose to come here and speak in favor of this because the model is right,” said Patrick Malley, owner of Duluthian Networks, an internet service provider that consults on broadband connectivity. “The role of government — I believe the sole role of government in my opinion — is to provide infrastructure that would otherwise not feasibly be obtained through private business.”
Malley said the cost of building the infrastructure is the biggest barrier to competition in the Duluth and Superior markets.
“The fact is it’s expensive to put fiber infrastructure in the ground, but it is the longest lasting and has the longest, the best longevity of any infrastructure investment that could be made in communications,” Malley said.
Cost was a concern for councilors who voted in favor of the plan that estimates the cost of building out the network at $31 million.
“I am very concerned about the cost,” Councilor Jack Sweeney said. “We have to have some exits and some expertise to look at this independently … We have to do our due diligence.”
He said costs should be analyzed for construction and maintenance of the network to ensure the project is viable.
“I do support broadband, but I do have concerns with the funding,” Councilor Craig Sutherland said.
He said he didn’t see a problem with moving ahead with the plan, which is not yet funded.
Councilor Jenny Van Sickle asked the mayor to address allegations she’d heard that the project would jeopardize the city’s bond rating or ability to bond in the future.
“I don’t foresee this having any effect on our bond rating,” Mayor Jim Paine said. “I don’t foresee a need to bond for this project. There’s enough federal grant money to fund the whole thing.”
Paine said American Rescue Plan Act revenue could get the project started and draw revenue to build out the network.
“The lack of expansion, the lack of competition, the lack of reach, the high cost, low speeds and use of antiquated technologies are all reasons why we need to do this,” Elm said. “Providing fiber with near limitless speeds paired with the automated open access model will be truly bringing Superior into the 21st century.”