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Panel taps Magellan to lay foundation for Connect Superior

If approved by the city council March 15, the company will verify the feasibility of the project, do the high-level design, develop a business plan, acquire customers for the network and seek internet service providers and grants to help pay for the project.

Fiber-optic internet.jpg
(Getty Images)

SUPERIOR — Connect Superior could be moving forward with the next phase of developing a citywide fiber optic network.

The city’s communications and information technology committee is recommending the city council approve a bid from Magellan LLC to verify the feasibility of the project, do the high-level design, develop a business plan, acquire customers for the network and seek internet service providers and grants to help pay for the project.

The cost for Magellan's services would not exceed $449,754, according to the bid submitted to the city . Early estimates put the total cost for the broadband network around $31 million. The city council has already allocated $5 million in American Rescue Plan Act funds toward the project.

"The decision we're asking you to make is a fairly significant one," Mayor Jim Paine said at the committee meeting Monday, Feb. 28. "It takes us from a conceptual stage of Connect Superior to the start of the actual project happening."

Paine said the scope of the project being considered is smaller than the city’s request for proposals sought, which included construction of the network. Magellan was prepared to do the full scope of work.

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An internal committee made up of the mayor, Council President Tylor Elm, contracts analyst Jane Darwin and information technology director Dan Shea reviewed the proposals and decided to limit the scope of the work to what was necessary before actual construction begins, Paine said.

"It's nice to know that we have someone who can take us all the way through the project if we chose," Paine said. "We don't have to make that decision, at least not right now. This is only phase one."

Magellan provided one of two bids received by the city. EntryPoint Networks, which developed the city’s master broadband plan, submitted the other.

"I think our group was impressed right out of the gate with Magellan," Paine said. "There was a phrase that stuck in my head from the beginning. They describe themselves as a turnkey partner. They can get started, do everything we needed to do immediately. We didn't have to hire some staff. We didn't have to hire some outside consultants. They were ready to go. They also had the references ready to go. They had an extensive list of clients for whom they had built networks … many types of networks."

Unannounced to Magellan, Paine said he and Elm looked through Magellan’s list of clients for a project similar to the one proposed for Superior and investigated it independently by flying out to Hillsboro, Oregon.

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"The city really rolled out the red carpet and showed us every aspect of the network," Paine said.

One of the challenges Hillsboro had was its low take rate, but the city deliberately started in the least connected neighborhoods, where they knew the take rate would be low, Paine said.

John Honker of Magellan said Hillsboro has been operational for about two years, has reached about 10,000 homes so far, and is starting construction of its next phase.

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"After COVID, there was a huge surge for increasing their penetration," which accelerated the pace of construction, Honker said.

Hillsboro is a city of 106,447 with 42,363 housing units, according to the U.S. Census Bureau.

"We walked through downtown to see how they were connecting businesses," Paine said.

They met a computer service technician there that was pushing for businesses that need high speed data to get on the municipal network, however stores and retail outlets were taking it as soon as they get it, Paine said.

"Businesses were incredibly excited on saving that kind of time," Elm said of the faster network being built in Hillsboro.

"With the passage of two major pieces of legislation, ARPA, the American Rescue Plan Act, and the infrastructure bill both have significant opportunities for grants for broadband projects like this," Paine said. "The council has already dedicated $5 million in ARPA funds toward this project."

Paine said one of his goals is to get as much grant funding as possible for the project to make it more affordable.

Honker said Magellan has a team that does nothing but broadband grants and will work with the city to optimize its chances of getting grants.

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The committee unanimously recommended the Magellan bid.

The bid heads to the city council March 15 for consideration.

Shelley Nelson is a reporter with the Duluth Media Group since 1997, and has covered Superior and Douglas County communities and government for the Duluth News Tribune from 1999 to 2006, and the Superior Telegram since 2006. Contact her at 715-395-5022 or snelson@superiortelegram.com.
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