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My Turn/Dvore: MBI stance makes little sense

  • DVORE



Sunday, December 04, 2016

MBI was initially funded and created by emergency legislation in 2008 with a mandate to bring broadband internet service to all unserved communities.

The recent Municipal Modernization act says: “each secretary of an executive office shall evaluate all grant, loan, and technical assistance programs administered under their office for opportunities to promote, facilitate and implement inter-municipal cooperation, collaboration, and regional service delivery at the local level.”

And further: “Any executive agency that administers a program through which funding may be provided to municipalities, where regionalization may be feasible, shall encourage municipal efficiencies by prioritizing those applications for funds which come from municipalities that have developed a method by which to jointly and more efficiently utilize such funding.”

Experts who have looked at this, e.g. The Berkman Case Study of WiredWest and CTC report (available on wiredwest.net), even MBI’s own technical staff, have all recommended a regional approach as the most efficient and cost-effective way to make broadband available to the maximum number of communities.

Yet, despite all this, MBI resists this and encourages towns to either accept having their allotment of state funds spent on a network owned by a monopoly private company, or else to build and operate an independent network. MBI has refused multiple offers by WiredWest to work on a regional plan that would allow many towns that cannot manage the cost and complexity of an independent network to move forward. MBI does not seem to understand that many towns cannot commit funds to a construction project without a regional operations and maintenance plan to make it sustainable. So far, they offer no other solution for these sparsely populated towns.

Some basic facts:

About 15 or so unserved towns that want to build fiber networks are too small to sustainably operate a network on their own. The fixed costs divided among too few potential customers makes the cost prohibitive. Another 10 to 15 of the more densely populated unserved towns want a regional network and see it as highly advantageous, though not necessarily required in their case.

If you combine those towns into a regionally operated network, then it becomes affordable and sustainable for all. Cost averaging brings the necessary subscriber price down dramatically for the sparser towns, economy of scale brings it down for all, and all the towns benefit from not having to individually hire vendors and manage the networks. There are additional benefits such as increased resilience, reduced risk, and a larger pool of qualified people to manage the network.

If private partners cherry pick the denser towns, which they are already doing with MBI’s urging and are encouraged to do more of by their recent RFP, then there may no longer be enough population density in the remaining towns to make a regional fiber network operation feasible.

The recent Private Partnership RFP that MBI released allows proposals for networks in “one or more municipalities.” They say they will give priority to proposals that cover more towns, but do not require it. Anyone who understands the economics of broadband networks knows that private companies will see this as an opportunity to get state money to cherry pick the most profitable towns, leaving behind the less profitable, more sparsely populated towns.

MBI apparently has an institutional bias against WiredWest that is impairing the ability of some unserved towns to make progress toward a broadband solution. The Governor and EOHED should intervene and direct MBI to work cooperatively with WiredWest on a regional operational plan available to all towns that want it. Better yet, the EOHED should invite WiredWest to discuss directly with them about the advantages and opportunities for a regional approach.

David Dvore is chairman of the Rowe Broadband Committee.