Joint Broadband Committee 2018 Spring Update

 Progress on the Wendell Broadband project is picking up speed. Since our winter update, we have passed several important design milestones and become aware of new potential sources of funding. A number of aspects of the project remain to be finalized, but at this point we have a clear idea of what information is needed in order to do so. Current projections show the network going live in September 2019.

Design and Make Ready

 
With our pole survey completed early in the new year, our partner WG&E (Westfield Gas and Electric) has been working on a detailed design for the network. The first stage of this design, the strand map, is now complete. The strand map shows the path that fiber will take from the central electronics hub (to be located behind the town office building) to as many potential broadband customers as possible. We were able to find a route that passes by all except 3 residences in town. In addition, the construction committee worked with assessor’s maps to identify an additional 377 possible future building sites. Sufficient spare fiber will be included in the design to service these locations.
 
With the strand map in hand, WG&E created a list of the 1460 poles we will be using to hang our fiber. The utilities rent space on their poles for $13/year/pole. The next step is to apply to Verizon and National Grid to do “make ready” work on the poles to ensure that there is sufficient space for additional cables. In some cases the poles are ready to go as is, while in others existing wires may need to be moved to provide a minimum 12” spacing. In cases where there is simply not enough space or the pole is incapable of supporting additional conductors, the entire pole may have to be replaced. All of this work is done at our expense and is the single biggest cost of the project (MBI (Massachusetts Broadband Institute) estimated $440,000 for 1100 poles). We have just submitted our pole license applications and are waiting to hear back from the utilities about what they are going to charge to prepare the poles for construction. We have 45 days to approve and pay these costs, after which time the utilities will start their work.
Make ready work is likely to continue into 2019.
 
Costs and Funding
 
One of the most frustrating and challenging aspects for the committee has been determining exactly how much this project is going to cost - both in terms of capital construction and monthly subscriber fee. MBI’s original high level estimate for design, make ready and construction of the network was $1.9 million, with the town qualifying for $730,000 in Last Mile state grants. Initially, all cost overruns for the project were to be borne by the town, which is why we used the full $1.9 figure for our debt authorization vote in 2014. Good news came in the form of recently passed MA House Bill 4015, allocating an additional $45 million in Last Mile Broadband funds. Details on the exact mechanism for dispersing these funds have yet to be finalized, but we have been assured that funds will be available to cover overruns from the original make ready estimates provided by MBI. This is good news since, for example, Shutesbury recently found out that their actual make ready costs are going to be more than double the original MBI estimate.
 
Getting more accurate figures does not come cheap. A firm price for make ready costs from the utilities, for example, is only available by paying a non-refundable pole application fee of roughly $150,000. Similarly, updating our construction cost estimate requires the completion of a $45,000 design. Fortunately, both of these expenses will be paid out of our state grant money. Wendell’s contribution to the project will only begin once our state funding has been exhausted.
 
We received the first disbursement of $320,000 from EOHED (Executive Office of Housing and Economic Development) earlier this year with the rest forthcoming once we reach certain milestones around make ready work. At the request of EOHED, the committee is also working with the town treasurer to establish temporary borrowing in the event that make ready bills come due before our next EOHED funding disbursement arrives. Having this money available, however, will ensure that the project continues without interruption.
 
In other good news developments, the FCC recently announced a competitive bidding process through the Connect America Fund (CAF-II) to provide financial assistance for rural broadband projects. WG&E submitted an application to bid for this money on our behalf. Bidding takes places at the end of July in the form of a reverse auction. Depending on the outcome of the auction Wendell is eligible to receive up to $115,000 per year for 10 years.
 
The committee is working with the WG&E design team to minimize construction costs where possible. Any savings here will directly reduce the debt burden for the town. A sub group of the committee participates in a bi-weekly conference call with WG&E staff to provide input on the design process. The consultants at HG&E (Holyoke Gas & Electric) are also available to help with pruning costs. Interestingly, it appears that certain aspects of our build will come in cheaper than what Leverett paid for theirs some years ago. As fiber becomes more mainstream, new technology and construction efficiencies are driving prices down.
 
Drop Policy
 
Another highly variable cost of construction is associated with the service drops which run from the public roads to individual houses. In the next 2 months or so we hope to be able to assign an exact cost for running these service drops to every house in town. The committee is waiting for this information before determining how much of the drop cost to assign to the individual subscriber and how much to pay out of general construction funds.

Please note that in any case, the cost of connecting to the network will rise significantly if a resident does not take service during the 2019 construction period when trucks and crews are already mobilized in town. Post-construction hookups in Leverett, for example, currently cost in excess of $2,000.

Monthly Service Cost
 
We understand that residents are anxious to hear exactly how much internet service will cost monthly as well as what their tax burden will be. We will have a better sense of what the amount will be once the material and construction bid process is completed. A further factor in determining the rate is how much, if any, of debt service (construction) costs are added to monthly subscriber fees. Adding a debt service charge will reduce the potential property tax increase by a corresponding amount, addressing concerns of non-subscribers. Finally, if we are successful at securing CAF-II funds, these may be used to offset property tax increases, subscriber fees or both.
 
Wired West Cooperative or Stand Alone Model
 
At some point before the network goes live, we will need to make a choice about ISP (internet service provider) and network operator. Wendell’s MLP signed an MOU (memorandum of understanding) with Wired West in January, expressing our intention to work toward an agreement with them to operate and maintain our network once it has been built. The committee continues to honor concerns brought by individual committee members, professionals, and residents, and while some are convinced that contracting with Wired West is not the best choice, the majority of the committee is leaning toward that solution. As part of our due diligence, in April the Committee hired Holyoke Gas & Electric on a consulting contract to make a full comparison of the Wired West regional cooperative model with a standalone approach like Leverett. They were also asked to evaluate the assumptions used by Wired West in making their projections. The report uncovered several areas where more clarity with the Wired West model is required, but the overarching conclusion was that contracting with Wired West may afford Wendell efficiencies and cost savings over the long run. We are at least 6 months away from needing to make a decision on this front and will continue to evaluate all options.
 
Future Broadband Forums
 
Wendell residents are encouraged to attend our meetings, generally held on Tuesday evenings at the town office building (dates and time are posted to the right on the website's calendar as well as on the town list serv.) However, we understand that these meetings may not work for all residents. The committee will schedule an information forum to share information and recommendations around total construction costs, operator/ISP choice and monthly subscriber fee as soon as that information becomes available.
 
Questions and comments for the committee can be sent to: