Local Video
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| Stimulus fizzles for fiber optics |
By: JIM HAMMERAND, Staff Writer
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Posted: Tuesday, July 14, 2009 9:57 pm
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NORTHFIELD — City Hall will likely abandon its pursuit of stimulus funding for a citywide fiber optic communications network, a city official said this week.
New rules and requirements for the $3.4 billion in federal grants available for high-speed infrastructure all but rule out Northfield as a recipient, said Information Technology Director Melissa Reeder, calling the development “very disappointing.”
She said the focus will now shift to securing revenue bonding — paid down by forecasted profits — or federal, Rural Utility Service loans directed toward small cities.
The latter would require implementation within two years of the loan’s approval and adherence to other stipulations. City Administrator Joel Walinski said communities tend to “shy away” from that program for those reasons.
“They find it easier just to go out and bond for it,” he said.
Interest rates on the bond market would likely depend on investors’ interest in tech infrastructure.
Building a broadband network that services cable, Internet and voice would cost the city about $23 million on its own or $15.8 million with a partner company that can provide equipment and cut down on start-up costs. Some estimates have the network paying for itself after five years.
“We need to circle the wagons and see what the council’s appetite is for pursuing loans,” Reeder said, adding that the project would not increase local taxes.
One requirement for the federal fiber optic grant centered on populations whose communications needs are considered underserved. That’s determined to be true when less than 40 percent of a census block is connected to the Internet at 3 megabytes or faster.
“We’d have to literally knock on doors to find a block that qualifies. Honestly, I don’t think there’s a single Minnesota city that would qualify,” Reeder said.
In Northfield, Reeder said, that figure exceeds 70 percent, though she stressed that the benchmark speeds would fall well below the needs of businesses that the city would like to attract with a citywide fiber optic network.
“If we could offer broadband in record speeds, that would put us way in front,” Reeder said.
City Administrator Joel Walinski said the federal grant requirements could change to allow cities like Northfield if enough are ineligible.
“This is the first round. Both of the individuals that we spoke with that spend more time looking at grant requests and the whole broadband funding mechanism, both felt that very few communities are going to qualify for those grants,” he said.
Though visibly disappointed by the news, City Council members briefed on the development said they were still comfortable continuing negotiations with an unnamed company interested in partnering with the city.
Council member Kris Vohs said forging ahead with the project, even without a partner or stimulus funding, would fulfill city goals and provide an additional revenue stream.
“It’s such a stimulus for what were trying to do economically,” he said. “I think we’d find between year five and 10 that we’re real well off to be doing it.”
— Jim Hammerand covers the city. He can be reached at jhammerand@northfieldnews.com or 645-1114. |
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