Monticello hopes private company can help struggling municipal broadband

Monticello broadband
The Monticello city council is charting a new course for its financially struggling broadband network. Monticello is one of the first Minnesota cities to build its own network. The city has been held up as a model for other municipalities and counties that want to improve their Internet connectivity and speed.
MPR photo/Conrad Wilson

A new company will run a financially struggling, municipally-owned broadband network, the city of Monticello decided Monday evening.

The Monticello City Council voted unanimously to bring in Gigabit Squared, of Cleveland Heights, to conduct a 90-day study of the publicly-owned broadband network, called Fiber-Net, and will run it for at least the next six months.

The council vote is the first step forward for the project after a series of recent setbacks.

Last week, the city stopped making payments on $26 million in bonds used to build its network. Earlier this month a Winona-based company called Hiawatha Broadband Communications that operated Monticello's network from the start, announced it was dissolving its partnership with the city.

But, following the city council's vote last night, city officials seemed more optimistic.

"There's a good opportunity to reconfigure the debt so that it can be a viable entity," said Jeff O'Neill, the Monticello city administrator. "The city has a chance to continue with the route it's been on to provide fiber net services to the community and to come up with a plan to allow it to not only create choice in the marketplace, but also be financially viable and to have costs meet expenses," O'Neill said.

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The city of Monticello is one of the first communities in the state to build its own network and has served as a model for others that want to improve their Internet connectivity and speed.

However, the broadband network has been operating at a loss. Since the city started delivering Internet, cable and phone service to residents in 2010, it's been hurt by more competitive pricing from private telecom companies than city officials anticipated.

Prior to last week's meeting some industry observers said the fall-out from Monticello could make other communities interested in their own broadband networks reconsider.

But the city's new operator appears committed to making the city's network pay for itself.

Mark Pultusker is the primary technician from Gigabit Squared who will be working on the Monticello project. He says the company is looking at the project not through a management lens, but rather a partnership.

"We actually aren't a management company, we're totally different," Pultusker said before the council. "We are looking a FiberNet as if it's our system; not a system that's to be managed. What would we do if we owned FiberNet? How would we try and economize, make the best return on investment?"

Pultusker said Gigabit Squared also has the financial resources to help the system grown if there's a need.

"If we can show there's additional demand for additional services that aren't being provided, if there's a demand from surrounding communities that can justify using the facility the city has built ... if we deem there's sufficient demand to do that and it would require some investment we would invest those sums of money to do that," Pultusker said.

Prior to Monday night's council vote, O'Neill said he was less concerned about who owns the broadband network than he was with the impact it had in creating competition that ultimately resulted in better services and lower prices for business and residents in town.