Comcast rejected by small town—residents vote for municipal fiber instead
Comcast offered to wire up Charlemont, Mass. for $462,000—town said, "no."
JON BRODKIN - 12/11/2018
A small Massachusetts town has rejected an offer from Comcast and instead plans to build a municipal fiber broadband network.
Comcast offered to bring cable Internet to up to 96 percent of households in Charlemont in exchange for the town paying $462,123 plus interest toward infrastructure costs over 15 years. But Charlemont residents rejected the Comcast offer in a vote at a special town meeting Thursday.
"The Comcast proposal would have saved the town about $1 million, but it would not be a town-owned broadband network," the Greenfield Recorder reported Friday. "The defeated measure means that Charlemont will likely go forward with a $1.4 million municipal town network, as was approved by annual town meeting voters in 2015."
About 160 residents voted, with 56 percent rejecting the Comcast offer, according to news reports.
Charlemont has about 1,300 residents and covers about 26 square miles in northwest Massachusetts. Town officials estimate that building a municipal fiber network reaching 100 percent of homes would cost $1,466,972 plus interest over 20 years.
An increase in property taxes would cover the construction cost. But the town would also bring in revenue from selling broadband service and potentially break even, making the project less expensive than Comcast's offer.
"With 59 percent of households taking broadband service, the tax hike would be 29 cents [per $1,000 of assessed home value], similar to that for Comcast," a Recorder article last month said. "But if 72 percent or more of households subscribe to the municipal-owned network, there is no tax impact, because subscriber fees would pay for it."
Currently, Comcast covers about 9.5 percent of Charlemont, while Verizon DSL is available in about 88 percent, according to estimates by BroadbandNow.
The town plans to charge $79 a month for standalone Internet service with gigabit download and upload speeds and no data caps, though the price could rise to $99 a month if fewer than 40 percent of households buy the service. The town also plans to offer phone and TV service at rates cheaper than Comcast's.
Pros and cons
A document distributed to town meeting voters listed the estimated prices as well as pros and cons for both the Comcast proposal and the municipal fiber option.
Pros for going with Comcast included "no risk to the town from potential future competition," "less town borrowing," a fixed cost to the town, Comcast's promotional pricing, and a $10-per-month, 15Mbps Internet package for people with low incomes. Comcast cons were as follows:
- Monopoly service provider
- Uses older, slower HFC [hybrid fiber-coaxial] technology
- Limited control over network buildout
- No control over future pricing
- Customer service record
- Speed caps and potential to slow down competitive content (over-the-top TV)
The cons of building a municipal network included higher up-front borrowing, the fact that the town would be responsible for the network and need volunteers to run a board, and "potential competitive risk from less expensive solutions."
But Charlemont officials listed these benefits of the town-run approach:
- 100% fiber-to-the-home technology (faster than HFC technology)
- Town-owned and controlled
- At take rates above 40% generates revenue that will reduce the tax burden
- Not-for-profit to keep prices as low as possible
- Transparent billing and marketing
- No extra taxes/fees except government-mandated phone taxes
- Same speed for all subscribers and content
Charlemont is one of about 20 small towns in western Massachusetts that are working on broadband plans with Westfield Gas & Electric. Charlemont also received a $960,000 stage grant to design the municipal network.
"Working with [Westfield Gas & Electric], the town has already completed the design for the municipal network," Charlemont Broadband Committee Chairman Robert Handsaker said, according to The Recorder. "The design work included mapping of all utility poles, design of the fiber distribution network and preliminary designs and cost estimates for the individual connection to each home."
Leading up to the special town meeting, the town Broadband Committee opposed the Comcast offer while the town Finance Committee supported the Comcast offer. But town meeting voters had the final say.
"The fiber network project has been on hold for the last several months, awaiting a town vote on the Comcast proposal," Handsaker said.
Jon Brodkin is Ars Technica's senior IT reporter, covering the FCC and broadband, telecommunications, wireless technology, and more.
EMAIL jon.brodkin@arstechnica.com // TWITTER @JBrodkin