The Northwest Hills Council of Governments (NHCOG) recently received a payment of $400,000 in CARES EDA Funding “to update economic development plans and fortify programs to assist communities in responding to the coronavirus pandemic.”
How has the NHCOG spent this money? It has allocated $148,000 (37%) of the CARES funding to support NW Connect, a private corporation promoting a municipal fiber optic network that would provide internet access but no cable television. And in fact, this is not the first time that the NHCOG has given large amounts of capital to support NW Connect; during the past four years, the NHCOG has funneled all of its funding to improve broadband in the region, totaling at least $300,000, towards the company’s efforts, and has provided consultants and staff for its operations. No other private, non-501(c)3 entity in Litchfield County has received anywhere near this level of support and preferential treatment from the NHCOG.
Despite receiving all of this funding, since its 2016 incorporation, NW Connect has laid no fiber, nor has it connected one residence or business, nor has one town signed on to the prospect of building its own network.
There is a reason for this: It’s not worth the financial risk. In Municipal Fiber in the United States: An Empirical Assessment of Financial Performance (2017), Christopher Yoo, Professor of Law at UPenn, writes: “Many cities managing these projects have faced defaults, reductions in bond ratings, and ongoing liability, not to mention the toll that troubled municipal broadband ventures can take on city leaders.” He cites specific examples that are quite sobering: “Marietta, Georgia sold its system for $11.2 million at a loss of $24 million . . . Provo, Utah sold its system for $1, leaving behind $39 million in debt . . . Quincy, Florida, incurred $5.1 million in debt . . . $6 million in operating losses,” and the list goes on, including Burlington, Vermont, who recently defaulted on its indebtedness.
Professor Yoo adds: “The lack of any appreciable demand for gigabit applications in countries that have large-scale fiber builds … raise serious questions about whether the gigabit speeds associated with fiber are needed.” Steve Simonin, a former cable network engineer, and Chair of the Litchfield Cable TV Advisory Council, agrees with Professor Yoo: “We don’t need a redundant fiber network and a municipal network could bankrupt our towns.” Area providers currently offer fiber optic services to businesses, and Optimum has pledged to bring fiber to all of its customers in the near future.
So why are we essentially serving as NW Connect’s “angel” investors, putting enormous amounts of our taxpayer dollars into such a high-risk venture, a venture that, if it ever provides any return, would only benefit those residents in a town that opted to build a municipal network?
The NHCOG’s next Zoom meeting is Oct. 8. Please urge your representatives to reconsider allocation of the $148,000 ($100,000 has not yet been disbursed), and discontinue taxpayer support of NW Connect.
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