Cost of fiber-optic broadband proposal drops in C-U

Cost of fiber-optic broadband proposal drops in C-U

CHAMPAIGN – The application for state funding for the Urbana-Champaign big broadband project is due today, and the overall project's cost is going down.

The estimated cost of creating a community-owned fiber optic network was reduced by about $10 million, to the $35 million to $40 million range, following a survey of about 500 households this past weekend. The survey showed that more low-income households have Internet service than originally thought, and that several areas in Champaign-Urbana therefore don't qualify for federal funding to have big broadband brought directly to their home.

Project organizer Mike Smeltzer said it was originally thought that as many as 38 census blocks in Champaign-Urbana, with 17,000 households and 38,425 people, would meet federal standards to have high-speed Internet brought directly to their home.

To qualify, 40 percent or fewer households in a census block can have Internet service, he said.

But the survey showed only 11 census blocks qualified as underserved by the Internet, covering 4,100 households and 10,660 people. Most of those households are in northern Champaign-Urbana, generally north of University Avenue and on both sides of Bradley Avenue.

As a result, the estimated overall cost of the big broadband project has been reduced by about $10 million, said Smeltzer, who is director of networking for the University of Illinois. The UI and the cities are pursuing the project as a consortium, with the UI acting as the lead agency.

"The fiber-to-the-home pilot project is not going to be as big as we hoped it would be," Smeltzer said. "Originally, we thought it would cover one-third of the town. ... But 10,000 people are more than enough to have a successful pilot and demonstrate the benefits of what we are proposing."

The American Recovery and Reinvestment Act designates $7.2 billion for broadband projects in areas that are unserved or underserved by Internet, with the federal government supplying up to 80 percent of a project's overall cost.

Within the next several days, applications will be made to the state and federal government for grants to cover 90 percent of the local project's overall cost.

The biggest part of the project calls for installing seven large fiber-optic rings that would cover all of Champaign-Urbana, part of Savoy and a small section of unincorporated Champaign County and would immediately provide broadband connections to more than 100 local institutions, including schools, hospital, and government offices.

The rings eventually could serve the entire community, but methods to pay for fiber-to-the home installation outside of the underserved areas would have be determined, Smeltzer said.

Deadlines are fast approaching for the local project, with the application for state funding due today. The state set aside $50 million in state matching funds in the capital spending bill to help Illinois applicants meet their 20 percent match requirements. The local consortium is expected to ask for about $3.5 million, and should get word whether it is successful by Aug. 11, Smeltzer said.

Three federal grant applications, exceeding $30 million total, must be submitted to the U.S. Department of Commerce by Aug. 14. Word on whether the local project gets federal funding is expected in November, Smeltzer said.

If funding is approved, project construction could begin next summer and be completed by late 2011. The project likely would employ more than 50 workers during construction.

"This is going to be incredibly fast (Internet service) compared to anything they've had, and it's going to be much cheaper than currently available service," Smeltzer said. "This will bring university-level Internet service into the community."

In the areas that will initially receive fiber to the home, Internet service will cost just $19.95 per month, he added.

Despite the reduced number of homes eligible to receive fiber-to-the-home service, Smeltzer said the overall project remains expensive because of the cost of installing the seven fiber-optic rings, which he said will require installation of 74 miles of conduit.

"This sets the community up forever in terms of communications infrastructure," he said.

The Urbana and Champaign city councils this week approved resolutions supporting the grant applications and authorizing the respective mayors to sign an intergovernmental agreement creating a big broadband consortium.

Details of proposal

Key elements of the proposed Urbana-Champaign big broadband project:

— Installing seven large fiber-optic rings that would cover all of Champaign-Urbana, parts of Savoy and a small part of Champaign County. The rings would provide broadband connections to more than 100 anchor institutions, including the UI, Parkland College, hospitals, schools and government offices.

— Fiber-to-the-premise installation in 11 census blocks in north Champaign-Urbana where Internet penetration is found in 40 percent or fewer households. The fiber-optic rings eventually could serve the entire community with big broadband, but methods to pay for fiber-to-the home installation outside of the underserved areas would have to be devised.

— Creating a network of 35 to 40 public computing labs that could be offered in schools, libraries, homeless shelters and other institutions and could be used by general public or specific populations.

— Developing an advanced lab that would serve as the information technology department of the public computing centers and for the community.

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