Skepticism increases over Big Broadband

Skepticism increases over Big Broadband

CHAMPAIGN – Amid growing questions surrounding the $31 million "Big Broadband" proposal, Mayor Jerry Schweighart on Wednesday said there may have been enough votes to kill the project – or at least its current form – before this week's city council meeting.

"It may be something that we need, but not now," Schweighart said. "Just the economy is not right to take on this kind of project."

City council members on Tuesday had been scheduled to address the project – which would bring high-speed Internet access to 137 community-oriented buildings and a percentage of low-income neighborhoods – but the discussion was deferred in the absence of a Maryland consultant who audited the proposal.

"I thought there was a vote there to kill it," Schweighart said. "Now several of them have flip-flopped."

For Champaign officials, it's literally a million-dollar question.

"I think we have other priorities in the city of Champaign that we need to address before we sink $1 million into a project," council member Dave Johnson said.

The city would be obligated to contribute roughly that amount for the initial construction. And questions about the project's financial sustainability – the recurring costs and possible revenues – have yet to be answered.

Doug Dawson, the Maryland consultant, projected the network would have an annual deficit of $200,000 to $300,000 considering capital replacement issues.

He also warned that the project was "overdesigned" and plans call for use of "cutting edge" technology.

Peter Folk, CEO of Volo Broadband in Champaign, sent an e-mail message to Champaign and Urbana council members, urging them to consider alternative plans.

Among his concerns with the project is that it "depends heavily on U of I resources; costs much more than many experts believe is appropriate; claims performance greater than what industry experts would predict; offers services that have not been market-tested for interest; depends financially on market saturation significantly beyond the level current providers have achieved."

Most importantly, Folk said, the local proposal "does not significantly improve the broadband options for disadvantaged members of our community," the underlying intent of the grant.

Local municipal budgets are tight, and council members from both cities are concerned that the project would stretch expenditures too far.

"We're talking about hiring freezes ... and yet we're taking on a project that could cost millions," Schweighart said.

"We don't have adequate police protection to cover the geographic areas that the city occupies, we can't keep up with the city's payments to the pension, but we're going to pay for this?" asked council member Michael La Due.

Urbana council members examined their city's budget earlier this week, and the forecast was negative.

"We're looking at deficit projections for next year that don't contain any salary increases for city employees," said Urbana Alderwoman Diane Marlin, D-7.

She said she also is concerned about whether the state government, which has its own budget woes, can come up with the $3.5 million contribution local officials are expecting.

But John Dimit, director of the Champaign County Economic Development Corporation, told the council on Tuesday that the network is necessary for future development. He added that some businesses looking to locate in Champaign are more concerned with Internet availability than the nature of streets.

"That will be a huge benefit for our community as well," said Champaign council member Karen Foster, "that we might be able to bring in more business that are driven by this type of fiber."

Whether the broadband network would stimulate the economy enough to enable the city to provide for budget items – like public safety and pension payments – is what officials should be exploring, said La Due, who indicated he still has not determined his position toward the proposal.

Council member Kyle Harrison said he needs an in-person discussion with the consultant before he can make up his mind.

"Taking on a project this big could hurt financially," Harrison said. "But on the flip side of that, I think it's an awesome opportunity for the city of Champaign for growth."

Johnson, who said he likely would vote against the proposal, said his concerns surround the fact that the cutting-edge technology proposed remains largely untested. Of the 900 similar networks active around the world, only one – established in a small New York town – is in the United States.

"I think it's risky," Johnson said. "I don't think there's a proven track record of success."

Officials on Wednesday awaited word about the status of the $31 million in grants from the National Telecommunications and Information Administration. Approval or denial could come any day.

Champaign council members expect to have a chance to speak directly with the consultant, as the Urbana council did earlier this week, before they vote on the proposal.

Whether the project would die if one of the local agencies dropped out depends on how they go, said Mike Smeltzer, the director of networking for Campus Information Technologies and Educational Services and a leader of the broadband grant effort.

If, for example, Champaign were to refuse to obligate itself to funding but still allowed the infrastructure to be installed on city property, Smeltzer said the other agencies involved – the city of Urbana and the University of Illinois – would have to cover Champaign's expenses.

"At that point, we would need to come up with a local source to match what was going to be their contribution," Smeltzer said. "I think that's doable."

If the city did not permit use of its property for the infrastructure, the entire proposal would have to be redrawn.

"I think that would be incredibly unfortunate if they got to that point," Smeltzer said. "And I don't think they will."

News-Gazette staff writer Steve Bauer contributed to this report.