Residents can compete for expanded broadband service

CHAMPAIGN — City officials in Champaign and Urbana want residents and businesses to vote with their checkbooks to bring expanded broadband service to the area.

They announced on Tuesday that a competition has opened pitting Champaign-Urbana against 36 other research university communities to bring in low-cost, high-speed Internet infrastructure. Six cities will be chosen as locations where private supplier Gigabit Squared will invest in fiber optic hookups directly to homes and businesses.

Officials say it's a step that would enhance Champaign-Urbana's burgeoning Big Broadband initiative, for which a $22.5 million federal grant is helping to hook up residents in underserved areas and community institutions like schools, churches and city facilities with high-speed Internet.

"There's just one problem," said Urbana Alderman Brandon Bowersox-Johnson. "It only connects about 10 percent of the community."

That federal grant can pay for "fiber-to-the-home" hookups only in 11 neighborhoods where 40 percent or less of residents have Internet access. For more than two years since officials accepted the federal grant, they have been looking for ways to extend the fiber optic cables to the rest of the community.

This could be the way, Bowersox-Johnson said on Tuesday. But first, residents and businesses will have to prove to Gigabit Squared that there's enough interest among potential customers that the venture would be worthwhile.

Until July 30, officials will be urging potential customers — which means anyone in the Champaign-Urbana-Savoy area — to express their interest by paying up-front and expecting savings later.

For residents, interested customers will have to go online and promise to buy the service: That requires they pay a $100 fee due by July 30, a $400 installation fee for the fiber hookup if and when construction begins and at least 12 months of Internet service, starting at $30 per month for 20 megabit speeds.

According to Mike Smeltzer, director of networking for the UI, it takes about 5 megabits per second to watch a Netflix movie. So with a 20-megabit connection, a family of four could watch four movies online simultaneously with perfect audio and video.

In return, residents would get a fiber connection to their property — worth at least $3,000 and enhanced property value by Bowersox-Johnson's estimate — and an $8.50 per month discount on their Internet service for up to 60 months. The monthly discount would total $510 over the five years.

Business customers would have to pay a bit more: A $200 commitment fee would be due by July 30, an $800 installation fee at the time of construction and a commitment to 12 months of Internet service staring at $375 per month for 50 megabit speeds.

Smeltzer said a 50-megabit connection could deliver, for example, 10 high-definition football games to 10 different TVs at a sports bar.

In return, business customers would get the connection on their property and a $17 per month discount for up to 60 months. That would total $1,020 over the five years.

If Champaign-Urbana is chosen as one of the six winners, construction would begin in 2013 and be rolled out over four years. Residents and businesses have the option of paying more now and receiving higher discounts later if they want to be bumped to the top of the list as the first to receive the fiber hookups.

If Champaign-Urbana does not win, Bowersox-Johnson said the first step likely would be to find another private partner outside of the competition that would be willing to offer the same prices as Gigabit Squared. If that fails, too, then everyone's commitment fees would be refunded and officials would start considering other opportunities for a community-wide buildout.

The stakes are fairly high. The federal grant covered the cost of the main fiber backbone running through the two cities and part of Savoy, the connections to hundreds of community institutions and fiber-to-the-home in the underserved areas. But building out to the rest of the cities would cost tens of millions — Bowersox-Johnson's rough estimate was $50 million.

And the expansion is key to making the Big Broadband effort succeed, said Champaign economic development manager Teri Legner. The local agencies will be in charge of operating the Big Broadband business when it's up and running later this year, and the question all along has been whether the business will be able to support itself.

Without going beyond the grant-funded areas, Legner said the answer is probably no.

"If we don't expand, we can't be sustainable," she said.

All the connections would include gigabit speed between all Big Broadband locations, like schools and the University of Illinois, which officials say is important for personal and economic development opportunities. A gigabit-per-second connection is the same as 1,000 megabits per second.

Some of those opportunities may have yet to be imagined. Bowersox-Johnson said the community-wide broadband fiber would put Champaign-Urbana on a level with only a handful of other communities in the country as far as Internet speed and connectivity.

"I can't even imagine what this can be," said Champaign Mayor Don Gerard, "which is the most exciting part of it."

 

To vote for Big Broadband 
 
Potential customers can go to UC2B.net/expansion. That website will display what’s expected of residents: 
 
— $100 commitment fee due by July 30
 
— $400 installation fee due if and when construction begins
 
— Commitment to at least 12 months of Internet service starting at $30 per month for 20 megabit speed
In return, residents would get:
 
— A fiber optic hookup to their home, estimated to be worth at least $3,000
 
— A $8.50 monthly discount on Internet service for up to 60 months, totaling $510 over the five years
 
The fees and discounts are higher for business customers.
 
If Champaign-Urbana does not win the Gigabit Squared competition and does not select a private supplier, all the commitment fees would be refunded.
 
Gigabit Squared will select six winning communities from among the 37 members of the Gig.U initiative, which is a group of research universities and their surrounding communities developing “next generation” Internet applications.

Comments

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jonasdees wrote on July 10, 2012 at 4:07 pm

Where do I sign up?

Mike Howie wrote on July 10, 2012 at 4:07 pm
Profile Picture

Hadn't added the signup info yet, but it's there now.

Mike Howie

online editor

william1992 wrote on July 10, 2012 at 5:07 pm

Don't bother, it will never happen.

E.FRIEDL wrote on July 10, 2012 at 4:07 pm

WHOA !  Is this money being collected before the service is started going into the provider's account?  Or is there an escrow account?  If we send money that is not in a separate fund and the provider goes broke or something similar will we all lose our deposits?   I like the idea of high speed internet BUT I don't want to get burned.  And what is the track record for this company.   News Gazette  it sounds like some investigative reporting is called for BEFORE you tell people they can send in their money.

Moruitelda wrote on July 10, 2012 at 10:07 pm

Before blowing the whistle on a non-issue, perhaps you should make the effort of reading the FAQ on the UC2B website, which addresses this question directly?

wayward wrote on July 10, 2012 at 4:07 pm
gftst wrote on July 10, 2012 at 4:07 pm

Basically $500 up front and prices overall not that much better than what you can get for a cable modem. No thanks, not sure how many people are going to be able to afford that city leaders. Maybe focus on the UC2B going quicker and serving more areas at the lower price without having to buy in at several hundred dollars.

Moruitelda wrote on July 10, 2012 at 10:07 pm

That's simply not true. 20 MB download service through AT&T or Comcast will run you at least double this cost - and it won't be symmetrical. There is no competitive speed here in town, and the closest speed is twice the cost. 

Not only that, but this will make available by far the fastest speeds available anywhere in Champaign-Urbana. Sure, you can pay $60 per month to get a non-symmetrical 20 MB/s connection currently. But the UC2B service STARTS at the fastest speed you'll otherwise find - and there are higher speeds available. 

Moreover, you're disregarding the discounted price. By signing up ahead of time, you get a $8.50 per month discount. 

So are you still going to try to tell me that you can already get a 20 MB/s symmetrical connection in Champaign-Urbana for $21.50 per month? Because that would be even more egregiously misleading than your first statement. 

gftst wrote on July 11, 2012 at 1:07 pm

My main point is $500 up front is a lot of money for speeds that are faster but arent really all that needed for the common person/purpose to expand internet availability than what is now available. I guess it comes down to priorities for the individual family...

CJ Williams wrote on July 10, 2012 at 4:07 pm

I do hope that the NG gives us a final tally for how many folks in the "underserved" area's, signed up for broadband service and like the downtown parking garage, how much money it is making.

Moruitelda wrote on July 10, 2012 at 10:07 pm

Why do you have underserved in quotes? Do you not believe that broadband adoption is less than 40%? Does it offend you that the government is trying to spread access to broadband? If so, is it because you disagree with the non-controversial fact that access to home Internet has an immense effect on the educational successes of children? 

Marti Wilkinson wrote on July 11, 2012 at 8:07 am

I actually wrote my masters thesis on the efforts to bring UC2B grant funding to the area, and there is a lingering perception that people who live in the identified census blocks are lazy and shiftless. Some of the dialogue on the former IlliniPundit website, editorials by the News-Gazette, and critic of the initiative reflect that mentality. I actually live in one of the census blocks that is covered by the grant, and I can have my home connected. Contrary to what seems to be a popular belief, I would pay for the service, just as I am paying for my current home connection.

The aspects of the grant that ended up being a real selling point with the cities had to do with the development of fiber rings throughout the area. What this does is lead to the possibility of expansion which can attract business and industry to this area. In some respects the dialogue surrounding big broadband is not unlike some of the discourse that surrounded efforts to bring electricity to rural areas in the 1930's. It's hard to believe that less than a century ago basics like running water, flush toilets, electricity, and telephone services were seen as luxury items. Now if you live in a place without electriticity or running water, your home can be deemed uninhabitable.

From an educational standpoint things have changed a lot since I have gotten my bachelors degree. Even though I drove to Charleston to take my graduate courses, I relied on having a stable Internet connection to communicate with my professors and classmates. It also helped me to access online databases to do research. I still used the library at UIUC to check out materials and to study. For students who are entering college, some schools require that students have laptops and a stable Internet connection.

Exchicago wrote on July 13, 2012 at 1:07 pm

"Underserved" belongs in quotes because it is false.  Every single household that qualifies for a free fiber connection through the federal grant already has access to the exact same broadband internet options the rest of us do, through AT&T and Comcast.    These areas are "underserved" only in that the majority of the households have CHOSEN not to avail themselves of these services, despite the fact that discounted plans are available for low-income individuals.    This has nothing to do with "access" so spare us the rhetoric about childrens' educational success.

Marti Wilkinson wrote on July 15, 2012 at 1:07 am

By establishing that specific census blocks had a limited percentage of broadband usage the broadband access community (BAC) was able to apply for the grant funding. The BAC actually originated as a subgroup of the local cable commission.  The money that Champaign and Urbana received came from both federal and state grants, and the city councils voted to accept the funds. Other communities competed for the same grant money, and Champaign/Urbana won the bid.

The only reason why high speed cable is available in my area is because the franchise agreement required that the cable company make services available to all consumers. Even then it was several months before the cable company rolled out services to lower income neighborhoods. When installing the fiberoptics, the technicians had to section it off, and the weathier parts of town got the services first. I was employed by the cable company at the time, and one of the first customers who got services was someone on the cable commission. Politics plays a role regardless of whether it's private industry or grant funding that is making the installation of fiberoptics possible.

AT&T does not have a franchise agreement with the communities, and they get their clearance from the state. I can see where it would make more sense from a business perspective for Comcast, or whoever is running the cable company, to dispense with local franchises down the road. Over a period of close to 11 years I worked in the industry and the company changed hands four times. As such, there is no guarantee that the best interests of the consumers will be considered. When I inquired into DSL service in 2007, the phone company (AT&T) did not offer it in my area at the time. Eventually they did roll out the service. The last time I checked U-Verse is not available in my area.

Champaign/Urbana is not the only area that is involved with high speed fiberoptics. In the state of Illinois there is conduit lines being run throughout the interstates and highways when roadwork is being done. The intention is to eventually run fiberoptics throughout the state and establish a broadband infrastructure. 

If anyone is interested in looking at the research that is being done in this area I can recommend looking into the work of Eszter Hargittai.

http://www.eszter.com/

http://webuse.org/pubs/

Additional information on the digital divide and broadband literacy information can be found through the NTIA.

http://www.ntia.doc.gov/blog/2010/exploring-digital-divide

Even if the people who have contributed to this discussion is not interested in the information, I would encourage any interested reporter at the News-Gazette to take a look at the links. Additionally they can probably talk to Dr. Abdul Alkalimat and Dr. Kate Williams at UIUC on information regarding digital divides and the efforts being made by UC2B.

brandonbowersox wrote on July 10, 2012 at 6:07 pm

The commitment fees are indeed being held in escrow; the City of Champaign is keeping these funds reserved in a Busey Bank account. If our community is not successful in winning this competition, the commitment fees will be fully refunded. FAQs online answer this and more: http://uc2b.net/uc2b-expansion-faqs/

serf wrote on July 10, 2012 at 7:07 pm

I would love to get in on this, but unfortunately I don't live in C/U.  Any possibility of this heading down the road to Mahomet?

DEB wrote on July 11, 2012 at 8:07 am

I'm in! Paying more for truly lousy connections that I can't really rely upon because of all the down time, that slow down when everyone else in the nieghborhood is online, and that keep rising in cost.... from a company with miserable customer service.

If the US is to remain a competitive country we need to invest in our infrastructure. We rank 38th in internet access. It is expensive and slow compared to most of the developed world.

ClearVision wrote on July 11, 2012 at 8:07 am

Who keeps the interest earned on the escrow account? The contributors? The city? Bu$ey Bank?

pattsi wrote on July 11, 2012 at 10:07 am

I  have the following questions about this proposal:

1. A resident is expected to commit $100 up front as a vote for this to occur in the community or $500 if one wants to jump to the top of the connect first list.

2. If the community is chosen, the timeline is 2-4 years for implementation. So if one has committed $500 to be first the timeline is 2 years before connection.

3. Then there will be a connection fee, claimed to be a deal because so much less than actual cost to connect and of course, the usual argument, this will increase property value therefore property taxes if taken to the logical conclusion.

4. Those who connect will get a monthly fee break of $8.50/month for 5 years, which adds up to offset the connection fee if one stays in the venue for the 5 years. There is no stated claim that the monthly internet cost is quaranteed at $30 for residential connection for the same 5 years. We know what happened when internet connection first came to the communiy--it was reasonably priced and not the case now nor good service.

5. What are the guarantees concerning service quality?

6. What is the subpopulation that can tie up the proposed "X" amount of money to vote for the proposal and if won have this money tied up for 2-4 years while the project is built out?

7. Question--is there not a better way to do this, say as a coop--a topic presently being discussed by a small group of people.

Bulldogmojo wrote on July 11, 2012 at 4:07 pm

Isn't this similar to what Blagojevich is in the slammer for, pay us a bribe to provide a vended service and favors? If there is a market for something companies will find a way to provide it. No consumer of a product should have to pay to be considered to buy something later from the same people. First rule of business...Don't disappoint your paying customers. Like my Dad used to say, "turn off the TV and go outside and get some exercise" good advice

serf wrote on July 11, 2012 at 6:07 pm

I kind of see what you are saying, but I think it's just a poor marketing strategy (or just poor choice of language) on their part.  How I read it is they are basically just saying 'we're only gonna do this in X number of communities.  If you want it, then put your money where your mouth is.'  You're not paying to be considered; it's a down payment on a product/service they will deliver at a later date.  
 

Again, I wish I could get in on this.  It seems like a no-brainer to me.  

Fromthearea wrote on July 14, 2012 at 3:07 pm

Why are churches getting funding from federal sources?  So much for seperation of church and state.  

sameeker wrote on July 15, 2012 at 3:07 pm

Another corporate rip off. They want people to pay them the capital to build it? What other business demands free money up front to build something? I thought that capitalism was based on the premis that if you put up the money to build something, then you are an investor and own shares in the company and a portion of the profits. This is a pretty sneaky trick to get capital without having to sell shares in the company. I smell a rat.