Urbana City Council set to review its agreement on fiber-optic network

Urbana City Council set to review its agreement on fiber-optic network

URBANA — The city council this week will consider a resolution that some members hope will address concerns over moving forward with a plan to invite a private company to build out a high-speed, fiber-optic network throughout Champaign-Urbana and Savoy.

Council members will meet as the committee of the whole for a discussion on the topic at 7 p.m. Monday in the Urbana City Building, 400 S. Vine St.

Alderman Charlie Smyth, D-Ward 1, introduced the resolution July 30 after the council had already agreed to seek an offer from the company, Gigabit Squared, but local businesses later began telling members of their concerns over the plan.

He and Alderwoman Diane Marlin, D-Ward 7, stated their worries over lack of information given to city councils in Urbana and Champaign and about the appearance of a conflict of interest between the company, Gigabit Squared, and one of the government agencies' consultants who is advising them on how to proceed with the operation of an existing $31 million fiber-optic infrastructure.

A first draft of the resolution included a reference to that appearance of a conflict of interest, but council members ultimately decided to omit it from the version that will go for discussion tonight. "Our staff, legal staff, city of Champaign staff, the U of I, asked a bunch of these questions, and I personally feel that the business plan is fair," Alderman Brandon Bowersox-Johnson said.

Still, those concerns remain for some council members.

"We are remaining at the table with this Gigabit Squared application, even though with queasy stomachs doing it," Marlin said at the last council meeting.

A group of government agencies comprising Urbana, Champaign and the University of Illinois — better known as Urbana-Champaign Big Broadband — have submitted an application to Gigabit Squared, who has offered to build comprehensive fiber-optic networks for select university communities.

The Gigabit Squared buildout would be an expansion of the existing $31 million network, which was primarily funded by the federal government. But that "backbone" only extends to public buildings and neighborhoods where 40 percent or fewer residents have Web access.

More than 500 residents in Champaign-Urbana and Savoy committed at least $500 each to have the broadband network installed on their properties as the result of a "competition" local officials organized as a way to convince Gigabit Squared that the location would be worth the investment. There is no guarantee that Champaign-Urbana will be selected, and those residents would have their money refunded if the plan does not move forward.

The Urbana City Council in July agreed to submit the application, but the following week, Smyth said he had some concerns. That is where the resolution originated.

One, he said, is the lack of information that has been given to the three agencies about the proposal. Another is the question of whether ownership the network itself — which Smyth believes should be open to local Internet providers and others who can make use of it — would fall into the hands of a private company that would make network access difficult.

The resolution would recommend that Urbana-Champaign Big Broadband officials explore alternate options for building out the network. That could include public ownership or soliciting offers from different private providers, but it does not necessarily exclude the Gigabit Squared option.

It would also recommend that the group hire a general manager to oversee operations and maintenance of the existing network and that it seek full disclosure on the relationships between Gigabit Squared and the Big Broadband group's consultants and representatives.

"None of us like to be rushed under this veil of secrecy, being told what to do, when we're the ones ultimately responsible for decisions," Smyth said during the July 30 meeting.

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pattsi wrote on August 13, 2012 at 8:08 am

Is it possible to get more detailed information concerning the conflict of interest and why this will not be part of the resolution?

Patrick Wade wrote on August 13, 2012 at 1:08 pm
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The appearance of a conflict of interest refers to the close business relationship between Gigabit Squared and the CEO of NEO Fiber, a firm that has closely advised UC2B on the operation of the network and led city officials to believe that Gigabit Squared may be their best option.

According to the city council, the CEO of NEO Fiber had indicated to UC2B that she had been considered for a position with Gigabit Squared, but later distanced herself from the company. More recently, she was listed as a "core team member" of Gigabit Squared in informational material given to a city council in Minnesota.

The reason it was omitted from the resolution is because this is merely an appearance of a conflict of interest. But this situation certainly was part of the impetus for the resolution, and the action steps in the proposal attempt to address the appearance of a conflict of interest.

Thanks for your question. I hope this helps clarify the situation, and if you have any further questions, please don't hesitate to ask.


rsp wrote on August 13, 2012 at 9:08 am

I hate to tell them this but asking questions is what they get paid the big bucks for. Before they sign the contracts on behalf of the citizenry. Rhetorical question, exactly how many times has Gigabit Squared built anything?

Exchicago wrote on August 13, 2012 at 10:08 am

There is an error in the article:  more than 500 residents committed at least $100, not $500, towards installation during the "competition".    There was a $500 option to secure expedited installation, but the basic commitment was $100.

Patrick Wade wrote on August 13, 2012 at 1:08 pm
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Thanks for your comment.

The basic commitment was $100 now plus an additional $400 at the time of installation. The expedited commitment was $500 now plus an additional $2,000 at the time of installation. In addition, everyone who signed up committed to purchasing at least one year of Internet service, starting at $30 per month.

Exchicago wrote on August 13, 2012 at 4:08 pm

Thanks for the clarification.   As one of the people who signed up, I'm aware that if I proceed with installation (if and when my neighborhood gets installed) I'll need to pay $400 more and a monthly service fee, but UC2B made it quite clear that we can back out anytime between now and then and get the $100 returned -- so the "commitment" we made at this point was really only $100.  

cretis16 wrote on August 13, 2012 at 2:08 pm

Hmmmm...sounds pretty cozy....Ms. Kruse and Gigabit,,,note below.


Consultant, Project Manager
Gigabit Squared


2010 – 2011 (1 year)

Project and program manager for several BTOP grant recipients. Developed Business Plan and Financial Projections, created Budget with work plan, project plan and go-forward strategy