Updated: UC2B makes deal to widen fiber network
CHAMPAIGN — After more than a year in waiting, residents who committed hundreds of thousands of dollars toward the expansion of Urbana-Champaign Big Broadband finally have an answer about its future.
During the next few years, officials announced Thursday, the network will be built out to more Champaign-Urbana neighborhoods — a crucial step forward in keeping the system afloat over the long run. And much as they envisioned, it will be a private company that comes in to do the work.
Family Video subsidiary iTV-3 will take over the operation, maintenance and customer service of what's now operating as UC2B. The network's 1,100 customers will be allowed to continue on their existing contracts if they choose. Moving forward, however, they will get their service from the private provider instead of UC2B.
But the linchpin of the deal has bigger ambitions: iTV-3 also plans to build out the high-speed fiber network to neighborhoods where at least half of the residents agree to purchase a subscription. That means hard-wired and high-speed Internet, TV and voice connections to homes which can muster up support in their areas.
Officials hope that, eventually, the high-speed fiber network will reach every home in the community.
"It was articulated that that was what we would need to sustain this and grow this," said UC2B manager Sabrina Gosnell.
The existing $31 million network, which the cities and the University of Illinois cooperated to build mostly with federal grant money, is now somewhat limited in scope. The grant-funded portion of the network reaches only low-income neighborhoods where Internet access had not previously been prevalent — part of government agencies' goal to roll out access to crucial online services in disadvantaged areas.
When they set out to build the network in 2009, local officials always knew they would have to find a way to expand the network to the rest of the community to keep afloat the business that has essentially turned into an Internet service provider — something like Comcast or AT&T on a smaller scale.
The deal relieves UC2B of the business side of the network, Gosnell said.
"The not-for-profit is a startup for all intents and purposes," she said. "It's not easy to be a startup. It's especially not easy to be a startup ISP."
The Internet service provider arm of UC2B started as a function of Champaign city government before it was officially turned into its own private nonprofit agency last October. Gosnell said that, in November, iTV-3 expressed interested in building out the network.
It will be a big investment — expected to be around tens of millions of dollars — for iTV-3 to expand the fiber network to neighborhoods which are not already covered in the two cities. Residents anywhere can now visit http://www.theperfectupgrade.com to commit to buying the service — iTV-3 will be obligated to build fiber infrastructure in any neighborhood where 50 percent or more residents sign up.
That's actually an important business strategy, Bowersox-Johnson said, with the high costs of building fiber infrastructure.
"Ultimately, that's what we want," he said. "We need them to build in neighborhoods where there's enough people to stay afloat."
Keith Hoogland, the president of iTV-3 and Family Video, said on Thursday that he thinks the deal is a "very good fit" for the Illinois-based business.
"This all took a lot of effort to get everyone together," Hoogland said.
He added that Family Video stores will serve as sort of a drop-in customer service point for people who are unfamiliar or uncomfortable with fiber service.
"I think that people are going to be able to use Family Video as an information source," Hoogland said.
The nonprofit agency called UC2B which is currently running the network will drop its operations, maintenance and customer service responsibilities. It will instead begin to focus on promoting digital literacy and getting the word out about the buildout, said UC2B board chairman Brandon Bowersox-Johnson.
And the nonprofit will have a role in rallying residents to sign up.
"If you can sign up half of your neighbors, you will get this in your neighborhood," Bowersox-Johnson said.
And the rallying has already begun. Both mayors are already in on the effort — Champaign Mayor Don Gerard called the agreement "a generationally transformational, amazing thing."
"I'm going to be out there organizing my neighborhood," said Urbana Mayor Laurel Prussing.
More than 500 residents in 2012 had already signed up and committed nearly $400,000 toward the expansion as UC2B began gathering cash to entice a private company to build the network out. Those residents offered the cash in return for a promise of future discounts and being among the first connections when that private builder came in.
In the absence of a deal with a private service provider, that money has sat untouched since then. Some residents received refunds, and UC2B officials said they will continue to allow refunds should residents not be happy with the deal. Anyone who has already committed money, however, will still be eligible for the same discounts they were promised from the beginning. However, they will need to reaffirm their interest in the program.
Officials all along asked residents to be patient while they worked out the details of a big deal. UC2B officials say they will communicate with existing customers and those who had committed money so everyone is aware of what's going on and what their options are.
"I didn't think it would take this long," Bowersox-Johnson said. "And I really applaud all the people in the community who have been this patient."
What is iTV-3?
The Internet service provider grew out of the Illinois-based company that owns Family Video, which has 775 movie and game rental stores in 19 states and Canada. It has three stores in Champaign-Urbana.
It began providing fiber-based services in 2009, and in the past few years has launched projects in Pekin, Morton and East Peoria.
UC2B board chairman Brandon Bowersox-Johnson called iTV-3 a "financially strong" partner. Champaign-Urbana will be iTV-3's biggest service area so far and its first with gigabit speeds.
Three other organizations with more local ties expressed interest in working with UC2B, officials say. One did not meet UC2B's qualifications, and the other two said they were not interested in providing service under UC2B's core principles which state the network must be fiber, it must be open to competition and that all residents have the same opportunity to get service.