Thu, Aug 4, 2022 12:41 PM
By Scott McClallen, The Center Square
Holland voters on Tuesday approved a $30 million spending plan over 25 years. The project will be funded by a property millage increase to install citywide fiber-optic broadband infrastructure by just 213 votes.
The Holland Board of Public Works plans to break ground in fall of 2023 to lay fiber-optic cable with plans to finish two years later in 2025. The proposal aims to allow BPW to provide 1-gigabit internet service speed to customers and provide an open access network to private internet service providers.
The millage will levy up to 1.5 mills, or $1.50 on each $1,000 of taxable valuation, on property owners the first year and 1.12 mills afterward.
HBPW says a community-driven fiber network would increase customer choices for high-speed, affordable internet citywide because aging copper infrastructure limits bandwidth and provider competition.
However, the concern is that taxpayers might have to pay more than the initial $30 million over two decades of technological advances, even for residents who already pay for pre-existing private internet service.
A University of Pennsylvania analysis of 15 municipal broadband projects found “[n]one of the projects generated sufficient nominal cash flow in the short run to maintain solvency without infusions of additional cash from outside sources or debt relief.”
“Similarly, 87% have not actually generated sufficient nominal cash flow to put them on track to achieve long-run solvency,” the researchers wrote. “In addition, 73% generated negative nominal cash flow over the past three fiscal years, leaving them poorly positioned to make up their deficits and causing them to fall farther into debt.”
Jarrett Skorup, senior director of marketing and communications at the Mackinac Center for Public Policy, called the proposal “a bad deal.”
“The Holland broadband proposal asks all taxpayers to subsidize a network used by a few,” Skorup previously told The Center Square. “The vast majority of government owned networks have failed and, indeed, for this one to be financially viable, it will have to have an unrealistic number of customers sign up.”
Holland City Manager Keith Van Beek previously told The Center Square that much feedback supported the proposal.
“We had an extended community outreach period with citizens, including a pilot project in our downtown area where a community-owned infrastructure is now available,” Van Beek told The Center Square in an email. “The feedback we received from citizens is that they wanted a choice to have such a network, owned by the HBPW, that current internet providers and other private companies could utilize to provide more choice and competition.”