Holland, Michigan Votes to Build Citywide Open Access Fiber Network

In early August, the city of Holland, Michigan (pop. 33,000) voted to fund the construction of a citywide, open access fiber-to-the-home (FTTH) network. It’s the culmination of almost a decade of consideration, education, planning, and success, and builds on decades of work by the Holland Board of Public Works (HBPW) and city officials to build and maintain resilient essential infrastructure for its citizens. It also signals the work the community has done to listen to local residents, community anchor institutions, and the business owners in pushing for an investment that will benefit every premises equally and ensure fast, affordable Internet access is universally available for decades down the road.

In the Works

Holland has been formally exploring the need for better local connectivity since before 2016. It has been aided in this effort by the fact that the Holland Board of Public Works (HBPW), which already provides electricity, water, and waste water services, has been maintaining a small institutional fiber network that it first installed in 1992 (see current coverage in map, right, current as of May 2019).

AT&T, Comcast, and Spectrum all operate in parts of town, but only 22 percent of Holland has access to gigabit download speeds. And so, beginning in 2016 and pushed by officials and Lakeshore Advantage (the local economic development organization), the city began talking about how it could leverage its expertise, experience, and well-earned local trust to do more. Early surveys showed that as many as 70 percent of residents rated Internet access as important as electricity, water, and wastewater services, with strong majorities supporting a community-owned option as the solution to poor local service. 

"It’s a community investment, just like we invest in our roads that are used by everybody. This is a community investment to build a fiber infrastructure that everybody can use." - Pete Hoffswell, Superintendent of Broadband Services for the Holland Board of Public Works, to MLive.

Driven by strong support, Holland embarked on a downtown fiber pilot that went live in September 2017. Today, that network, operated by HBPW, serves more than 100 businesses. With its pilot a success, the city continued to explore a city-wide option, buoyed by additional services and a full cost study done by CTC Technology and Energy completed in 2021.

Financing

When it first began discussing building a citywide network in 2016, rough estimates put the buildout costs at $20 million. Financing options at the time included a citywide millage, the addition of a small rate to utility bills, special assessments, and a non debt-funded option which would have seen expansion driven in succession to neighborhoods which express the most interest and a willingness to pay for it through “rates, special assessments, or some other funding mechanism,” with the revenue folded back into the infrastructure buildout.

Ultimately, the city landed on the proposal of a $30 million bond in the form of a 20-year millage, which passed as a simple majority vote last August. The bond will be serviced as a $1.50 millage on each $1,000 of taxable property in the city (the average house in Holland is $200,000, according to local officials) in the first year, before dropping in years two through 20. Over the life of the millage, it’s expected that the average will be $1.12 on each $1,000. 

This will fund the entire network build, from the $22.2 million needed in costs for fiber and conduit ($1,500 per passing), to the $1.6 million for network electronics ($200 per household), while leaving enough to cover the expected $6.1 million that the cost study said would be needed to cover the 51 percent of households that would likely take service directly from HBPW as their Internet Service Provider. City staff has recently recommended allocating half of Holland’s American Rescue Plan funds to lower the costs ($4.2 million), which would drop the total expenditures for the project.

See a full breakdown of the costs for building and operating the network, and the business plan overview.

"We continue to see the Internet crash repeatedly. We’re excited about an increase in speed and the opportunity to bundle all of our bills together in one place." - Lakeshore Advantage Corp. President Jennifer Owens

The millage is the only required cost for residents of Holland, and will bring the fiber network to the curb of every house and business in the city. It looks like if households do choose to take service from HBPW (as opposed to one of the private providers on the open access network), each will pay a $820 one-time connection fee (which can be paid over time as a $7 line-item on monthly bills). All of that means, according to the city, that it expects to be able to provide service for $45/month, everything included. In a unique (and smart) move, the city has a tax and cost calculator at HollandCityFiber.com that allows residents to run the numbers.

The Vote

The millage measure, on an August 12 ballot this past summer, passed by 500 votes (54-46 percent). It means the millage will go into effect shortly, and ensure the network gets built irrespective of take rate while placing it on firm financial footing from Day 1 of construction.

It’s worth noting that the bond measure passed despite an opposition campaign driven and mostly funded by Comcast which spent more than $110k through an initiative called Protect Holland Taxpayers (see contributions here, collated by Holland City Fiber and sourced from Ottawa County filings). Other contributors to the effort included the Michigan Cable Telecommunications Association. The URL for Protect Holland Taxpayers is dead just a month after the vote (and apparently didn’t exist long enough for the Wayback Machine to capture a screenshot), but a barebones Facebook page for the organization still exists. Other opposition trotted out well-worn (and disingenuous, incorrect) talking points, including that the fiber network would be obsolete in two decades. It looks like the city made regular efforts to address the misinformation campaign as it unfolded, and engaged citizens while having a little fun along the way.

A Network for the Future

The way the construction plan looks right now, it will mirror Huntsville, Alabama’s, with the public funding going towards building a network that reaches the curb of every household in the city. Each ISP (including HBPW, which is projecting a 51 percent take rate) that signs onto the network would be responsible for its own drops, including determining how much to charge connecting households for the work.

A blend of aerial and underground construction is planned, with the resulting network will be capable of supporting 10-Gigabit-per-second (Gbps) connections. 

Next Steps

The next steps for the process include the release of an RFP for design and construction services this winter, with design to follow in 2023 before construction breaks ground next fall.  Phase 1 would go online in mid-2024, with local officials project the full network will be live in 2026.

Our team really sees broadband and investments in broadband as really an investment in the third utility that’s necessary for businesses and talent to operate. The ROI for broadband has a very significant impact on the future of the community’s economy. A lot of that is driven by manufacturing here, and changes with smart manufacturing, robotics, big data and all of the equipment that’s connected to the internet — it requires a lightning fast connection and speed. The better connection we have for businesses and residents, the more we have to compete and be successful. –Lakeshore Advantage Corp. President Jennifer Owens

Part of the plan going forward is also to stay connected to “community opinion through a professional survey done by Hope College's Frost Research Center.” There’s no word yet on which ISPs might join HBPW on the network to offer service. Currently, six providers serve businesses on the downtown fiber pilot network.

Follow along with network updates here. Watch a video breaking down the bond proposal for residents here, with additional videos from HBPW below:

Header image via Wikimedia Commons by BenHerrera1979 via the Creative Commons Attribution-Share Alike 4.0 International license.