In March, we wrote about a prospective municipal fiber network project in the western Michigan city of Holland. Holland’s Board of Public Works (HBPW) began a pilot test in January, offering gigabit speed services to three commercial buildings in the city via a system of dark fiber cable that the city has owned for more than two decades.
Holland’s Board of Public Works (HBPW) has since released a study that details options for a citywide municipally owned Fiber-to-the-Premises (FTTP) network. Although the study is only a first step toward developing a final business plan for the network, it gives significant insight into the city’s plans for the project.
Prospective Network Footprint and Business Model
In the first option, the city could invest $63.2 million to add nearly 500 miles of fiber lines to the city’s existing fiber infrastructure to create a municipal FTTP network for the entire HBPW service area. The new network would reach all of the homes, businesses, and municipal facilities in Holland and in neighboring communities that fall within the HBPW’s service area.
The second option suggests a $29.8 million investment on a fiber network with a smaller FTTP footprint that would provide gigabit speed fiber connections to all premises within the Holland city limits.
According to the study, the city prefers a “hybrid open access” business model in which Holland would provide retail services while also preserving its current open access model. The study also discusses potential FTTP models the city could consider, including one in which the city serves as the network’s sole ISP as well as several different potential public-private partnership (PPP) models that have been successful in other cities.
The study suggests that the city can finance the larger of the proposed network projects with a combination of bonds and loans. The study assumes a 39.6 percent take rate
Faster Speeds, Better Rates
The fastest connectivity customers in Holland can get from the existing city network is not competitive on speed and price with the services offered by local incumbent providers. The established network serves only commercial customers; the pilot project is the city's experiment in residential and small- and mid-sized business connectivity.
But with a newly expanded FTTP network, the city would dramatically improve options to residents and businesses. Based on their 39.6 percent take rate, consultants proposed subscription rates for 1 Gigabit per second (Gbps) Internet access:
- Residents: $80 per month
- Small commercial service: $85 per month
- Medium commercial services: $220 per month
The study notes an additional, one-time $820 charge to connect each premise to the network.
Opportunity for Local Collaboration?
The city of Holland may also have the opportunity to cooperate on a broader network plan with Laketown Township, a neighboring community that recently proposed creating its own municipal fiber network. Laketown Township, part of which falls within HBPW’s service area, will vote in May on a proposed $8.6 million fiber network.
"When we began developing the fiber broadband business plan, we were unaware that Laketown was also pursuing fiber for the township,” a statement from the HBPW said. “We will gladly work and meet with Laketown officials to coordinate our offerings."
Local Fiber = Local Benefits
Whatever the final decision, Holland City Council Member Brian Burch makes a powerful argument highlighting the economic and quality of life benefits for everyone who lives and works within reach of the future network:
"Like drinking water, access to information is the new public health…. Advances in information and communications technology means that education is no longer confined to the classroom and our children can become more competitive in the global economy. Like strong transportation infrastructure, such as roads, bridges and water channels, public infrastructure allows commerce to grow and for private business to thrive…. The “backbone” of this gigabit network is currently wired, our next step is to bring this capability into homes and small businesses. By doing so, Holland can be at the forefront of the new economy and define our region with more educated residents and an even faster-growing economy."