About 15 years ago, two small cities in western Oregon faced an all too common predicament for rural areas. The Internet Service Provider (ISP) told they would not see high-speed Internet access until 2020. Taking matters into their own hands, the cities of Independence and Monmouth decided to collaborate on a project to bring the latest technology to their communities.
Together they built a jointly owned Fiber-to-the-Home (FTTH) network, known as MINET (Monmouth Independence Network). Today, the network supports economic development and agricultural innovations. This piece focuses on only one of the cities, Independence, in order to provide an in-depth look at the community impact of the network.
Affordable & Reliable Internet Service
At the time, FTTH was almost unheard of. Even today, the technology is available to only a quarter of the entire U.S. population. MINET offers affordable, reliable connectivity for the 18,000 residents of both communities. The network has a low-cost option available to everyone of 2 Megabits per second (Mbps) for $10 per month. Other Internet access speeds available are:
50 Mbps / 25 Mbps for $50
75 Mbps / 40 Mbps for $65
100 Mbps/ 50 Mbps for $80
Residents can also subscribe to triple-play bundles of Internet, voice, and video services.
Took Time to Develop
MINET has faced a difficult financial situation even though the network has brought many benefits and opportunities to the community.
The League of Oregon cities provided a quick case study of the network in 2011. In the late 1990’s, the two cities developed a feasibility study only looking to connect the governmental buildings and the businesses. After studying the potential for offering services to residents, the cities decided to divide the project into two phases. Phase I: build fiber loops. Phase II: build the last-mile to homes and business and offer retail services.
By 2004, they had officially formed MINET as an ORS 190 entity (an official Oregon intergovernmental agreement). They also completed Phase I at a cost of $1.5 million and the cities began arranging the next stage of the project.
The Oregon Economic and Community Development Department (later known as the Oregon Business Development Department) provided a special public works loan for capital expenses. With the funding arranged, the cities spent the next few years building the network. Engineers realized that the number of housing units was incorrect. There were more homes than expected and the network had to take out another $2.5 million in loans from the cities to connect them. In 2006, MINET officially came online and began connecting residences and businesses throughout the two cities.
MINET, however, kept taking out more loans owing $3.7 milion to KeyBanc and $14.6 million to the Oregon Business Development Department. By 2010, MINET had to restructure its $17.8 million of debt though municipal general obligation bonds. The cities also have loaned MINET funds to cover expenses. In total, MINET's debt came to about $27 million.
To deal with the challenging debt load, network officials replaced the general manager and commissioned a report in 2013 and another report in 2016 to improve efficiency. The goal was to bring costs in line. Today, MINET is operationally sound - covering its operating expenses, but not making all of its debt payments.
This past June, the board of MINET formed a strategic plan and have begun exploring expanding to nearby Jefferson, Oregon (population: 3,000). Expanding the network will spread its fixed costs across a wider base and will improve its economics.
Value Outside the Balance Sheet: Community Impact
Irvine characterized MINET as not just a community-owned ISP, but also as a tool for economic development. Having fiber throughout the city helped recruit an FCR contact center in June 2015. (A contact center is a call center that also provides support via instant messaging). In the past, FCR has been recognized as one of the best places to work in Oregon. Irvine described how the call center provides a few hundred minimum wage jobs and more than twenty well-paying IT jobs.
Irvine and Clyne both described how MINET also supports innovation and entrepreneurship. Fiber connects coworking spaces, and supports the burgeoning agricultural technology industry. Most of the local businesses use MINET, and the network has attracted remote workers who need to send large files quickly and securely to their offices.
Clyne also noted that the network is only one facet of the vibrant community. Independence received the 2014 All American City award for collaboration, inclusiveness, and innovation. Extremely active with urban renewal projects, the city has built running trails and a dog park while encouraging development for active living along the Willamette River.
Oregon now features three communities Sandy, Independence, and Monmouth) with citywide FTTH networks. Each community has its own story about their network, and we hope to feature them all. Keep up with us on Twitter at @MuniNetworks, subscribe to our Community Broadband Bits Podcast feed, and sign up for our once per week newsletter for the latest.
Image of the Independence Bank (Polk County, Oregon) courtesy of Gary Halvorson, Oregon State Archives via Wikimedia Commons.