About a year ago, we reported that Rock Falls, Illinois, had decided to develop a fiber network to offer connectivity to local businesses. Now, the town of less than 10,000 is closer to expanding that network to offer Gigabit Internet access and voice to residents.
Considering Expanding Services
In September, community leaders began considering the expansion after consultants suggested investing in Fiber-to-the-Home (FTTH) as the best way to make use of the city’s resources. They offered a “fiberhood” option so Rock Falls Electric Department could connect new subscribers incrementally; they suggest starting with business corridors where many commerical entities are already taking service. The fiberhood approach requires people in specific areas of the city to sign up first, then after a certain percentage of the households committ, construction begins.
Rock Falls began planting fiber and conduit in the 1990s and have connected the municipal electric utility substations, schools, and other municipal facilities. They have also leased out excess capacity to private providers who want to offer connectivity to commercial customers in prior years.
Funding - It's Complicated
The fiber backbone is already in place but a complete citywide FTTH system will cost approximately $13 million, estimate consultants. After consulting bonding professionals, city leaders discovered that they needed to consider a few issues before deciding how to proceed. SaukValley.com reported on the financing discussion:
“We need either a feasibility study or our most recent audit that includes revenues from the broadband business to show we can make our bond payments,” [City Administrator Robin] Blackert said. “But a new feasibility study would cost us between $60,000 and $80,000, and we have no past revenue history with the new utility.”
Blackert said it was previously thought that the new fiber utility could be the primary alternate revenue source, and the electric department, which has been handling the broadband operations to this point, could be the backup source.
“Now we’ve found out that we need to use the general fund as the backup source,” Blackert said. “They would still be alternate revenue, and not general obligation bonds.”
After discussing other funding options, the council voted to allow Blackert to continue to investigate further so they could make a well informed decision. The community pays some of the lowest electric rates in the state because its hydroelectric facility located on the Rock River keeps power rates in check. Electric Committee Chairman Jim Schuneman said, “After several years, we’ve come up with a business plan we like, and we have an opportunity to set up a new enterprise that can positively affect the quality of life of our citizens and bring businesses to town.”