DULUTH – If there’s one thing the COVID-19 pandemic has brought home, it’s the importance of access to reliable, high-speed internet that people can afford.
Steven Robertson, senior city planner for Duluth, said people have long wanted to bring better and cheaper broadband to the local scene, initially with the idea that it could spur economic development. But the pandemic has revealed the broader importance of high-speed internet for education, job opportunities, social connectivity, commerce and access to services.
Duluth reports that only 6% of its residents currently have direct access to a high-speed fiber optic network. In her “state of the city” address earlier this year, Mayor Emily Larson said Duluthians were struggling with “unreasonably high prices, unreliable service or no viable access.”
“It’s unacceptable and it’s holding us back as a community,” she said.
In April, the Duluth Economic Development Authority approved funding of up to $65,000 to hire Entrypoint LLC to examine prospects for building a city-owned fiber optic network. The same firm, based in Salt Lake City, Utah, also advised the city of Superior on developing plans for a $31 million open-access network, which would be municipally owned and also available for multiple Internet Service Providers.
The idea is that the additional competition will drive down costs, as it has done in other communities that have gone down a similar path.
On Monday evening, Duluth City Council received an update on this analysis and received its first look at a draft digital access master plan.
The document proposes that Duluth start a pilot project in Lincoln Park next year at an expected cost of $7-9 million. This would involve building a mostly underground fiber optic network to serve around 1,900 customers next year.
After a full year of operating this network, Duluth would then decide to continue building a citywide network at an expected total cost of $76–79 million.
If the plan for the Lincoln Park pilot project gets council support, Chris Fleege, director of Duluth’s planning and economic development division, said up to $4 million could be raised from funding sources from the ad hoc and neutral economic development within the city’s general fund.
The plan also proposes to draw $5 million from the Duluth Community Investment Trust Fund, with the hope that these local funds would be matched with public funds.
Minnesota has set aside $95 million to help bring broadband to underserved markets, with a maximum of $5 million for each individual community, Fleege said. Although the grants are competitive, Fleege predicts Duluth could make a compelling case.
Overall, Duluth Councilwoman Terese Tomanek asked what the current CIT fund balance is.
Larson said as the markets fell, the balance had fallen to just under $30 million, but hit $37 million earlier this year. She noted that, if granted, the $5 million request would be for a one-time expense of a fund that would not affect the tax levy.
“It’s really important to keep in mind that this first request is not a request from taxpayers. We found the funding to try this model and see if it works, and to try it in a neighborhood who really needs it,” she said. said.
Any expenditure from the CIT Fund would require a super majority vote of the Duluth City Council, which means no less than seven of the body’s nine members would have to support the request.
Fleege said the city would expect to restore $2.5 million to the CIT Fund over the first 10 years of operation of the Lincoln Park broadband system, from user fees.
Larson said the fiber optic network promises real cost savings and significantly improved service for residents.
“We already, as a community, pay a significant amount of money to ensure connectivity,” she said, pointing out that the city collectively pays about $29.5 million a year for service to 36,000 households. customers paying an average of about $68 per year. month.
“With this plan, we know and have the data that … the total monthly cost to residents would be between $30 and $55. That’s a significant savings,” she said.
The city conducted a citywide analysis this year, including a survey in which more than 1,700 people took part, and business developer Emily Nygren said, “People rated the reliability of their internet was really fragile.
She also said people also view the service as unaffordable, well above the $40 to $50 per month range most considered reasonable.
The city also conducted nearly 700,000 speed tests across Duluth, which documented upload and download rates well below the “up to” speeds marketed by local internet service providers, she said. .