WiredWest Needs State Help to Bring Broadband to Western MA, Report Says

Verizon’s plan to wire Boston with Fios, its high-speed fiber optic network, isn’t the only proposal for turbocharging the state’s Internet access speeds. In western Massachusetts, a startup effort formed by more than two dozen towns is planning a high-speed fiber optic network operated as a municipal cooperative company.

The public startup organization is called WiredWest. Today the Berkman Center for Internet & Society at Harvard University released a report on the project, which will allow up to 31 towns to collectively finance, operate, and provide services over a fiber optic network—no need for Verizon or other major incumbents. Municipal leaders have secured $49 deposits from more than 7,100 pre-subscribers, developed a financial model, and drafted an operating agreement, according to the report.

The WiredWest network would connect to an $89.7 million “middle-mile” fiber optic network already built by a state agency called the Massachusetts Broadband Institute (MBI). While the middle-mile network was meant to be the starting point for “last-mile” networks serving homes and businesses in the region, only one of 45 towns lacking basic cable service has actually built one. (That town is Leverett, MA.)

WiredWest wants to go much farther. So far, 24 of WiredWest’s member towns have authorized borrowing a total of $38 million to cover about two-thirds of the cost of the project in their towns, according to the Berkman report. But the report says they will need to receive a portion of the $50 million in available subsidies set aside by the state legislature to fix the western Massachusetts region’s Internet access problems (many people only have dial-up service).

In December, MBI issued a highly critical analysis of WiredWest’s financial model, and WiredWest responded with a rebuttal. MBI has tabled any decision on the project amid a wider review of the last-mile program by Gov. Charlie Baker’s administration, the report says.

While the project awaits answers on Beacon Hill, it has some potential benefits. Unlike companies like Verizon, which invest so as to ensure big profits for the mothership, WiredWest could return revenues to member towns. And its multi-town reach would allow it to aggregate demand, spread risk, and achieve economies of scale, according to the report.

The project has national significance. “Without the need to generate high dividends for shareholders, groups of municipalities elsewhere could form cooperatives to do regional buildouts,” the report says. Indeed, WiredWest isn’t the only municipal cooperative doing for rural areas what Verizon says it will now do for Boston. Another prominent example is RS Fiber, formed by 17 townships and 10 cities in Minnesota, and the subject of another recent report.

Gregory T. Huang is Xconomy's Editor in chief. E-mail him at gthuang [at] xconomy.com. Follow @gthuang

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