State Agency At Odds With Western Mass. Broadband Group

Dec 4, 2015

The state agency tasked with bringing broadband internet access to underserved towns in western Massachusetts is at odds with the regional organization planning the network.

In a letter sent to municipal leaders earlier this week, the Massachusetts Broadband Institute recommends that towns do not sign the Wired West operating agreement. After reviewing the plan, MBI says towns would be locked into the agreement therefore restricting their flexibility when addressing financial or other future issues.

“We strongly believe that similar to ownership towns should have the ability to plug and unplug from a common network if they desire in the future,” said MBI Director Eric Nakajima. “They’re putting in the money, they’re putting up the cash in terms of the long-term borrowing as well as other taxpayers in the state and we think the towns should have the ability to adjust and make different decisions as they go forward. That’s true on the construction side as well as on the governance structure.”

“I would characterize our response as outrage,” said Steve Nelson, who chairs Wired West’s legal committee. “We’ve been hearing from our delegates and other people that were really stunned by this move. There obviously had been something that was brewing here, but we’ve been meeting regularly with MBI. I have in particular and there was no sign that they were about to do something like this.” 

The two groups have been meeting frequently since last year on how best to provide high-speed internet access to smaller, remote communities in western Massachusetts. Private companies haven’t seen the scattered population across hilly terrain as profitable enough to build their own network so people use libraries and town halls for speedy internet access.

MBI says it clearly stated in a policy outlined in July that the networks will be owned by the respective communities given that they will be constructed entirely using state and local investments. Nelson says by having the towns under one ownership entity that still holds true.

“Wired West and the LLC is nothing but the towns,” Nelson said. “They own it. They control it. So any issues that come up, operationally or financially, will be handled by the board of directors which is one representative from each of the towns. So there is an attempt to portray Wired West as a separate entity from the towns. Wired West is nothing but the towns.”

Nelson says the method is more stable and sustainable, adding that there is a provision allowing towns to withdraw and have their debt service repaid. He points to a review by CTC Technology & Energy of Wired West’s financial model, which found the plan to be well designed and a reasonable portrayal of its business. Wired West hired the Maryland-based consulting firm to evaluate its model using information provided by Wired West.

MBI controls $40 million for the project, about a third of the cost. Its letter states the agency will not authorize state funds for a project with core elements as proposed in the operating agreement and business plan.

“There’s no intention on our part to withhold funds or prevent towns from moving forward, but what we need to see for the state’s investment and participation in this project is a governance structure and sustainable operating plans that we think are going to demonstrate the qualities of a successful publicly responsive network,” Nakajima said. “We’re not withholding any funds from anyone. What we need to do is we need to develop a project that’s going to work.”

Nelson says 24 towns have passed borrowing authorizations totaling $38 million and doesn’t want to speculate on the financial viability just yet given the recent position of MBI. Wired West is holding a special board meeting open to the public at 9:30 a.m. Saturday at the old courthouse in Northampton where leaders plan to provide rebuttals to all of MBI’s statements.

“What’s really behind it is MBI does not want the towns to be able to organize themselves into a position of strength,” Nelson said. “They want to be able to deal with the towns one by one and control the game.”

Nakajima says MBI hopes to smooth things over with Wired West as towns decide whether to sign the operating agreement facing a January 9th Wired West deadline. In the meantime, a handful of towns like Otis have decided to build their own network.