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Macon approves funding for broadband projects

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Wednesday, October 02, 2019
A map shows Little T Broadband’s proposed service areas for high-speed internet service. Courtesy of Little T Broadband. A map shows Little T Broadband’s proposed service areas for high-speed internet service. Courtesy of Little T Broadband.

Getting impatient waiting for private providers or the government to help in the effort to bring high-speed internet service to its rural communities, Macon County commissioners approved funding to support two community initiated projects already underway. 

After much debate among the board, commissioners voted 4 to 1 — with Commissioner Karl Gillespie opposed — to approve $500,000 for the Town of Highlands broadband project over the next two years and $178,000 for the Little T Broadband project to bring coverage to Scaly Mountain and Otto. 

“With what’s going on it seems the only way to achieve something is locally,” said Commissioner Ronnie Beale. “I’m tired of waiting.”

Macon County has been talking about ways to improve broadband throughout the county for several years. They formed a broadband committee at the beginning of 2017. A survey was conducted to see where the gaps in coverage were and the committee met with many providers to hear about the challenges of expanding broadband infrastructure in the rural county. The bottom line is that providers aren’t willing to install new infrastructure in rural areas because the expense can’t be recouped by the limited number of customers. 

The boardroom on Sept. 10 was packed with Scaly Mountain and Otto residents showing their support for the Little T Broadband Services project. The nonprofit has the goal of going after grants and private donations to develop high-speed internet access for those rural communities.

Scaly Mountain resident Bill Kirkman said bringing broadband access to his community was a critical need for business development, including people wanting to work from home. It’s also becoming a bigger concern because the only provider in those areas — Frontier Communications — has run out of capacity, which means new homeowners can’t get new internet service at all, much less broadband. Some homebuyers are finding Frontier can’t even provide them with a new landline phone in those areas. 

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“At the community center we wanted to get internet access for a hotspot and we couldn’t,” Kirkman said. “This is going to dramatically affect the resale value of our homes and businesses.”

Jim Gaffey of Scaly Mountain said he had a 30-year career in telecommunications before retiring from Bellsouth. 

“There’s a sense of urgency because we have residents who are losing internet access,” he said. “Frontier has run out of ports. They can’t provide new services and they don’t have any future plans to do so.”

Beale said he’s noticed how Frontier’s stocks have been dropping. 

“That can’t be a good thing — it’s a major concern for everyone in Macon County — not just with internet but phone service too,” he said. 

Gaffey concurred that the stock value decline is not a good sign and that Frontier could be delisted if the stock falls below a dollar per share. 

“They’re dealing with a serious amount of debt. They sold off their Northwest holdings — a large segment of new business — to pay down debt,” Gaffey said. 

Anthony Deakins, CEO of Little T Broadband, said the goal is to bring a minimum of 25 megabytes per second download speed to Otto and Scaly communities. He said the massive project would cost about $12 million — $5 million to run fiber in Otto and another $7 million for Scaly. His hope is to provide basic residential service for $45 to $50 a month with increased pricing for businesses needing more bandwidth. 

Once completed, Deakins said he believes Little T’s model will be able to be replicated by other communities wanting to take on the same kind of project. 

“We’re happy to share whatever information we have and will acquire throughout this process,” he said. 

While the Little T Broadband project is still in development stages, the Town of Highlands is already in the process of getting the fiber installed. Highlands Mayor Pat Taylor came before the commissioners to request county buy-in on a fiber optic network project to bring broadband to about 3,300 customers. The town took out a $4.6 million loan to pay for the 50 miles of fiber with plans to pay it back as revenues begin to be paid by customers. 

The one delay has been getting the fiber delivered. Taylor said the fiber had been on backorder but should be arriving by the end of September. 

“We hope to have it all up and running by April of next year,” he said. “I know the county’s not in the utility business and I understand that, but to me you can help facilitate and partner with other groups that feel they need to address this in their more local communities in the county.”

Legal questions

Commissioner Beale was quick to offer his support for the projects, especially since the board approved $400,000 in its 2019-20 budget for economic development projects. However, other commissioners and County Attorney Chester Jones raised questions about whether the county could legally support such projects. 

A law was passed in 2011 prohibiting local governments from competing with private utility providers by providing their own utility networks. The law was struck down in 2014 by the FCC but then the Sixth Circuit Federal Court overturned the FCC’s decision and that’s where it stands now. 

“It seems like a good idea but we have to find the legal authority to do what you’re doing or we’ll have problems,” Jones told the board. 

The town of Highlands started its own utility company Altitude Community Broadband when the law was overturned by the FCC, but then had to come up with a different plan when the courts reversed the decision. Now the town is working with Wide Open Network, a company that will allow any provider to use the fiber being installed to offer broadband and other utilities. 

Beale made the motion to approve $250,000 for the Highlands project and $89,000 for the Little T project immediately — if permissible by law — and to evaluate the projects’ progress in another year before approving the other half of the funds requested. 

Commissioner Gillespie said bringing broadband to Macon County has been one of his top goals since being elected to the board. 

“It all comes down to money and we really need federal money to get us where we need to be. The state has recognized they have to play some part in this but if we wait for the state and feds to save us, we’ll be sitting here on dial up waiting for that to happen. It’s gonna take local initiatives for this to happen,” he said. 

On the other hand, Gillespie said far more of these local initiatives have failed than succeeded. He advised the county to be careful in how it structures its support for these types of projects using taxpayer money. If the county is allowed to fund broadband projects, he said it would be better for the board to take some time and come up with a fair and equitable formula to go by instead of simply approving arbitrary funding requests. 

Beale said he disagreed with Gillespie and thinks the Highlands and Little T projects will create a template for future partnerships if other communities want to do something similar. 

Commissioner Paul Higdon said he’d also like to see movement on the broadband issues but agreed with Gillespie that the board needed to set some parameters. 

Commissioner Gary Shields seconded Beale’s motion.

Commission Chairman Jim Tate said he agreed with Beale but also had some of Gillespie’s reservations. 

“But I don’t want to hold us back. I assure you I’ll be pushing to come up with some kind of concept we can agree upon moving forward,” Tate said. 

The motion passed 4 to 1. In the meantime, Jones will be checking on the legalities of the county’s contribution and will draw up interlocal agreements between the county and Highlands and Little T Broadband. 

Learn more at www.littletbroadband.org.

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