After two years and spending more than $500,000, Madison is far behind and well short of goals for a pilot program to deliver low-cost internet service to four low-income neighborhoods.
The city’s private contractor, ResTech Services of Madison, had delays in extending fiber cable to the neighborhoods, and once there, found unexpected barriers in getting permission from property owners to connect to buildings and so far has signed up few customers.
The “Connecting Madison” pilot program has potential to bring service to 161 buildings with 1,083 apartments in the Darbo-Worthington, Brentwood, Allied Drive, and Kennedy Heights neighborhoods, with connections projected by the end of 2016.
But as of Friday, ResTech has made broadband service available to just 86 buildings and has only 19 customers with more intense marketing now underway.
The Wisconsin conservative think tank Maclver Institute first raised concern about the pace and cost of the pilot program earlier this month.
“It’s a pilot program,” ResTech president Bryan Schenker said. “Part of what we’re trying to assess is, what’s the demand and what are the barriers to bringing this service.”
Despite delays and setbacks, the effort is worth it, city chief information officer Paul Kronberger said.
“The digital divide is a serious issue in our society,” Kronberger said. “It creates a huge disadvantage for a segment of our population. The decision here is to do something about it and not sit back and lament that it exists.”
The pilot is part of a larger initiative still being studied to expand the city’s limited internet network to every resident and business, which could take more than $200 million in public and private investment.
A priority for years
The “digital divide” — the disparity between people with access to modern information and communications technology and those without — has been a priority for city leaders for years.
In 2013, the city formed the Digital Technology Committee to advise the mayor and City Council, with a primary focus of addressing the digital divide.
After more study, the city in 2015 sought proposals from vendors to build a network to be owned by the city and operated by the vendor to provide low-cost internet services to the identified pilot neighborhoods.
The city got three proposals — one for fiber to premises and the other two for wireless, and despite differences over which method was best, an evaluation team ultimately chose ResTech. The City Council awarded the contract in October 2015.
In March 2016, the city and ResTech signed a $512,000 contract to build a fiber-optic broadband network to residents in the four neighborhoods. ResTech would provide services for residential subscribers for $9.99 a month with unlimited data and a minimum speed of 25 MBps, plus a call center, 24-hour support, infrastructure maintenance and network monitoring.
ResTech would expand the city’s Metropolitan United Fiber Network, which serves schools, libraries, police and fire stations and other public buildings, to the target neighborhoods.
Nonprofit DANEnet, which helps Dane County nonprofits find and use quality information technology, would provide digital literacy training and distribute free donated computers.
In September 2016, Mayor Paul Soglin and others formally announced the Connecting Madison program that was supposed to deliver service to the neighborhoods for a fraction of prices then advertised by other providers such as Charter and AT&T by the end of that year.
ResTech, which encountered delays in getting equipment to lay the backbone of the system, eventually reached the neighborhoods and intended to first make connections in the smallest, Kennedy Heights on the North Side, which has just eight buildings and a single owner, Schenker said.
But it turned out ResTech couldn’t secure a right of entry to extend fiber cable to the buildings because Kennedy Heights has an exclusive agreement with another provider, he said.
“We did not anticipate the problem with the exclusive contracts,” Schenker said, adding that it took months to determine Kennedy Heights had an exclusive agreement with another provider. “That’s a lot of wasted time.”
The city didn’t anticipate the barrier, either, Kronberger said, noting that the city’s experience in extending fiber broadband is with its own facilities such as to police or fire stations.
“I don’t think it ever occurred to us at the city,” he said. “I don’t recall this coming up.”
The inability to connect to Kennedy Heights was “a disappointment to everybody,” Schenker said.
After hitting that roadblock, ResTech focused on Darbo-Worthington on the East Side, which also has a single owner but no exclusive contract with another provider, and by this past spring connected to all 21 buildings there.
The percentage, however, is far lower at Allied Drive on the Southwest Side, where ResTech has connected to 16 of 79 buildings, and Brentwood on the North Side, with connections to 27 of 55 buildings. ResTech found a mix of challenges in those neighborhoods, which have more buildings and many owners. Some owners had existing agreements with other providers, and some simply didn’t respond to requests for permission to connect to their properties, Schenker said.
“It became difficult to get a hold of everybody,” he said, noting that Soglin eventually sent a letter to owners in June that helped but still has not driven the overall percentage of building connections much above 50 percent.
And that isn’t expected to change much now, Schenker said. “We’re not going to keep pursuing new rights of entry after this year,” he said. “We’re going to focus on getting subscription sales up.”
Currently, ResTech has right of entry to 508 apartments in the 86 buildings but just 19 customers, with another 40 or so having expressed previous interest in the service, Schenker said.
“The progress is disappointing to all of us,” Kronberger said.
“If we stopped today, that’s not good,” Schenker said, stressing that it takes time to market the service to those with little or no computer literacy and that he hopes to sign up at least 30 percent of the roughly 500 apartments where the company has a right of entry. “I expect us to do better.”
So far, the city has spent $556,000 on Connecting Madison, most of it on ResTech’s contract and some funds to DANEnet, Kronberger said.
Since Soglin announced the initiative, DANEnet has provided training and computers to about 321 low-income households in the county, including about 138 in the four low-income neighborhoods, executive director Alyssa Kenney said.
But the large majority of those who got training and computers in the four neighborhoods are getting service through other providers who have access to buildings and have begun offering low-cost service, she said.
Although there are few subscribers now, Schenker said he hopes to be able to complete the pilot program, which concludes at the end of 2019, within the contract budget or for a little extra money.
The backbone of the system has been completed and it only costs about $100 for equipment for each apartment unit, he said. “We’re going to be very close to the actual budget,” he said.
The city’s Digital Technology Committee will continue to discuss the matter, Kronberger said, adding, “A pilot program is a learning experience. It’s something that’s never been done by this city. This is a learning experience for (ResTech) as well. We knew there would be things we’d find out.”
Meanwhile, the city continues to pursue the broader fiber-to-premises initiative with goals of equity, service to the entire city, competition in the marketplace, consumer choice and the city controlling a long-term stake in the asset.
The city spent $107,500 on a feasibility analysis from Columbia Telecommunications Corp. of Kensington, Maryland, that provided initial estimated costs, and is now funding a $189,000 implementation plan by the same company that should be completed in late 2017 or early 2018, Kronberger said.