October 24, 2014

Medina
Mostly clear
40°F

Stimulus money sought for fiber optic project

Work on the countywide fiber optic project could begin this fall, but before that happens, those working on the project have to figure out how to pay for it.

OneCommunity, the Cleveland-based nonprofit that has been working on the project since December, will apply for federal stimulus money to pay for up to $1.9 million of the $8.3 million project. The rest of the money likely will come from bonds, those associated with the project say.

“We’re really drilling down to the details now on how we’re going to get it financed,” said Bethany Dentler, executive director of the Medina County Economic Development Corp.

Plans for the ring, which would expand broadband offerings throughout the county, have been under way for seven years. Originally set to be 88 miles long, the ring’s route was expanded to 155 miles in April and will lead into existing fiber optic networks in Cuyahoga and Summit counties.

The loop will serve only institutional — such as schools and hospitals — and business clients through the network, said Jim Gerspacher, who chairs the county’s fiber optic committee.

Officials with OneCommunity were at the Medina County commissioners meeting Monday to ask for support for the stimulus application they will submit this week. The American Recovery and Reinvestment Act appropriates $7.2 billion to supply broadband to “unserved and underserved communities across the U.S., increase jobs, spur investments in technology and infrastructure, and provide long-term economic benefits,” according to www.broadbandusa.gov.

Dentler said she also is looking into state grants that might be able to fund portions of the project. But she said the bulk of funding will come from borrowing money via bonds through the Medina and Summit County port authorities, and Recovery Zone bonds, a loan source created through the federal stimulus act.

She said once the funding sources are set, it should take 60 to 90 days to receive the funding and start construction. It would take about 18 months to finish the project, but clients could begin to receive broadband service as soon as portions near them are completed.

Dentler said the loop could bring in some large new businesses to the county.

“It’s a particularly attractive form of economic development because it attracts companies who need high-capacity broadband options,” she said.

She said these “data-centers” could be “large-job generators for Medina County.”

Concerns

The fiber optic project isn’t cut and dry, said Karen Wolff of Armstrong Cable’s Medina office. She attended Monday’s commissioners meeting, where representatives from OneCommunity, the Economic Development Corp. and county officials discussed the project. Wolff told them broadband is already in place in much of the areas the project would touch.

“There’s nothing new about this. It’s just fiber up on poles or in the ground,” Wolff said Monday.

But Dentler said broadband companies currently work off “a territorial model” where one company doesn’t cross into another’s area. She said that wouldn’t be the case with the “neutral network” the county plans to build.

“Say, Time Warner could hook into the fiber network and access a whole new world of customers,” Dentler said. “And the same goes for Armstrong.”

The increased accessibility would create more competition, Gerspacher said.

“There are higher costs (for broadband) when you only have one or two options to choose from. Cost is a major factor,” he said.

But Wolff warned that with added competition for broadband, the county could have a problem paying off bonds for the construction of the fiber optic loop.

“The fact is in competition, are they going to get enough business to pay off a loan? Or will this fall on the shoulders of Medina County residents?” she said.

Gerspacher told commissioners he has been in contact with businesses throughout the county that have expressed interest in purchasing broadband through the loop. He said he is working on more formal commitments from those companies.

Wolff also said the current economic state could affect loop revenues.

“Is this the time that you’re going to commit to a high-risk project?” she asked commissioners.

Contact Maria Kacik at (330) 721-4049 or mkacik@ohio.net.