TRAVERSE CITY — Gigabit-speed internet on a Traverse City Light & Power-owned fiber-optic network could have a bright future.
The city utility's board members will get a better idea of its actual potential after data networks builder and operator Fujitsu Network Communications inks a plan for how the utility could take its first step of expanding its existing fiber-optic assets to serve up to 2,200 customers.
The utility board voted 6-0 at a recent meeting — board member Elysha Davila was absent — to pay Fujitsu Network Communications up to $25,000 for a business, design and operations plan for that first expansion foray. They could have the plans as soon as April, according to information presented by company Senior Vice President Gregory Manganello.
Manganello explained why the company was offering the rate it was — utility Executive Director Tim Arends and Telecom Manager Scott Menhart noted in a memo that another company quoted a price nearly four times as high for the same plans. The city already owns a fiber-optic network upon which to build, among other "ingredients for success," Manganello said.
"We think it's really interesting what you're trying to do, we really think that the assets that you have in place today as far as poles are really interesting and as far as rights-of-way, and you have fiber today," he said.
The vote brought the utility even closer to making real a concept the utility board has investigated for three years. TCL&P could decide to build and own the fiber-optic network and provide internet connections of up to 1 gigabit per second — cellphones connected at 4G LTE speeds download at a fraction of the speed.
Plans so far call for a phased approach, with the utility building out its network so that any electrical customer hooked to its Hall Street substation could pay to connect. Previous estimates put that phase's cost at $3.6 million.
A phased approach makes sense and limits the amount of risk the utility takes on, so long as TCL&P communicates that it doesn't intend to leave out those who aren't covered in the first phase, Manganello said.
But board President Pat McGuire said his concerns with the phased approach haven't gone away. He believes the board should either have the confidence to build out the network completely, or drop the idea.
"If we get stuck on a phase one, we've got one leg over a barb wire fence and we can't figure out how to get the other one back," he said.
The plan could include less-detailed information on future phases, Manganello said.
Arends said the board could task Fujitsu with executing those plans or seek bids from other companies.
Manganello said choosing Fujitsu wouldn't obligate TCL&P to using Fujitsu's own network equipment, and the company uses dozens of other manufacturers' products depending on a customer's needs.
McGuire said he's concerned the business plan Fujitsu provides could be skewed by a conflict of interest of sorts, since Fujitsu is a potential operator of that network. He ultimately supported paying Fujitsu for the plans, but argued they may only look good "on paper" and that board members will have more work to do once that plan is complete.
Audience member Gerald DeGrazia said he thought the utility should drop the idea and carefully vet the business plan Fujitsu provides.
Board member Amy Shamroe said she's heard some opposition recently but that most public feedback concerning whether the utility should build the network has been overwhelmingly positive.
Some national anti-tax organizations oppose the utility's plans, just as they have fought other government-run broadband networks. They have sent emails and flyers to residents and city leaders.
Board member John Taylor requested a process for utility staff to consult with the board while Fujitsu is formulating the plans to ensure the board and staff have the same ideals for the network in mind.
Arends responded that the board needs to form a consensus on what a successful outcome means for a deployed fiber-optic network. Success could mean building out something that could pay off 10 or 20 years down the road, or simply offering the opportunity for the city to become a tech hub, he said.
"So that's something maybe that could help staff as we go forward and as we put this plan together, to vote on in the next 90 days, how are you going to determine success so that staff can be held accountable to that and the board itself can be held accountable to that, and it may not just be money," he said.