Rural broadband partnership in the works

Danville Telecom offers to build $5.5M fiber optic network through Lee County with state, county grants

BY CHUCK VANDENBERG
PCC EDITOR

LEE COUNTY - Danville Telecom CEO Tim Fencl is from this area and says no one should be without broadband service.

"I don't want to run into someone in the store who tells me their Internet service is bad," Fencl said Tuesday afternoon. "I'm from this area and I don't want that for people."

Fencl had just met with the Southeast Iowa Regional Economic and Port Authority board, at the KL Megla building near Montrose to discuss a potential partnership to build a fiber optic backbone right through Lee County to target the most rural underserved areas of the county.

The partnership includes working with SIREPA on grant applications and a structure where Danville Telecom would own the service lines to customers and the equipment, and SIREPA would own the fiber optic backbone and would lease the infrastructure to the local communications company over a 10-year period.

The costs of the broadband upgrade would be about $5.5 million, according to Mike Norris of Southeast Iowa Regional Planning Commission. Southeast Iowa Regional Planning Commission administers services for SIREPA.

Fencl said Danville would apply, in a very tight window, for an Iowa grant administered through the state's Office of the Chief Information Officer. That grant would be for a 65% match of the $5.5 million. The other 35% would come from Lee County's American Rescue Plan Act funding. The OCIO grant applications are due Wednesday.

The county has already received $3.25 million in ARPA funds that are currently in an interest bearing account as county officials determine when and how the money should be spent. Those guidelines are supposed to be released before the fall, but a committee overseeing the ARPA expenditures in Lee County said 30% will be spent on broadband expansion in the county, especially projects that use the money as matching funds for additional grants.

The project would bring Tier 1 service to about 120 customers in Lee County, but would also provide what Fencl called a "future proof" fiber optic backbone that can be upgraded to meet increased speed demands of the future.

Tier 1 service would provide 25mbps download speed and 3mbps upload speed. Fencl said ARPA funding would require the work to tackle only Tier 1 service, and requires the work to be capable of providing speeds up to 100mbps upload and download.

"Basically you're building the backbone for the future because you don't need to rebuild this infrastructure to create those greater speeds. You change the electronics out to provide the gigabyte speeds that we all foresee coming in the next five to 10 years," Fencl said.

Fencl also said the 121 customers that would be provided Tier 1 service would not be charged a hook-up fee. He said this is just a first step in getting the county up to Tier 2 and Tier 3 service which are faster speeds.

"This is the first step, but one of the things we wrap into this project is the lease back of that fiber backbone that would give SIREPA additional funds every single year to put back into broadband funding so we can go after the Tier 2 and Tier 3 locations," he said.

SIREPA board member Bob Dodds asked Fencl why he wouldn't be charging a hook-up fee to help create another revenue stream to help fund future upgrades.

Fencl said he considers he current customers shareholders in his company and wouldn't want to charge them for the service. However, he said anyone who comes on after the initial rollout would probably be charged a hook-up fee.

"In the case of Lee County, I'm trying to serve areas that are underserved and I don't want there to be any hurdle for that individual to take our service. Where I benefit from them taking our service is that consumer will have our product for the next 3, 5... 10 years."

He said the lease-back payment to SIREPA amounted to 50% of the depreciated value of the fiber optic backbone over 10 years.

The SIREPA board approved a resolution supporting the plan unanimously.