Sean Fitzgerald and members of the South Hadley Electric Department speak with a resident at Longmeadow Pride about a potential Fiberspring town-wide internet service.
Reminder Publishing photo by Sarah Heinonen
LONGMEADOW — The Select Board voted on Sept. 3 to implement the Municipal Fiber Task Force’s recommendation and see if the fall Town Meeting will vote to move forward with a townwide fiber optic internet network through Fiberspring, the fiber optic internet component of South Hadley Electric Light Department.
Longmeadow Select Board Chair Vineeth Hemavathi said Longmeadow’s Municipal Fiber Task Force recommended Fiberspring because of the “breadth” of SHELD’s experience. “We feel comfortable that they’re going to be able to advise us to make the best decision for the town,” he said.
Fiberspring uses fiber-optic transmission, which sends information via light pulses along cables consisting of thousands of glass or plastic fibers to deliver the internet to its customers.
Fiber offers one benefit that traditional copper wire cannot. With cable transmission, the information must take turns being sent from a device to the provider and being sent back to the computer. The upstream speed is also generally slower than the downstream speed. With fiber-optic transmission, data can travel in both directions at the same time and at the same speed. The technology is scalable and can handle increased capacity as needs increase.
SHELD and Fiberspring General Manager Sean Fitzgerald explained that Fiberspring is an integrated internet service provider, with SHELD initially providing project management, materials engineering and construction, marketing awareness campaigns home and business installations. Once the service is up and running, SHELD handles customer service and billing, network management, technical support and emergency response. It also offers eligible customers access to Lifeline, a program that helps low-income individuals obtain internet access, and provides E-Rate discounts to schools. Holyoke Gas & Electric furnishes the ISP’s network operation services.
Holyoke Gas & Electric has been operating as an internet service provider for nearly 30 years. In 2018, it partnered with SHELD, which introduced Fiberspring in 2019. Fiberspring serves 4,100 broadband customers and 1,359 phone customers in 17 Western Massachusetts communities.
Because SHELD is a department within South Hadley’s town government, Fitzgerald explained that the two towns would sign an intergovernmental agreement. Longmeadow would create a municipal light plant board, which would be in regular contact with SHELD.
Tim Haas of Holyoke Gas & Electric said Longmeadow would own the infrastructure “on the poles.” This triggered a conversation about the feasibility of burying the network, in the same way areas of the town have other utilities underground.
A member of the SHELD team explained that burying the entire network would be prohibitively expensive, but said the parties could discuss burying the infrastructure in areas with existing underground utilities.
There are several options for funding the buildout. John Hine, chair of South Hadley’s Municipal Light Boards said the town could bond for the cost of the network, adding the cost to the town’s debt service and taxes. Once the town reaches a certain take rate, the debt service would be covered, functioning essentially like an enterprise fund. This was the method South Hadley chose.
Select Board member Andrew Lam said residents may push back against the latter model, especially if they do not plan to use the system. “So, they might say, ‘It’s not fair to tax me for something I’m not going to avail myself for.’”
If the town were to decide on a user-funded model, a portion of the user’s internet bill would cover the cost of the buildout, while the rest would pay for the service. After the cost of the buildout is covered, that portion of the bill could become town revenue.
Whereas, in Shutesbury, the town decided to charge people who committed to the system for the infrastructure up front, rather than bond for it.
Based on preliminary data, if the town were to bond for the entire cost of the buildout, Haas said the $27.25 million costs would be broken down into $1.61 million annual payments. With a 40% take rate, the town would break even. At 50%, the town would see a $325,309 net surplus. Most towns see a 50%-60% take rate.
Select Board member Mark Gold said he was concerned whether the tax base could support the debt service before it becomes profitable. He suggested only borrowing enough to get through the first few years, until the take rate is higher.
Lam inquired about yearly price increases, but Fitzgerald said Fiberspring has not increased its price from $70 since it was created almost seven years ago. He acknowledged that SHELD consistently reviews the price and cost of providing the service, particularly due to recent inflation. Haas added that internet service is a highly competitive environment. “So, when the cable company gets wind, you’re going to see your cable prices come down.”
Fitzgerald boasted a 95% satisfaction rate in surveys sent to customers after one week, three months and one year of service. He said SHELD provides “white glove” service and will spend as much time with customers as is needed.
Select Board member Dan Zwirko asked about the timeline and onboarding process. Hine explained that SHELD would divide the town into “fiberhoods” and gather information to see where the most interest lies. Those areas would be connected first. “Once this starts,” he said, “people are going to want it.” However, he sought to tempered expectations, telling the Select Board it would take up to five years to install fiber town-wide.
On the other hand, Fitzgerald said that once the installation is complete in a fiberhood, onboarding is simple. Fitzgerald said SHELD would schedule a visit with interested customers, assess their needs and schedule an installation.
The articles that will be considered at Town Meeting would finalize the town’s municipal light plant, the preliminary vote for which passed at the spring Town Meeting, and approve $400,000 for pole applications, and design and engineering costs. Gold said he was concerned about spending that much money before a financing model had been chosen. Select Board member Josh Levine characterized it as an investment. “The whole town could make money on this,” he said. Lam agreed, but acknowledged, there is a benefit to not borrowing money when interest rates are high.
