(This
is the final installment of our series: The Last Mile: While Rural
Broadband is So Difficult and How Paulding County is Leading the Way in
Providing Access)
PAULDING – When the state of Ohio opened
applications for its Ohio Residential Broadband Expansion Grant, there
were no local internet service providers who bothered applying for
Paulding County. Few saw the point, as Paulding County failed to meet
criteria such as being an economically distressed county. Nor did it
have large numbers without access to broadband.
“It was clear to
us and some other local providers that it didn’t fit,” said Eric
Roughton, general manager of Arthur Mutual Telephone Company. “There was
already good enough broadband coverage, using FCC maps that we
reference. Other people didn’t see it that way.”
The “other
people” Roughton is referring to is Spectrum, who applied for a grant on
behalf of the county. In its application, the company applied for a
$10.629 million dollar grant to serve 2,517 households including
according to their application, 1,734 who were unserved. The amount
requested was half of the total cost estimate for the project of $20.697
million.
Spectrum’s application for Paulding County reflected a
broader strategy the company employed statewide, in which it submitted
applications totaling more than $671 million dollars for the first round
of funding, promising to connect 106,000 locations in the state. The
company admitted in its own applications that some counties were wishful
thinking, writing, “we realize this exceeds the total available in the
program, but we are committed to building more broadband in the state
and look forward to participating in future rounds.
In a statement
to The Paulding Progress, Spectrum cited their “strong track record in
rural expansion through public-private partnerships like the Rural
Development Opportunity Fund [which provided rural subsidies for
broadband infrastructure construction] and state broadband grants, as
well as 100% company-funded expansions.”
According to Roughton,
Arthur Mutual challenged over 1,000 addresses Spectrum claimed didn’t
have service. “They were applying for grant money, and Arthur already
had fiber in front of those houses. And they [the state of Ohio]
accepted our challenge.”
BroadbandOhio did not end up awarding any money to Spectrum’s application for Paulding County.
That
wasn’t about to stop Paulding County from providing access to those
lacking last-mile service though, and it was going to use stimulus
dollars from the American Recovery Plan Act to do so.
“You had to
spend it right and you had to apply for it, there were very few of these
funds that had been spent,” said Paulding County Commissioner Mike
Weible, who took the county’s lead on broadband expansion soon after
taking office.
First, he had to overcome resistance from
townships. “On a couple of occasions, I got, “well, you know, we’ve been
asked before to send our ARPA funds into the county. We’re not doing
that, because we won’t ever see it back.”
Weible returned to the
local internet service providers (ISPs) and they agreed it would be
possible to do builds by township or villages. For every ARPA dollar the
township or village was willing to spend on broadband expansion, the
county would match with its ARPA funds.
Currently, Auglaize,
Brown, Carryall, Crane, Jackson, Paulding and Washington Townships took
the county up on its offer, as well as the village of Latty. Bids have
been awarded for each.
To date, $1.1 million of ARPA funds the
county, townships and villages have received are committed to or have
been spent on broadband expansion. When added to what local ISPs are
spending on construction, $2.8 million of local public-private sector
investments have been made. In practical terms, over one thousand homes
that lacked access will gain it when the builds are completed. This
represents nearly twelve percent of the total households in the county.
The
Paulding Progress divided both the total cost and the grant amount
requested by the number of households served to determine the cost per
household served for both the rejected Spectrum proposal and the county
projects. We discovered that the county’s approach offers substantial
savings in both the total cost and the amount of tax dollars required.
Spectrum’s
per-household served total cost would have been $8,222.96, while the
county’s per-household served total cost is $2,790.10. The tax dollars
required for subsidizing Spectrum’s build would amount to $4,222.96 per
household served, while the tax dollars (ARPA funds) subsidizing the
county builds are $1,124.70 per household served. The per-household
savings amount to $5,432.86 in total costs and $3,098.26 in taxpayer
subsidies per household served by Paulding County’s strategy.
While
we realize Spectrum’s application would have served over 1,500 more
homes, if we assume Paulding’s per-household mean costs could be
extrapolated to serving the same amount as Spectrum’s proposal, matching
the number of homes served would increase the county’s estimated cost
to $7.02 million and its taxpayer contribution to $2.83 million.
Therefore,
if the mean per-household construction rates bid were used to expand
coverage to the levels Spectrum offered, it could do so at a savings of
$13.58 million in total costs and savings to taxpayers of $7.8 million
if the county were able to serve the same amount of households Spectrum
proposed, using the mean costs the county projects are currently at.
To
be fair, we don’t know exactly which homes Spectrum planned on serving
that the county isn’t. These homes could be in parts of the county that
require significantly higher construction costs than residences the
county is focusing on. Even so, our analysis seems to show that by
partnering with townships and local ISPs, there are real, tangible
economic benefits to the county in addressing the broadband issue using
its current strategy.
One way that Sherwood Mutual Telephone
Association (SMTA), one of the local ISPs contracted with, is by doing
the construction themselves. “Everything is in-house, so I’m not paying
someone to do it. I have control over what my costs are,” said Rick
Rostorfer, SMTA general manager.
Once completed, the county will
not own any of the infrastructure. According to Weible, “The county is
not getting into this utility. What are goal is, is the same goal of the
ISPs: Get as many homes as we can.”
For that reason, Weible
cautioned that not every home in the township can be served by the
build, and ultimately it is up to the ISPs to determine what is
profitable. He added, “For them, we are a one-time shot. Financially,
when we walk away from it, this build has to work for them.”
“I
can’t create competition. Our idea is expanding availability. We want to
go where there isn’t any. We want to expand broadband access not
competition to access.”
As it currently stands, a thousand homes
who lacked access to high-speed broadband in Paulding County will soon
have it because of the vision of the county commissioners, townships
trustees and a village council and local ISPs.
(Adam Papin is the editor of The Paulding Progress. He can be reached at progress@progressnewspaper.org)