Bringing Broadband Internet Service to Sandisfield - Status as of May 16, 2019

The Board of Selectmen has exciting news regarding making broadband Internet service available to the households and businesses in Sandisfield! As of May 6 the Board of Selectmen has accepted a new proposal submitted by Charter Communications for Sandisfield in response to the state's Flexible Grant Program solicitation. Prior to this decision the town had accepted (in April 2018) the proposal submitted by Crocker Communications. As of March 2018, three proposals had been submitted for Sandisfield in response to the solicitation. Crocker Communications planned to secure all funding necessary to design and construct a fiber-to-the-home network for Sandisfield via the Massachusetts Broadband Institute (MBI) Last Mile Program grant allocation for the town ($1,230,000), together with funding available for rural communities from the Federal Communications Commission (FCC) and the United States Department of Agriculture (USDA). However, as of May 1 Crocker Communications was able to secure only $63,000 per year for 10 ten years from the FCC. No funding from the USDA was secured as of May 1. As a result no service agreement between the town and Crocker Communications was signed.

On April 17 MBI informed the Board of Selectmen and the Broadband Committee that Charter Communications, Inc. submitted a proposal in response to the Flexible Grant Program solicitation. Charter Communications submitted their proposal following the recent execution of a franchise agreement with the town of New Marlborough. The members of the Broadband Committee thoroughly completed their review of the Charter proposal following the joint working meeting held with the Board of Selectmen and representatives from MBI and Charter Communications on April 30. The solution proposed by Charter Communications minimizes the town's financial risk and offers attractive services (Internet, telephone, television), rates (e.g. $14.99/month broadband Internet service for low income families and seniors), and low network connection fees to households and businesses via a state of the art fiber-to-the-home network not available from any other Flexible Grant Program respondent. In light of this most recent addition to the viable options available to the town via the Flexible Grant Program, the Broadband Committee considered the proposal from Charter Communications to be the most advantageous for the town. The Broadband Committee provided its recommendation to accept the proposal from Charter Communications, which the Board of Selectmen concurred with via a vote taken during their meeting on May 6.

Charter Communications has proposed to design and construct a state of the art fiber-to-the-home network in Sandisfield that will pass at least 96% of the households and businesses in town, excluding the households located in the Otis Woodlands community. Charter Communications will own, operate, and maintain the network. Per the proposal Charter Communications is requesting $2,607,800 from MBI and the town in order to design and construct the network. How will this request be funded? MBI’s Last Mile Grant allocation for Sandisfield is $1,230,000, creating a “funding gap” of $1,337,000. The state and MBI, in an effort to be both flexible and prudent, is willing to contribute 40% ($551,120) of the funding gap to help the town manage an affordable and sustainable broadband solution. In this scenario the town will need to finance 60% of the remaining gap amount ($826,680) plus interest, to be paid through a reduction of the level of state aid (referred to as the "Cherry Sheet") the town will receive over a number of years after the network is fully constructed and operational. Per this approach being offered by the state, the town's contribution will effectively function as a low-interest loan from the state. The state's Department Local Services (DLS) will be working with the Board of Selectmen to develop and finalize an agreement that allows the town to comfortably finance its portion of the funding gap.

So now that the decision has been made to accept the proposal from Charter Communications, what are the next steps to take?

1. MBI/state executes an agreement directly with Charter Communications to design and construct the network for Sandisfield. MBI/state funds and executes a contract with Charter Communications where MBI/state pays the full cost to design and construct the network.
2. Board of Selectmen negotiates a cable franchise agreement with Charter Communications.
3. Board of Selectmen negotiates an arrangement with DLS to pay back the town's funding obligation to MBI/state. The goal will be for the town to meet its funding gap obligation without borrowing or raising new taxes.

The Board of Selectmen and MBI plan to complete these above steps as quickly as possible. Once these steps have been completed, Charter Communications can begin with the make-ready process. Additional information regarding the services Charter Communications will offer to customers, and the associated rates, will be made available once a cable franchise agreement has been signed by both parties.

This report will be updated as new information becomes available. Stay tuned to learn more about this exciting development to bring broadband Internet to our town!