Fiber For Our Future supporting Tri-City Broadband for Batavia, Geneva, and St. Charles, Illinois

Citizens of Batavia, Geneva, and St. Charles Illinois
in support of Municipal Broadband
for our Communities

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local government
City of Batavia
City of Geneva
City of St. Charles

 

ANSWERING YOUR QUESTIONS

We have received several emails with the same questions, and rather than answer each email individually, we are posting the questions and answers here, for our convenience. For more information, please check out the city links to the right, particularly the FAQ section which addresses most of these questions.

1. This is going to cost at least $62 million, right? If it doesn't fly, won't that equal about $2300 per household? Wouldn’t that amount increase by 1/3 if one of the cities decides not go forward with the project?
If one of the three cities decides not to go forward, the cost for the two remaining cities (if they decide to go ahead with the project) would increase approximately $4 to $6 million. Funding for the project will come from general obligation bonds which have to be paid back over 15 years, not in one lump sum. There are over 500 communities in the U.S. with some form of a municipal utility providing cable, Internet, telephone or some combination of the three. Not one of them has failed. Not one of them has resulted in higher taxes. If however, our communities become the first in the nation to fail, we would be obligated to make the annual payments on the bonds. There are a number of ways this can be accomplished. Some of it would be covered by the user fees; the fiber network could be leased to other businesses; revenue from sales taxes could be tapped. Worst case scenario, if no one signs up for the service and every dollar has to be repaid from property taxes, it would result in about $145 a year on a house with an assessed value of $200,000. That's not the market price for the house, that's the assessed value of the house that is used to compute property taxes.
2. You say you won't increase property taxes to fund this but if it doesn’t work, how do you intend to fund it? I heard our electric rates would then go sky high.
The rumor about escalated electric rates is ridiculous. The city electric is a separate business entity and is NOT a tax. They can't raise electric rates to pay for anything except electricity. As I mentioned in the previous answer, if there are not enough subscribers to pay the full annual payment due on the GO bonds, there are other ways to make up the shortfall.
3. How much of the market share do you need to get to make this project successful? (I heard you have to get 30% right away--most companies are lucky if they get 7-10% penetration, after they spend $ millions on advertising and marketing.)
The Feasibility Study projected that we should get up to 34% of the residential cable market in our area, but we need to get less than 25% for cable, less than 4% for Internet, and about 5% for telephone to break even. And we don't need those percentages on day one. Remember, the repayments are spread out over 15 years. And 74% of the residents surveyed said they would be interested in a city-owned broadband utility
4. Is it true that Geneva already has its license for this? Why would they, if they were waiting for the "will of the people."
Geneva is currently building a fiber optic network connecting the city offices, emergency offices and schools. Batavia and St. Charles already have a fiber network connecting their city, emergency and schools. This was a separate project that had nothing to do with the current proposal. None of the cities has made any move in regards to this referendum, beyond the feasibility study. And Geneva, in particular, is not a home rule town and MUST have voter approval to proceed. St. Charles and Batavia referendum questions are "advisory" in nature and are like an opinion poll.

It is true that all three cities have CLEC status. This was done primarily to allow the installation of fiber optic cable on non city owned poles (for example ComEd). In many instances, in order to serve the school districts with fiber optic connectivity, the cities have had to use non city owned poles to reach schools that fall within the school district boundaries, but are not located within city limits.

5. Is it true that the company that did the latest study for the Tricities (advocating the network), has a sister company that would substantially benefit from the bond work available on the project?
No, this is not true.
6. Is this tied to a tax increase for the school funding referendum? My friends insist it is.
The city and the schools have two completely different revenue streams and taxing bodies. It is not possible to use one dollar of money from the city funds for schools and vice versa. Tax increases for school funding have absolutely nothing to do with the broadband initiative.
7. Have the cities paid for any of the technical preparation for the municipal broadband such as the inner ducts and cable I have seen throughout my neighborhood? If so, how much?
The city owns its own electrical utility, and if you see city trucks working with cable, it may be electric. You may also see trucks working on our existing municipal network that serves all government buildings, school buildings, and electric substations.

Not one dollar has been spent "preparing" the infrastructure for a project that has not even been approved yet.

8. This all sounds great for the folks within the city limits but what about those of us in the township area? This doesn't do anything for us. Is there anything proposed?
At this point in time, because of the economies of piggybacking on our own electric system, the fiber optic network would initially only be built to existing city electric customers. We're not sure what the plans might be for the township. Hopefully this is so successful and brings in enough revenue that the township areas can all be included at some point.

 

 

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© 2010 Fiber For Our Future, a citizen group from Batavia, Geneva, and St. Charles

info@tricitybroadband.net

   
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