County Board discusses use of ARPA funds for broadband

 

[February 07, 2022] 

At the Logan County Board’s Planning and Zoning Committee remote meeting on Wednesday, February 2, the committee heard a broadband proposal from Steve Bergeron of the telecommunications service provider WANRack.

Committee member Keenan Leesman previously talked to the board about broadband as it pertains to American Restoration Plan Act (covid relief) funding. He has identified companies who can help the county develop, design, maintain and implement broadband.

WANRack reached out as one candidate who can make that happen. Leesman feels they meet the model he would look for in a company. He asked Bergeron to share what WANRack does.

Bergeron is WANRack’s Director of Business Development for the Northeast quadrant of the United States. He has done work in Illinois, Wisconsin, Virginia and West Virginia.

In his presentation, Bergeron shared who his company is, what they do and how long they have been doing it. He talked about what they are doing in counties right now and what funding is available.

WANRack has been around for 10 years and started by doing fiber optic networks for school districts. They then started reach out to municipalities to anchor institutions in cities and counties through municipal relationships.

The company has been developing fiber networks throughout the country. Bergeron said they are currently in 24 states with about 85 networks. Altogether, WANRack has done around 214 networks across the country.

WANRack has experience in federal funding processing and getting grants approved. They also are experienced in building fiber WAN (Wide Area Networks) and getting the work done.

A November 2021 the federal infrastructure bill allocated $65 billion for broadband and building fiber networks across the United States. More funding is available through ARPA and other sources. Bergeron said there are all kinds of dollars to build these networks throughout the country.
 

To set up a broadband network throughout the county, first county locations would be connected. Connectivity could be done through Lincoln and Hartsburg and Mount Pulaski and other communities.

The communication networks connect first responders, EMS, water management organizations, traffic light management and more. Bergeron said the target is to have a communications network that has unlimited bandwidth.

As the fiber optic network is built with more strands, Bergeron said it could be fiber to home, fiber to business or whatever the county needs. This is done through what is called an Open Access Network model.

When an internet company comes into a city like Lincoln, Bergeron said that internet company would want to build a network in the city and provide their internet service over that network.

In an Open Access Network model, Bergeron said you build the network one time. Once the network is built, the county can invite internet service providers onto that network. Each provider comes and uses the network that is already there. Bergeron said that separates the physical network and the provider for the services on the network.

Potential revenue stream for county

As WANRack sells network to Internet Service Providers, the county could require internet service providers to give the county a revenue share.

As revenue builds, Bergeron said it can be used to advance the build of the network into whatever the next phase is.

What the county would have is a network being built hopefully by local communications people and electrical companies. WANRack would subcontract with them because it is not a construction company. WANRack is a design and build fiber network manager.

If the subcontractors are from the county, Bergeron said revenue stays in the county. In addition, the tax base increases and economics increase. As Internet Service Providers come in, the tax base further increases as it brings in more sales for the services they provide.
 

When more than one ISP comes in, Bergeron said, competition between them drives prices down and customer service up. Constituents in the county may be more likely to choose a provider not only for the price, but for how good their customer service is.

The county could use the network for physical operations, water management, traffic light management, secondary education, for example. Bergeron said it could also help with telehealth enabling people to do videoconferences with doctor’s offices. That saves medical facilities money.

Once the network is built, Bergeron said there could be a wireless network for the underserved and unserved areas of the community.

For the public/private partnership, Bergeron said they could help the county with the grant process. WANRack is backed by the largest infrastructure provider in the United States, CBRE. CRBE is the largest real estate manager in the United States and owns many data centers and now own WANRack. WANRack is CRBE’s only fiber provider.

Bergeron said WANRack would participate in funding the right opportunities and do a revenue share with county. He can try to help matching funds available for a project. Bergeron and Leesman are waiting for information from the state of Illinois about one round of grants. Bergeron hopes to help the county get the broadband coverage it needs and fiber services it wants.

Once Bergeron finished his presentation, he asked if anyone had questions.

County Board members questions

With the various sites WANRAck has, committee member David Blankenship asked how many were in Illinois and if any counties were contiguous with Logan County.

Though WANRack has worked with school districts in Illinois, Bergeron said they have not yet worked with counties in Illinois.

In Taylor County, Wisconsin, WANRack has done a $12 million network build covering 34 locations over an 80 mile range. They have been working with a county in Arizona in phases going from one city to the next. Other networks have been set up in Iowa and Florida. Bergeron said they are doing quite a bit of work in Arizona and Florida right now.
 

If repairs are needed, Blankenship asked whether WANRack calls other subcontractors to do them. He wondered if there would be a time issue due to the availability of subcontractors.

In WANRack’s service agreement, Bergeron said they put in a two-hour response time. The company must respond within two hours, and someone will fix the problem within four hours. Subcontractors are used to do the repairs.

Over the past five years, Bergeron said technology has gotten so good the company can pinpoint fiber cuts within a couple hundred yards. By shooting light from one end to the other, the company can figure out about where the cut is and call responders to take care of it.

Committee member David Hepler wanted to know estimated cost for something in Lincoln emanating to Mount Pulaski, Elkhart, Broadwell, Atlanta, and the Hartsburg-Emden area. Hepler also wanted to know how many miles would be covered.

Right now, Bergeron said he is still working on getting numbers and hopes to get them in the next few days.

The committee was told last month they would have cost estimates this month. So, Hepler was disappointed saying the committee was expecting more solid numbers from the company when they presented their proposal this month. Hepler was hoping they would have some numbers by now.

Since WANRack has worked with other areas, Hepler wanted an estimate of costs the county might be looking at per mile and how many miles might be covered.

Florida has water and Arizona has mountains and rocks to go through. That is different than going up and down highways in Illinois. Bergeron estimated that costs would be $100,000 per mile less than costs in those areas. In Virginia, the costs are $185,000 a mile.

To show committee members where broadband might go to, Leesman displayed a county map on his screen. With Lincoln as the central location, Leesman estimates going 10 to 12 miles in each direction to areas like Mount Pulaski, Elkhart, Emden and other communities. Leesman said it boils down to cost per mile or whether it is done in phases.

The county would probably be looking at between 50 to 60 total miles for setting up a network. Leesman said it could include underserved areas like Hartsburg and Broadwell. It could also include New Holland, Burtonview and Beason.

Outside of Lincoln, Leesman said Atlanta and Mount Pulaski are clearly the larger of the villages. These places might have good opportunities for development to begin with.

What Bergeron would suggest is building out from Lincoln to those communities and then the locations in those communities. Once they get into the communities and connect the anchors, the network may cover closer to 70 miles.

When fiber optics are placed, Blankenship asked Bergeron what percentage he thought would be above ground versus underground. He would like to see as much of the fiber as possible buried because of the storms we have in the county.

Depending on costs, Bergeron said they are generally in the 50/50 range for above ground and underground fiber optics. Both have their inherent problems.

For what looks to be a $6M project, Hepler asked how necessary it would be for the county to commit ARPA funds to secure financing.

Both the State of Illinois and National Telecommunications Information Association (NTIA) will do matching funds. Bergeron said the county must put up funds in order to get the matching funds.

When the state sees work is being done, Bergeron said they are more likely to match the request for funds. After getting ARPA funds and state match and starting the network build, Bergeron said his company can go to NTIA with the county to ask for more funding. NTIA wants to see what is being done.

To secure those funds, Hepler said it sounded like it would be necessary to use some ARPA funding. At recent meetings, Hepler said they were told there was state and federal money available that would not require ARPA funding.

The network could be set up in phases, so Leesman said it comes down to working through priorities of other projects the county has been discussing. Then, the board could see where this project would land and how big the county would want to go if it committed to a broadband project.

The concern Leesman has if the county does the project in smaller chunks and commits $1M and then gets a million in matching funds; he wanted to know what timeline the county could ensure other communities could also get on this network.

If the project is not done in a bigger approach, Leesman said it will likely take many years for the project to become a reality. Leesman wants the county to cover as much as they can with what they are willing to allot. That way, the county is not waiting five or more years for the next round of funding because the matching funds finally came in.

With matching funds, Leesman said the county could leverage what they have and exponentially grow it with other opportunities.

For work to be done by June 2023, Bergeron said it would be good to have agreements in place in the next three or four months. If the project is done in phases, Bergeron said it could have a snowball effect. The county could later go to NTIA and ask for more funding while working towards completing larger parts of the project in 2024.
 

Once the access place is ready, some of the revenue will be shared and can be further invested.

To sustain the county, Blankenship said they need to do something. Blankenship feels the county needs to position itself for business attainment and future business development.

In light of the county’s current needs when it comes to buildings and grounds and other revenue demanding activities taking place in the county, he feels the board should consider return on investment.

The county’s census is down and there are many projects people want to accomplish. Some businesses might not even entertain coming into Logan County without broadband.

Because this project could provide a major return on investment, Blankenship would encourage the board to proceed with the project. It could position the county for sustainment and development down the road.

Otherwise, Blankenship feels like the county would just be spinning its wheels and still in decline. It does not matter what buildings are fixed up or what raises or bonuses the county gives. Blankenship said those things will not sustain businesses or bring in new ones. In the years to come, Blankenship thinks the Return of Investment (ROI) on this project could be substantial.

Developing a communications platform that looks out to the future is something Bergeron said his company does. With so many having to work from home these past two years, it can be an economic challenge.

As WANRack assists communities in developing their networks, it can help people communicate more broadly across the country and the world. Bergeron said that could result in bigger businesses and more revenue. When technology is available, businesses may be more likely to come to communities with the technology than communities without it. Bergeron said it could definitely help the economic development of the county.

Being located close to Decatur, Peoria, Bloomington and Springfield, Blankenship said this area is an ideal location. Logistically, the county is a perfect place for a large business to put in something like a warehouse that employs numerous people.
 

From a business perspective, Leesman said work from home is a permanent thing and not a fad. He thinks working from home will remain prevalent. Working from home is something some are directly seeking.

Leesman feels broadband capability would help make the county an attractive place. He hopes by some point the county can have a lot of development and competition to make for a price competitive market.

Some states have a dig once policy where they are putting in conduits for future growth to be used later. If the county runs fiber, Leesman asked about running the conduit twice as big as expected to leave room for later development. That way they would not have to do the boring again.

Though WANRack usually just builds one network, Bergeron said they could put in space for additional fiber. Later, more fiber could be pulled in because there is so much activity on the network. What Bergeron said they normally want to do is build once with the open access network and then invite everyone in to use it.

Blankenship asked if the company uses local and regional service providers as much as possible to do the install. If Blankenship votes yes on it, he would want to see the company using people from our county to do the work. He thinks that would boost the local economy further.

When talking to municipalities, Bergeron said they ask if the municipalities have two or three providers they would like his company to talk to. His company tries to work with local providers.

Hepler aked how the company works with school districts. He wanted to know the impact on the rural schools.

School districts can ask for funds to be connected to the network. The company would then make a proposal to the school district. Because there would already be a network in place, the costs for the school district to connect would be significantly lower.

In the rural areas, Bergeron said the government would likely pay for 70 to 90% for the schools to be connected to the network. The schools would pay a relatively low fee per month to be connected to the fiber and would have good network connections.
 

During the pandemic, Blankenship said many Fortune 500 companies and even smaller businesses have found out having people work from home is more cost effective. With more working from home and telecommuting, Blankenship said broadband could be advantageous.

More people are moving out of bigger cities because they are getting tired of the crime rate. If the county poises itself correctly, Blankenship thinks it could attract more professionals to the community.

As many have worked from home these past couple of years, Bergeron agreed that companies are finding it can be a more economical way to do business.

If the board votes to set some ARPA money aside for broadband, Board Chairman Emily Davenport asked if they could immediately apply for grants.

The company can help the county start applying for grants now. Once the county commits ARPA funds and has an agreement, Bergeron said the county could immediately start applying for matching funds. The company will help the county work on applications with the state and NTIA.

If the board commits $2M in ARPA funding and then the state matches those funds, the county would then have $4M for the project. Davenport wanted to know how much the county could get with their $2M commitment and how far it would go in reaching different areas of the county.

To develop the network, Bergeron said costs would be in the $12M to $15M range. It may mean spending $10M in the first phase and $5M in the second phase to get the networks the county wants.

With an estimated $100,000 per mile and between 50 to 70 miles being covered, Hepler said he estimated costs around $8M. He wanted to reconcile those figures with the $12M to $15M Bergeron estimated.

For the $12M to $15M figure, Bergeron said that would be three phases down the line. It would be about $6M to $7M or up to 70 miles for getting the fiber in. Then they would start connecting the network to the town halls around the area. The network would soon start spreading out to other places.

For phase one or two, Bergeron said it might be $7M or $8M. The next phase would probably be another $4M or $5M. Bergeron said it is hard to put a specific number on a project.
 

Over the next few days, Bergeron will work on a list of addresses with Leesman. The addresses will be on a map to help them see what the costs would be. Bergeron said they could then scale back or scale up.

Once phase one and two are complete, Hepler asked if the county would be a better candidate for third party funding for phase three.

The ARPA money is a little less than $5.5 M and there are many areas that need to be addressed. Davenport wants to be as fair as possible and knows broadband is important. However, Davenport said she cannot in good faith vote to put all the money in one basket for broadband.

If the county is not going to get much bang for the buck from $2M or $3M, Davenport wonders how they would be able to finish the project. The county does not have extra funds to put millions aside in the budget to complete the project.

While Bergeron understood Davenport’s concern, he said she needed to look three or four years out with the phasing of the funding. Over the course of the next five years, there could be several phases of the project coming through ARPA funds and other grants.

If the county would use $3.5M from ARPA funds and $3.5M from the state, Bergeron said it would give them a good start. The county could then go to NTIA to tell them they want to get to phase two and ask NTIA for $3.5M more in funding. They could go back to NTIA six months later and ask for $10M to build up the next phase.

Across the country, there is funding to support these phases. Bergeron said there are about $25 billion available for projects. Since Bergeron has an idea on the direction the county wants to go, he can put together numbers to get a good handle on what the county is asking and what their ARPA commitment may be.

As the discussion neared an end, Hepler asked Leesman to suggest the next steps.

To get interest and support, Leesman is trying to go to every village and town in the county. He would like to make the project inclusive by all areas having a say.

Leesman said having something like this project to get funds could help the county get grant opportunities.
 

With the money put towards the project, Leesman said the county needs to be impactful. He knows there are other areas to address and wants everyone to get a fair review before a decision. Leesman feels broadband could help increase the county population.

To Davenport, educating people about the need for broadband is key. Some may feel it is not needed if they already have internet access.

If some areas are not interested in connecting to the network, Leesman said the plan could be modified.

Though WANRack is just one of many companies, Leesman likes their revenue sharing plan. Leesman considers many other companies who have reached out to him a monopoly. The companies want the ARPA money to implement their own personal network for their own personal gain. He feels the county would have limited growth with that type of model.

Hepler would like to see something that extends to the underserved rural areas. He thinks that is our best opportunity for growth and development.

In the next few months, the board will consider whether to use ARPA funds for this project.

[Angela Reiners]