Costs and Risks of Cambridge's Proposed Municipal Internet System

The City of Cambridge is considering implementing a municipal fiber optic internet system at a cost of $194 million. While everyone in Cambridge should have access to high-speed internet, this proposed plan is not the best solution considering the cost, the fast-paced technological advancements in the digital age, and the availability of other internet service providers in the area. Furthermore, the cost of implementing a municipal fiber optic internet system is exorbitant, and this investment could be better spent on other essential infrastructure or services. 

There are numerous examples of municipalities that have faced significant financial challenges or cost overruns when implementing municipal fiber optic systems, including:

Burlington, Vermont: In 2006, the city of Burlington launched a municipal fiber optic network, Burlington Telecom. However, the project ended up costing the city significantly more than expected, resulting in a financial crisis. The city's credit rating was downgraded, and there were concerns that the city would default on its loans. The situation was eventually resolved with a settlement that required the city to sell Burlington Telecom to a private company.

Leverett, Massachusetts: In 2015, the town of Leverett completed the construction of a municipal fiber optic network, but the project ended up costing the town far more than projected. The initial estimate for the project was $3.6 million, but the final cost ended up being closer to $6 million – an overrun of 67%. To cover the cost overruns, the town had to borrow an additional $2.5 million, resulting in a debt burden that would take years to pay off.

Westminster, Maryland: In 2014, the city of Westminster launched a municipal fiber optic network, but the project ended up costing the city more than expected. The initial estimate for the project was $21 million, but the final cost ended up being closer to $32 million – a 52% cost overrun. To cover the cost overruns, the city had to borrow an additional $11 million, resulting in a debt burden that would take years to pay off.

Ammon, Idaho: In 2017, Ammon Idaho completed the construction of a municipal fiber optic network, but the project ended up costing the city more than expected, resulting in a significant deficit. The initial estimate for the project was around $3.5 million, but the final cost ended up being closer to $6.5 million, an 86% overrun. The city had to borrow an additional $3.3 million to cover the cost overruns, resulting in a debt burden that would take years to pay off.

Wilson, North Carolina: In 2015, the city of Wilson, North Carolina, incurred significant legal costs defending its municipal fiber optic network from legal challenges from private internet service providers. These legal costs ultimately forced the city to raise property taxes to cover the expenses.

These examples demonstrate the significant financial risks associated with implementing a municipal fiber optic system. While having internet services for residents is important, Cambridge must carefully consider the potential risks and long-term financial implications of entering this market with such an enormous investment.

Second, technological advancements are continually evolving, and the technology used for fiber optic internet is likely to become outdated by the time the system is completed. According to a 2020 report by the World Economic Forum, "technological advances are driving changes in the ways we communicate, work, and live, and the pace of change is accelerating." The report further highlights that 85% of the jobs that will exist in 2030 have not yet been invented, indicating the pace of technological change is unprecedented. Therefore, there is a risk that investing a large sum in a fiber optic internet system could quickly become a wasted investment when it is superseded by new technologies. The fast-paced technological advancements in the digital age make it possible for the technology used for fiber optic internet to become outdated by the time the system is completed.

Cambridge residents already have access to various internet service providers, including Comcast, Verizon, T-Mobile, Starry, and Starlink. A 2019 report by the Federal Communications Commission showed that 94.9% of households in Massachusetts have access to broadband internet, and the availability of internet service providers in the area is not limited to Cambridge.  We need to assess how many households in Cambridge lack internet.  If it is close to the statewide average of 5%, we can support these families linking to existing options. There is no pressing need for the city to invest such a substantial sum in a municipal fiber optic internet system when there are already several other internet providers of reliable, high-speed internet.

Another significant issue with the proposed plan is the time it would take to implement it. Installing a municipal fiber optic internet system would require several years. In the meantime, technological advancements and the reliance on digital connectivity will continue to evolve rapidly. The longer the city takes to implement the system, the further behind it will fall in terms of digital connectivity and innovation.

The proposed plan does not consider the ongoing operational and maintenance costs and likely losses associated with the system. Implementing a municipal fiber optic internet system would require substantial ongoing costs to maintain, update, and repair the infrastructure. According to a 2021 report by the Fiber Broadband Association, "deploying fiber networks requires careful planning, design, installation, and operation to provide reliable service." These ongoing costs could put a significant strain on the city's budget and resources, potentially leading to other essential services being underfunded or neglected.

There are better ways to spend $194 million to support people in Cambridge:

·         We could install solar panels on 13,000 residential rooftops, generating a whopping 65 gigawatt-hours of green energy per year.

·         We could buy a fleet of 194 electric buses.

·         We could build 388 completely paid-for apartments.

·         We could keep every food pantry in the city fully stocked for many years to come.

·         Every household that lacks internet and qualifies could immediately be supported to access existing high speed, reliable services.

The availability of other internet service providers in the area and the ongoing operational and maintenance costs associated with the system make the proposed plan of spending $194 million on a municipal fiber optic internet system a questionable and potentially misguided decision for the City of Cambridge. Before proceeding with such a significant investment, the city should consider conducting a comprehensive analysis of the potential costs and benefits and explore other options that may be more cost-effective and better suited to meet the residents’ needs. 

All Cambridge residents need access to reliable broadband internet. However, the City of Cambridge's proposed plan to enter a crowded competitive market to implement a municipally-owned fiber optic internet system option is not the way forward.

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