VINTON | Frustrated with current options for high-speed internet, Vinton and its roughly 5,100 residents decided to do it themselves.
Tom Richtsmeier, general manager of Vinton Municipal Electric Utility, said the Benton County community hopes to break ground this year on a municipal communications utility — which proposes fiber-to-the-home service.
The effort began years ago, he said, as concerns mounted over unacceptable service from the private sector.
“That’s where a municipal comes ... they’re there to provide the service that someone else won’t do,” Richtsmeier said. “We’ve already had businesses tell us they won’t come to Vinton without fiber, so we know we need to do it for our future.”
However, officials with New York-based Mediacom — the largest internet service company in the state and one of Vinton’s incumbent providers — not only question the potential success of the community’s proposed service, but officials also say they’ve been investing in high-speed internet in the area for years.
Bill Menner, with the consulting firm Bill Menner Group, which focuses on community development and rural partnerships, said the situation in Vinton is far from unique.
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“Vinton is absolutely not alone in their decision to do it themselves. A growing number of smaller communities are frustrated with their primary providers,” Menner said.
Creating municipal internet
Richtsmeier said a city-operated internet service has been in the works for years and, in 2015, residents voted to create a communication utility.
The project has been estimated at $8.9 million, and finances still are being discussed. But Richtsmeier said it’s possible the city’s electric utility would put up a bond for the project.
While the city would install and own the fiber, Cedar Rapids-based ImOn Communications has been in talks to operate the system for a period of time, said David Fyffe, ImOn’s director for network systems and construction.
“I think there is pent-up demand, at this point, in what Vinton is looking to do, kind of a new model,” Fyffe said.
In 2017, FARR Technologies, a consulting company focused on the infrastructure, regulations and finances of communications networks, completed a fiber-to-the-premise feasibility study for Vinton Municipal Electric Utility.
According to the report, a Vinton high-speed data service is projected to have a take rate of 40 percent in the first year, which would grow to 62 percent in the fifth year. A take rate is the percentage of potential customers — used to measure success.
The report notes that the project could have a positive net income in the fifth year.
“We’re shooting for trying to get 60 percent of the town involved,” he said.
Mediacom officials, however, argue that such an expectation is unrealistic — especially with existing providers in the community, including Mediacom.
Tom Larsen, Mediacom’s senior vice president for government and public relations, said Mediacom, the largest provider in Iowa, has an internet take rate in the mid- to high-40s.
“The consultant has way oversold what’s achievable,” Larsen said. “A 62 percent take rate, that’s like the consultant saying let’s go run a two-minute-mile marathon. It cannot happen.”
What’s more, Larsen said Mediacom has been investing in its Iowa network — including in Vinton — where he said speeds up to 1 gigabit have been available since early 2017.
“They’re building this $8.9 million project on the basis that we can’t keep up with them. It’s just completely untrue,” he said.
“In order for this thing to even break even, a bunch of private businesses need to fail.”
Larsen added that Mediacom aims to begin testing next year on a 10 gigabit service.
He also noted that Mediacom’s service offers more redundancy than most systems, which creates more reliability.
New kind of internet
Outside of Vinton, some industry officials expect to see other communities begin to weigh their options when it comes to municipal internet.
Curtis Dean, co-founder of Community Broadband Action Network, based in Indianola, Iowa, and which aims to help communities through that transition, said most Iowans have access to a high-speed internet provider, but they may only have one or two options.
“You have a very diverse situation in Iowa, where some people are very well taken care of ... and other Iowans are stuck with two large companies, neither of which can offer the kind of reliability that people need in this day and age,” Dean said.
“In the case of Vinton, they’re in the latter stage.”
In addition to Vinton, ImOn last year announced plans to expand residential broadband into Iowa City and Coralville later this year.
Fyffe said discussions are underway on possibly expanding the service outward into more communities.
Folience, The Gazette’s parent company, is an investor in ImOn.
Menner, a former state director of USDA Rural Development, said cities that create municipal internet manage it as they would another utility.
“If you just treat fiber like you treat streets or water — as a necessary public utility or an element of infrastructure, which is how it should be seen — these cities, what they’re doing makes absolute sense,” Menner said.
High-speed internet access ultimately provides many benefits to a community, Menner said.
“Whether it’s education, it’s health care, it’s an entrepreneurial community or it’s attracting new residents who have expectations, those are all elements that come into play, and rural communities especially have to be cognizant of that because they’re already operating from a position of a disadvantage because they have fewer people and a smaller tax base,” Menner said.