Frontier Makes Last-Ditch Pitch On ​“CT Gig”

After picking a different company as the leading contender to build a new ultra-fast public broadband Internet network, the Harp administration has agreed to give Frontier Communications another shot at making its case.

Mayor Toni Harp revealed Monday that the city decided to pursue discussions with MacQuarie Capital to build the 1 gigabyte fiber-optic network, which would offer New Haveners Internet speeds of up to 100 times their current service for a fraction of the cost.

MacQuarie was among a number of companies responding a request for proposals the city issued to build the network, dubbed the CT Gig Project, not just for New Haven, but for (at last count) 105 communities across the state. (Read more about that in this Hartford Courant article. Click here to read about a regional ​“Gigabit Summit” Harp convened in City Hall last October with the state official behind the project.)

The idea is to follow the example of communities like Chattanooga, Tennessee, which built 1 gigabyte networks and then saw businesses come to town as a result. (Click here to read about the economic impact in Chattanooga.)

The idea is also to make ultra-fast service available to New Havenvers for, say, downloading movies or doing research, Harp said Monday. New Haven would seek to bridge the ​“digital divide” while also boosting its growing tech sector.

Harp made the comments during her weekly ​“Mayor Monday” appearance on WNHH radio’s ​“Dateline New Haven” program.

“It’s really important,” she said on the program, ​“that we consider [internet service] a public utility.”

MacQuarie would take on all the cost and risk of building the fiber optic network, city Controller Daryl Jones said in a subsequent interview. It would agree to operate and ​“refresh” the system over 30 years and make all repairs; it would not get paid if service fails.

New Haven would pay the company back over time for the $25 million of the cost of building the system in just the city through a monthly fee of, say, $20 tacked onto property taxes for each building in town, Jones said. That $20 would get all occupants access to phone, Internet and TV service; the cost for the full 1‑gigabyte speed service would cost $70 a month.

By contrast, Jones said, people pay as much as $219 a month elsewhere just for the 1 gigabyte Internet service. Just regular phone, or cable, or internet service already costs alone already costs more than that $20, he said. That’s because communications companies can now charge up mark-ups of up to 90 percent for the service. With the city owning the fiber, companies will no longer be able to do that, Jones said. Companies like Frontier and Comcast would still make money as internet service providers, because the city would not go into the ISP business, but they wouldn’t be able to charge the same fees. Given the potential lost revenue, communication companies’ trade-group representatives and unions have opposed the statewide plan, saying the private sector should handle the job instead.

Because New Haven would get revenue from the operation as owner of the fiber, even that $20 fee might end up slashed, according to Jones.

Frontier, which in 2014 bought SNET and moved its state headquarters to New Haven, had also competed for the contract. Jones said that unlike MacQuarie, the company didn’t offer to pay all the up-front cost.

“We went through a selection process. We want to continue discussions with MacQuarie,” Jones said.

Meanwhile, after a meeting between Harp and Frontier officials, Jones’ staff will do ​“due diligence” and take another look at Frontier’s pitch, he said. ​“The mayor’s door is always open for all businesses to come talk to her.”

Asked about the process, Frontier spokeswoman Liz Grey Godbout sent the following response:

“Frontier is a substantial economic contributor to the State of Connecticut with nearly 3,000 employees statewide, and with over 1,000 employees based in New Haven. We are actively engaged in discussions with the City of New Haven and other municipalities regarding the development of a project established through a public-private partnership, to develop ultra-high speed internet applications. We believe that such a collaboration is the best way to ensure Connecticut’s economic and technological future and bridge the digital divide.”

The discussion about the CT Gig project begins at about 16 minutes into the above sound file of Harp’s Monday appearance on WNHH radio.