Egremont — So many choices and so little time. That’s the conundrum Egremonters face as they weighed the merits of three companies proposing to bring broadband to the Internet-starved town of 1,200 people at an informational forum Saturday morning. And now it looks as if two of those companies will not receive state funding anytime soon.
Fiber Connect and Matrix have indicated they will wire the town no matter what the Board of Selectmen and the town’s Technology Committee recommend. Both of those companies promise far higher speeds than Charter-Spectrum, the cable behemoth that last year acquired what was left of the old Time Warner franchises. Still, it remains to be seen whether they will ever be eligible for state funding, either for Egremont or for other projects in Massachusetts.
Of the three, only Charter has received approval from the Massachusetts Broadband Institute (MBI) to qualify for a piece of MBI’s $20 million in “last-mile” funding to provide broadband, phone and cable television to six rural towns in the state, including Egremont.
The state funds are needed, Charter says, because the towns are sparsely populated and they would be prohibitively expensive to wire and therefore not in keeping with Charter’s business model.
“If we couple private capital with the state’s, it makes the math work,” said Charter representative Mike Chowaniec. “The dollars we are getting only subsidize the initial build out.”
Documents since obtained by The Edge indicate the state thinks Matrix or Fiber Connect aren’t stable enough to receive state funding. In a March 30 rejection letter to Fiber Connect, MBI Deputy Director Edmund Donnelly cited “a lack of solid financial foundation for your company” as a reason for not awarding an MBI grant.
Fiber Connect’s Managing Director Adam Chait told The Edge he’s going to continue to build out his networks in Monterey and Egremont without MBI funding.
“Obviously, it’s disappointing and I certainly don’t agree,” Chait said of the letter. “I do understand the MBI’s position. We have no strong financial history yet.” Chait added that, “We did make some offers to ease their concerns,” but it was not enough.
Matrix has come under even sharper criticism from the MBI. In a May 4, 2016, report assessing separate Matrix and Comcast grant proposals for the towns of Montague and Hardwick, the MBI heaped praise on cable giant Comcast’s proposal, while casting doubt on Matrix’s finances.
MBI said it had obtained a report a year ago from Dun & Bradstreet, a business services company that provides information on companies, that characterizes Matrix’s parent company, Millennium, as having a “high risk of severe payment delinquency” and a “high risk of severe financial distress.”
In an interview, Matrix Director of Business Development Chris Lynch, who also represented the company at Saturday’s meeting in Egremont, said the D&B report was a “screen grab” provided to MBI by a Matrix competitor, Tilson, that had also helped prepare the same MBI report.
Millennium CEO Ronald M. Cassell fired back a letter to the MBI questioning the source of the D&B report, its accuracy and also the MBI’s interpretation of a troubled Matrix project in the town of Leverett in 2014-15 that ultimately went to arbitration in order to resolve the town’s complaints against the company.
Lynch said MBI has consistently favored Comcast and Charter over smaller but qualified companies such as Matrix-Millennium.
“If you looked up ‘corporate welfare,’ this would be a great example,” Lynch told The Edge.
MBI spokesman Brian Noyes disagreed. He told The Edge all proposals are considered strictly on their merits under the broadband extensions program grant. He pointed to a June 20, 2016, letter to MBI from Karen Charles Peterson, commissioner of the state Department of Telecommunications and Cable, that ultimately sided with MBI in its decision to go with Comcast for the towns of Montague and Hardwick.
The commissioner’s letter cited “Comcast’s superior financial capacity and technical capabilities and experience,” adding that, “the record demonstrates that MBI and the citizens of the Commonwealth whose money is at risk in this grant program cannot be sufficiently certain of the sustained success of Matrix’s proposed network.”
Meanwhile at the Saturday morning forum at the First Congregational Church, town residents peppered representatives from the three companies with questions, so many in fact that at end of the two-hour session, residents continued to query the representatives individually.
There were questions about speeds, product offerings, reliability and the ability of the companies to respond in the event of an interruption in service or a natural disaster that knocks out service to the entire town.
As was the case at an informational meeting last month, most of the questions were directed at Charter and had to do with its hybrid coaxial cable-fiber network, as opposed to Matrix and Fiber Connect, both of which bring high-speed fiber directly into the home and promise down load speeds of a staggering 1 gigabit per second for a fee of $99 per month.
In keeping with its size as the second largest cable provider in the nation (behind Comcast), Charter sent three representatives. Fiber Connect, which is a locally owned start-up, and Matrix both sent one apiece.
To give you an idea of how desperate some Egremonters are for affordable broadband Internet, one town resident, tech entrepreneur and musician Mark Tuomenoksa, told the audience he spends $700 per month on cellular data because it’s the only high-speed alternative he has.
“So this is important to me, obviously,” Tuomenoksa said. Others in the audience of some 100 people nodded in agreement.
Both Fiber Connect and Matrix have said they can get their networks up and running to serve most of the town within a year: Fiber Connect plans 75 percent coverage and Matrix 93 percent. Charter’s build-out, on the other hand, will take several months longer — in part because the company must go through the regulatory process of obtaining a cable television franchise in Egremont.
With funding from MBI, Charter is offering to provide service to 96 percent of Egremont residents at no expense to town taxpayers beyond each resident’s cost for subscription and installation. The cost to supply service to the remaining 4 percent would be paid by the taxpayers of Egremont. The monthly cost to Charter subscribers would depend on which combination of Internet, phone and television services they select.
Maximum consumer Internet speeds would be 60 megabits per second, only a fraction of what Fiber Connect and Matrix would offer, but Charter representative Gregory J. Garabedian explained that there would be no need for over-the-top television services to consume bandwidth because Charter provides standard cable television services. In addition, a 1 gigabit direct fiber connection would be available for business customers, though Garabedian did not know the monthly charge for that service.
Fiber Connect and Matrix would supply broadband Internet alone without television service. Both Chait and Lynch explained that customers with the type of service their companies provide typically obtain television services through satellites or so-called over-the-top streaming platforms such as Roku and Apple TV. Several audience members were confused by the terms and asked for clarification.
Resident Steve Cohen wanted to know if any of the three companies had discounted rates for low-income residents. Chait said Fiber Connect is putting together a package for such customers, while Lynch said Matrix has a $45 per month discounted 50mbs rate if the customer or his/her children can qualify for free or reduced lunch at school.
Charter Director of Government Affairs Anna Lucey said her company offers a 30mbps connection for eligible low-income families and seniors for $14.99 per month.
Charter representatives repeatedly emphasized the company’s size and expertise, pointing to its relationships with electric utilities such as National Grid to deal with natural disasters and responding to emergencies and related outages.
The company is second only to Comcast in its size. In Massachusetts alone, Charter serves almost 300,000 customers in 68 communities and employs more than 1,000 workers.
Charlie Flynn, who chairs both the town Technology Committee and the Board of Selectmen, said the committee is meeting on Thursday (April 6) at 5 p.m. in Town Hall and the selectmen are slated to decide on a plan on Monday, April 10, at their regular meeting. The deadline for the town to respond to Charter’s proposal is April 21.