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Broadband service hasn't worked out as planned


January 14, 2009
With Georgetown looking to have a private firm manage its Broadband utility in the near future, it's important to know the reasons why the town is having difficulties with the system as well as where the idea for a municipal Broadband system came about.

In October 2005, the former town council — Gary Smith, Dean Hammersmith, Chris Carter, Jeff McCaffrey and Jay Davis and town manager Ken Griffin — was given a presentation by Cris Fulford, Indiana's director of High Speed Communication at the time. Fulford told the town that Indiana's government was looking for towns and counties to start providing high-speed Internet access as soon as possible as a way to help attract and retain businesses and stimulate economic development. Griffin told the council at the time the utility would need 300 customers during its first year to sustain itself.

The following month Griffin and the council visited Scottsburg to examine how its Broadband service worked and how it was able to expand its coverage into five counties. After the trip, the town decided to conduct a survey of Georgetown residents to see who would want a municipal Broadband service. Griffin would be conducting the survey and was shooting for response from about 150 people from different parts of Georgetown.

Griffin later said at a December meeting that the town would need to install a large antenna and rent lines from Verizon at a cost of about $1,000 a month. The projected 300 subscribers needed would pay a $50 installation fee and then $35 a month for access.

By March 2006, the survey of the town was completed and Griffin informed the council that 70 percent of the population would sign up for a town Broadband service. In order to cover the start-up costs, the town would need to secure a $300,000 loan.

In December 2006, the town council signed a contract with Discernity, a company out of Louisville, to build towers, set up the system and teach town officials how to run the system. The deal looked good, but the town soon ran into problems with Discernity.

The company promised to have the Broadband up and fully functional within 45 days of the contract signing; that 45 days turned into three months. The company didn't have a subcontractor install the system until March 2007. Again, problems arose when the subcontractor only built four of the five towers agreed upon in the contract with Discernity and only left two helpers behind instead of five before packing up and leaving.

The town accounted for the understaffed help by hiring local computer expert John Gerry, who taught himself the system. By the end of April, the first accounts were online.

By July 2007, the number of accounts was at 40. Griffin said at the time that if the town reached 200 customers in two years then, by the 39th month of operation, the town will break even and begin to see a profit.

As if problems with the contractual obligations weren't enough of a hassle, the towers themselves also proved finicky. The central 5.7 GHz transmitter that runs the system from the new police station in town communicates with all of the towers around town by direct line of sight. The system is so sensitive that even leaves on trees can prevent communication. Such was the case. The towers were installed when there were no leaves on the trees and, when spring finally came, the leaves blocked the signal.

To solve the problem, the town built a 150-foot tower on an unoccupied piece of land owned by Ashley Mariah Park. This tower acted as a second main tower that could communicate with all the others in town. Construction on that tower was completed in June 2007.

Fast forward to 2008 with a brand-new town council and a vacant town manager position. The new council paid off the $200,000 Broadband loan early in the year because it no longer saw the utility as viable. The two-year mark is coming up in April and the town still only has 60 accounts, far from the 200 accounts that the town needed to break even.

By the end of 2008, the Broadband account was hemorrhaging money. It began the year with $60,000 and was down to $6,000 by December. This is because the town does not have enough customers on the system to cover the operating costs and maintenance. On top of that, the Broadband account owed the water account $75,000 in funds that were transferred earlier to keep it afloat.

It was at this time that the current council began to contemplate selling the system altogether. Eventually, the council decided to hire an outside firm from French Lick, Helix Technologies, to come in and manage the service. The town now hopes that Helix will draw more customers into the system through proper marketing and incentives. The town will oversee and have the final say on all new purchases and will most likely collect an administration fee as Helix will be receiving most of the money from the accounts.

This year will be the test to see if a Georgetown Broadband system is sustainable. If this temporary contract with Helix doesn't work, it's most likely the system will be dismantled after meeting contractual obligations with customers.

(Nick Simpson may be reached at 738-4552 or nsimpson@clarionnews.net.)

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