Minnesota scraps multicity muni fiber plans

After years of study, prospects for a multicity municipal fiber-to-the-premises (FTTP) project in northeastern Minnesota were dashed this month as a key city rejected the plan, and the consortium of cities investigating the idea disbanded.

The city council of Hibbing, Minn., voted unanimously against participation in a proposed pact among 11 neighboring cities to jointly build fiber networks to its homes and businesses. More specifically, the council voted against spending $15,000 (which each town was being asked to contribute) to further develop the plan’s model. Though three cities had voted against the proposal and three voted for it, Hibbing’s rejection of the plan doomed the consortium because, as the group’s most populous city (with 17,000 residents as of 2000), it helped justify the plan’s overall economics.

“The current business model isn’t viable without Hibbing,” said Gary Fields, a consultant on the project formerly affiliated with the Blandin Foundation, a Minnesota economic development nonprofit. “They were 40% of the population base of the project footprint.”

Small towns in the so-called “Iron Range” (named after the once-thriving mining industry there) have been investigating multicity municipal FTTP since at least 2006, when Dynamic City (now Packetfront), the consultancy that helped formed Utah’s multicity muni fiber project, UTOPIA, drafted a feasibility study for applying the Utopian model to the much smaller group of folks in the Iron Range.

But UTOPIA has since encountered some stumbling blocks, requiring additional funds from its member cities in the wake of subscriber and revenue shortfalls. Its travails, and those of another wholesale muni fiber network, iProvo (which was recently acquired by Broadweave Networks), have led many industry experts to conclude that wholesale-only FTTP (the only model available to Utah towns, under state law) is a highly challenging model for municipalities to make work.

Thus the model for the Iron Range proposal shifted over time, and its proponents turned to Burlington, Vermont, and its hybrid wholesale/retail model, as the one to emulate. Burlington provides retail telecom services to its residents over fiber but also wholesales that fiber to competing service providers. Earlier this year, Burlington Telecom’s former general manager, Dr. Timothy Nulty, flew in to consult with the Iron Range group.