Telecom Referendum "Loss" Turns Into a Win with Lower Prices and Faster Broadband

       City manager says “marketplace has responded” and voices concerns about Ramsey County fiber proposal--

In 2009,North Saint Paulcity administrator Wally Wysopal was the loudest cheerleader for a proposed $18.5 million taxpayer-backed telecom network dubbed PolarNet.

“It provides economic development opportunities like we don’t have today and that’s what we want to do is distinguish North Saint Paul from any other community in the metro area,” Wysopal said at the time.

Even after North Saint Paul voters overwhelmingly rejected the controversial fiber-optic network, Wysopal thought it might be viable with some fine tuning. "We need to find out what went wrong and what's salvageable," Wysopal told the Ramsey County-Maplewood Review.

Three years later, Wysopal remains a vocal advocate—not for PolarNet, but for the private telecom providers who opposed the city’s proposal. Since the defeat of the referendum, private cable providers have made major investments into upgrading their existingfiber opticinfrastructure and services in the Twin Cities suburb.

“I don’t know if we dodged a bullet, but I think we’re in a more stable position because we’re not trying to provide a service that the private marketplace has responded to and provided at higher speeds and lower prices,” Wysopal recently told FFM.

Wysopal still contends the city of 12,000 had a sound business plan to operate PolarNet. He also wonders whether the option of PolarNet coming on line might have been a factor in motivating private providers already operating in North Saint Paul to upgrade their systems. Regardless, city hall’s top official has been pleasantly surprised by the increase in speeds and improved coverage following his pet project’s lopsided loss in the February, 2009 special election.

“If it was related or not, it so happens after that project Qwest was in here installing fiber to the node and Comcast came in with a lot more products and offerings and some businesses picked up other service,” Wysopal said. “I think the whole community has benefited with more services and lower costs.”

Although private providers generally do not disclose the cost or technical specifications of their investments for competitive reasons, Wysopal has closely tracked their efforts. It’s given him a newfound appreciation of the enormous expense of competing in a high tech enterprise and the commensurate risk to taxpayers when government gets involved.

“The competition that’s out there and how much effort the private sector has to make in capital and technical upgrades all the time, I look at that and I’m very impressed with their work,” he said. “It’s impressive that kind of investment in infrastructure goes on.”

At the same time, the North Saint Paul official has taken note of mounting problems at municipal networks like FiberNet Monticello, a system that has suffered heavy financial losses and suspended bond payments this summer. Yet he wonders if other local governments are paying close attention. “It’s a little curious to me that some places haven’t learned,” he said.

Wysopal also has questions about the proposed taxpayer-backed fiber network under consideration in Ramsey County. The Ramsey County Institutional Fiber Network CIP Project appears to call for one part of the fiber network to be run by and for Ramsey County and the city of St. Paul. A second part of the county’s fiber network would be available for lease “to any private company and/or not-for-profit”, according to the project description. While Wysopal is waiting to see more details, he has raised concerns with Ramsey County officials about their model, based on his experience in North Saint Paul.

“I don’t’ know a lot about the details of the plan other than it’s a public and private fiber optic conduit and they try and sell that off and use the revenue to pay for the construction of the two,” Wysopal said. “I question that approach because the incumbents, the private providers, don’t want to ride on someone else’s fiber.”

Ironically, Wysopal relies more on his 4G phone for connectivity rather than the internet service in his own Fridley neighborhood.In fact, he cites the explosive growth of cellular internet service as one more factor that few outside the industry saw coming.It’s another reason why “losing” the referendum on PolarNet might well be considered a victory in hindsight, even by one of its most ardent supporters.

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                                        Tips or comments? ContactTom Stewardat 612-354-2192.

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