Willmar forges ahead on municipal broadband

WILLMAR, Minn. - The fate of a $24.5 million broadband project came down to one vote at a City Council meeting here on Monday night.

Seven council members faced a choice: forge ahead with an ambitious plan developed over the last two years to build a city-owned municipal broadband network, or heed a last-minute request from telecommunications giant Charter Communications to pause the project.

In a 4-3 vote, the City Council opted to continue work on the Connect Wilmar Initiative, a project to build an open-access, city-owned fiber optic network.

The project’s supporters said their goal is providing high-speed internet access to every home and business in Willmar, an agricultural city of about 21,000 known for its nearby lakes.

The network’s estimated $24.5 million in construction costs would be paid via bonds. Internet service providers would pay leasing fees to use the city’s network, revenue that Willmar would use to pay back the bonds, according to an explainer for the project.

But just as Connect Willmar seemed poised to break ground later this year, a surprising offer arrived from Charter Communications, which operates under the trade name Spectrum and provides service to a vast majority of the city.

The company offered to build up its fiber-optic network in the city’s industrial park at no cost, but only if the City Council members put the brakes on Connect Willmar, in a letter delivered in February and first reported by the West Central Tribune.

“Spectrum’s offer to Willmar removes the risk of Connect Willmar underestimating consumer demand and costs to construct the network, which will lead to higher property taxes for every resident of the community,” Mike Hogan, a spokesman for the company, said before Monday’s vote.

The offer sparked spirited discussion at Willmar City Council meetings in February and March. A pause would most likely have meant no construction on the project in 2025, with some supporters saying the delay could effectively kill Connect Willmar.

One of the City Council members, Steve Gardner, said before Monday’s vote that he wanted the city to take Charter’s deal. The city should be careful when taking risks with taxpayer dollars, and the cost of Connect Willmar, with interest included, could rise to beyond $30 million, said Gardner, a skeptic of the project even before taking his seat in January.

If Willmar builds the network but no one switches to the internet providers using it, then those companies won’t be interested in continuing to lease from the city, he argued. Then the city would be stuck paying for infrastructure no one uses.

Gardner said he also fears Charter will try to undercut any companies that use Connect Willmar’s network. “They have more money than we do, and they can take more risk than we can,” said Gardner, a vice president for operations at Willmar Electric and a former first sergeant in the National Guard.

Connect Willmar supporters acknowledged the financial risks on Monday.

“I don’t intend or want to indicate that this is going to be a smooth sailing,” said Kyle Box, the city’s operations director.

Box said Willmar learned from the failures of municipal broadband efforts in other cities. Communities such as Lake County have had to sell their broadband operations. But other projects incrementally built up their networks over years, while Willmar plans to invest all at once, Box said, adding that they have several small internet service providers lined up.

Connect Willmar’s fiber network will also be useful for up to 40 years, longer than the coaxial cable infrastructure offered by Charter in February, Box said.

City Council Member Justin Ask said he did not want a pause on Connect Willmar. The project could make revenue for the city if enough of the city switches to companies leasing from Connect Willmar’s network, said Ask, a Lutheran pastor.

“In my mind, I think we’ve brought the risk down to the point where the potential growth for the community exceeds the potential risk,” he said.

Connect Willmar supporters also believe the project will lead to more options for residents, with smaller internet service providers believing they can compete now that they don’t have to build their own network.

At Monday’s meeting, citizens crowded the room, with four people providing comments supporting Connect Willmar and expressing their distrust of Charter. This was in contrast with a previous meeting in February where attendees supported Charter’s offer and criticized Connect Willmar’s price tag.

By the end of the meeting Monday, the City Council voted 4-3 to forge ahead with Connect Willmar, rejecting Charter’s appeal to pause the project.

“The people of Willmar have spoken very loudly, very clearly, they want this to happen,” City Council Member Carl Shuldes said at the meeting.

Shuldes voted to continue with Connect Willmar alongside Vicki Davis, Tom Gilbertson, and Ask.

City Council Members Gardner, Rick Fagerlie, Tom Butterfield voted against. Council member Audrey Nelsen, was absent.

Charter, in a statement on Tuesday, acknowledged the city’s decision and said it remains committed to serving Willmar.

“The City of Willmar’s decision to invest in a government-owned network is both risky and unnecessary, bringing uncertainty and expense that will burden taxpayers for years,” the statement read.

Gardner said that since the project is approved, he will abide by the majority and hope for Connect Willmar’s success.

“I hope it succeeds,” Gardner said. “I have to. My own property taxes are at risk.”