Superior, Duluth seek route to faster, cheaper internet service

Apr. 18—Duluth Mayor Emily Larson has offered a harsh assessment of the city's dominant broadband service provider: Spectrum Internet.

"Right now, Spectrum is the only broadband provider in Duluth. They know it and your bills show it. Spectrum even raised prices in a pandemic — and this community, held hostage, had no choice but to pay or go without access," she said in her State of the City Address earlier this month.

"This is unacceptable. Personally, I feel it's immoral," Larson said.

Kimberly Noetzel, a spokesperson for Spectrum, responded to Larson's criticisms with a statement defending the company's service.

"The fact is Spectrum Internet is available in the overwhelming majority of the city, at starting speeds of 100 megabits per second with nationally consistent pricing and no data caps, modem fees or contracts," she wrote.

As for accessibility, Noetzel noted: "We offer a low-cost broadband service to eligible families and seniors for just $17.99/month — and it has been available in Duluth for four years. And we responded to the pandemic by connecting 450,000 students, teachers and their families — who did not have broadband service — for 60 days, free of charge; protecting 700,000 customers from disconnection due to COVID-19 economic hardship; and forgiving $85 million in customers' overdue balances."

But Larson remains unimpressed and has proposed the city spend $1 million in federal COVID-19 relief funds "to incentivize new service providers to enter the market" and compete with Spectrum.

Connect Superior

Meanwhile, across the river in Superior, aggressive efforts to boost Spectrum's competition in the Twin Ports are taking even clearer shape. At a Thursday night listening session, representatives of EntryPoint Networks laid out plans to potentially build out an open-access fiber optic network in Superior at an estimated cost of about $31 million.

The Salt Lake City, Utah-based firm has been working with the city of Superior for a couple years now, and EntryPoint President Jeff Christensen explained how the proposed fiber system, called Connect Superior, would work.

He likened an open-access network to a shared road system "where you've got one highway, and then you allow all traffic to go across that highway."

"It's a robust digital road, and it's open to, in this case, any ISP (internet service provider) that will follow the rules," Christensen said.

For its part, the city would require users of this fiber network to pay a toll or fee that would be used to help pay off the cost of building and maintaining the system.

Christensen said the fiber network would offer customers speeds of 1 gigabit per second for both downloads and uploads, likely at a monthly cost of about $50, give or take 10%. He said the network would need a minimum of about 3,000 subscribers to be sustainable and is likely to easily exceed that threshold.

Superior's neighbor to the west is watching closely, although Noah Schuchman, Duluth's chief administrative officer, conceded: "We're not as far along."

"We're still looking at all the options available," including the idea of a city-owned fiber infrastructure, Schuchman said.

Needed intervention?

Annette Meeks, founder and CEO of the Freedom Foundation of Minnesota, advises Duluth and Superior officials to proceed with caution, however.

For starters, she questions the assertion that the Twin Ports lack adequate broadband competition.

"Duluth is not held hostage to one provider. You have multiple providers. You have, as I'm told, excellent satellite service. I haven't been to Duluth since the pandemic, but I haven't had any problems in Duluth," she said.

But Jodi Slick, founder and CEO of Ecolibrium3, said there are places in Lincoln Park that still lack access to decent service, due to topographical challenges and inadequate coverage. She said Federal Communication Commission maps showing coverage in Duluth are misleading, because they are broken down by U.S. Census tracts, and indicate service in an area, even if it's unavailable to all properties.

Schuchman concurred, saying: "I do think one of the challenges we have is that there are areas of the city that do not have broadband, and so, while the city in general does, and we are considered 'served' at that point, we also have some gaps. So, it's really important to the city and the community to close those gaps and make sure that we have equitable distribution of that access and that it is consistent and high-quality."

Tyler Cooper, editor-in-chief of BroadbandNow, said the situation in the Twin Ports is "unfortunately, a story shared among cities and towns across the U.S."

"Often, a given provider will own the phone lines, while another will own the cable lines. This creates a de facto duopoly which is one of the central barriers to broadband expansion across the country," he said

As for the proposal in Superior, Cooper said; "Municipal broadband as a concept is one of the most effective methods for combatting this stagnation, because in places where there is a public option, prices tend to be lower and speeds tend to be higher. When a city installs a public fiber network, for instance, the private sector is highly incentivized to upgrade existing legacy connections like DSL (digital subscriber lines), which no longer serve residents adequately in 2021."

While there may be multiple smaller service providers out there, Chris Mitchell, director of a community broadband networks initiative at the Institute for Local Self Reliance, said: "There is no meaningful competition in the market, and that's very clear, based on everyone's lived experience of trying to take service from different providers."

"When people are moving, they'll often ask on Nextdoor what service to get. And you can just look at those conversations to see what's really available. It's generally just the cable and telephone company, and then there are some also-rans which often use the telephone company's infrastructure, or they use some kind of wireless approach. But it's usually not competitive with the high speeds families need and want," Mitchell said.

Government role?

Meeks suggested city funds could be put to better use covering core functions, such as city streets and public safety. She noted that Duluth recently increased its sales tax to help pay for street improvements.

"When you have to raise taxes to take care of one of those core functions, the last thing you should be doing is thinking about spending millions of dollars on something that is not a core function and that private industry is already providing," she said.

But Schuchman said that while the growing importance of internet service has been evident for some time, "The past year has really illuminated just how important it is to have good reliable access for everybody in Duluth."

Meeks suggested the Twin Ports would be wise to learn from previous failed efforts to launch government-owned broadband service, such as the fiber network built in Lake County and then sold off in 2018 at a loss of more than $40 million.

"It's like Whack-A-Mole. These bad ideas just keep reappearing," she said.

"It's really more like 'The Music Man,' " Meeks said. "These consultants appear in town, make overly rosy projections on not only the need or the desire, if you will, for municipal-owned broadband, but then they also greatly exaggerate the number of subscribers that you're likely to get if you build it," Meeks said.

SEE ALSO:Lake Connections receives 4 bids

Zito Media takes over Lake Connections

But Mitchell said the failure of the Lake County network is far from emblematic. "There's a different dynamic for a discrete city like Superior and an entire very rural county."

"The important thing is that the city take it seriously, do their due diligence and develop a plan that they are comfortable with," he said.

Mitchell pointed to the very successful system that EntryPoint launched in Ammon, Idaho, and said, "That is a model that is so different from what Lake County did that it's hard to even talk about the similarities."

Schuchman said Duluth intends to proceed thoughtfully and would not commit to any sort of a timeline yet.

"I would rather that we were right than fast," he said.

Nevertheless, Schuchman considers the efforts now underway in Superior instructive and useful.

"It can only be helpful to see a neighboring community going through similar explorations. And it's certainly a helpful case study we really have a close eye on and that we will have access to," he said.