On the November 5 ballot, Holyoke voters will be asked to answer a non-binding public opinion advisory question that reads: “Should the Holyoke Gas and Electric conduct a feasibility study on a gradual rollout of fiber optic internet for residents of the City to purchase, and the findings be presented at a City Council meeting by April 2022 or sooner?” This ballot question was prompted by a recent citizen petition that was submitted to the City Council. In an effort to educate you, our customers, we want to provide background on current status of HG&E's internet business and an update on our evaluation of residential internet services.
In 1998, HG&E constructed a fiber optic network in order to serve its utility needs, as well as to provide high speed internet service to Holyoke's public schools and municipal buildings. As a natural extension of this business model, HG&E began serving commercial customers that were located along the fiber network path. Today, HG&E, through HGE.Net, continues to provide high speed internet services to business customers.
Making a fiber connection from the existing fiber network to a home or business can cost several thousand dollars. This connection is referred to as the “last-mile” and not many residents are willing, or able, to pay these costs. Some larger businesses are able to spread the installation costs over several months and will sign a three year service contract in return. While a major extension of HG&E's fiber network would make last-mile costs more manageable, HG&E would be required to make a significant capital investment to extend the current network.
Locally, there are municipal utilities that are providing fiber service to residential customers; this is referred to as Fiber-to-the-Home (FTTH). These residential services include internet bandwidth and, in some cases, an option for phone service. Cable television (CATV) services are not provided by area municipalities constructing FTTH networks. Similarly, HG&E has no plans of providing CATV services through any potential FTTH offerings. Customers who subscribe to service would “cut the cord” and stream their TV entertainment over the Internet.
HG&E has been evaluating a broader build-out to serve the residential sector, similar to other area municipal projects. Preliminary estimates indicate that a City-wide network build-out could cost upwards of $30 million. Each community can have significantly different factors that impact construction cost, operating expenses, and demand for a municipal internet service; therefore, HG&E is taking a deliberate and thoughtful approach to the FTTH evaluation.
HG&E's mission is to provide competitive rates, reliable service, and excellent customer service to customers. Taking the time to fully understand the impact of a potential FTTH build is critical to meeting our mission to you, our customer. We remain committed to being responsive to our customers and look forward to sharing more about this project with you in the near future.