News Story

Traverse City Government Still Thinking About Internet Project

Says government utility criticized for 'not jumping in with both feet'

Jan Geht is the chairman of the board for the utility Traverse City Light & Power. This is his response to a Michigan Capitol Confidential article that ran June 19 on the utility’s plan to build out a fiber optic network to every home and business in the city.

I am speaking for myself and not for the board:

I read with great interest your story on our utility's potential plans to provide fiber to the premises. While I agree with much of the criticism articulated in the article regarding the wisdom of municipal entities providing such service, I am afraid that a casual reader may have been left with an incorrect impression of where TCL&P actually stands with respect to this project. So I wanted to clarify any misconception that may have occurred unintentionally.

We did commission the report that you refer to you in your article. When we received the report, I was openly critical of the study that would, among other things, assume the most critical element in the analysis (i.e., the “take” rate or the rate at which consumers will switch from Charter to us). Other board members echoed those concerns and voiced their own concerns. That is why we, as a Board, ultimately rejected, at this point, the invitation to have TCL&P build the network and also serve as an Internet Service Provider (“ISP”). Instead, we decided to pursue a Request for Proposal (“RFP”) for a build-out of the network (to confirm the accuracy of the $10 million estimate predicted by the study) and an RFP for a private entity/entities to act as an independent ISP (to confirm the accuracy of the two-year payback predicted by the study). We have been given reasons to explore in greater detail the financial feasibility of such a project and have decided to explore our options in the most economical way possible. Whether the market will support the estimates provided in the study is yet to be determined.

We were criticized by some in the community for being unduly conservative and not jumping in with both feet. There are certainly voices in the community (and on the Board) who would disagree with the Board's decision for a variety of reasons, philosophical and practical. At present, however, the Board has made no decision to actually provide fiber to the premises either by itself or through a public-private partnership.

Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.