Group seeks November referendum on locally operated utility.
Mayors support effort.

By HEATH HIXSON
Kane County Chronicle
March 28, 2004
(PDF Version available here)

Proponents of a Tri-Cities' broadband initiative to offer television, Internet and telephone service will seek another referendum one year after voters rejected the idea.

The proposal is likely to face stiff opposition from SBC and Comcast, which, spent tens of thousands of dollars last spring to short circuit a similar plan.

"Were doing this because every resident and business has been victimized by two arrogant businesses," said Annie Collins, chairman of Fiber For Our Future, which is organizing the petition drive. “They have used their money and marketing machines to lie to residents and mislead the voters of the Tri-Cities."

Fiber For Our Future activists allege that SBC and Comcast smothered the Tri-Cities with false advertising and drummed up baseless fears of tax increases and service cuts to beat back the April 2003 referendum effort. Nearly 60 percent of voters came out against the proposal.

Had it been approved, the Tri-Cities would have sold nearly $60 million in tax backed bonds to fund the fiber-based system for telecommunication services in Batavia , Geneva and St. Charles .

Increasing prices and a desire for better service and faster technology are prompting the activists to again try to sway voters in the Nov. 2 general election.

Collins said the proposed ballot questions would be similar to the 2003 plan. The propositions would call for the creation of a Tri-Cities telecommunications system that would sell cable television, Internet and telephone services.

The utility would be funded through general-obligation bonds backed by expected tax revenue of the three cities. Collins said subscribers would pay off the bonds through the service fees charged by the utility. If the utility did not attract enough subscribers to financially succeed, taxpayers would be left with the bill and stuck with paying the bonds.

Opponents say the risk is not worth using local resources for a plan they called speculative, especially when private companies already provide, such services.

We just hope that the consumers understand what the potential repercussions of that referendum would be," SBC spokeswoman Andrea Brands said. "We wanted to make sure residents are fully educated about what is involved when you build a local telephone company or broadband company. There are lots of risks involved in any type of business."

Brands declined to say whether SBC would oppose another referendum. However, SBC has stepped up its service to the area within the last year. Brands said nearly 100 percent of Geneva residents have access to high-speed Internet service through the company's DSL system.

Comcast also has increased its services to residents in the area since last year's vote, spokeswoman Patricia Andrews-Keenan said. She questioned whether creating such a utility is the best use of local funds.

"Is there really a need to duplicate those types of things?" Andrews-Keenan said. "Is that the best use of the municipality? Shouldn't they be providing service for the elderly or education?"

In Illinois , education is not typically funded by municipal government but rather by school districts and the state and federal government. School districts are separate entities that levy property taxes.

Jim Baller of The Baller-Herbst Law Group, a national telecommunications law firm, said many cities are jumping into the telecommunications industry as an extension of their electric utility service. Batavia , Geneva and St. Charles each operate their own electric utility.

"The trend is out there," Baller said. "There are a lot of reasons for the interest. Many of the communities that are interested have the same goals as the people in the Tri-Cities when they moved forward with their project."

Among those goals are using better technology to attract more business, expanding local utility infrastructure and giving disgruntled residents a new choice in service providers, said John Kelly, director of economics and research at the American Public Power Association.

An APPA survey of its municipal members late last year showed that at least 156 municipalities lease fiber lines, 134 provide cable service and 128 provide some level of broadband service.

Geneva Mayor Kevin Bums said that while he supports the effort by Fiber For Our Future, the city council would have to see support by residents.

“I still support municipal broadband," Burns said. "This community needs to see a grass-roots effort and a groundswell of support to make this worth pursuing."

St. Charles Mayor Sue Klinkhamer said she supports the effort because of rising cable fees and poor service for residents, which has contributed to a spike in complaints to the city. She said the city could provide a quality service because of its experience as an electricity provider.

Batavia Mayor Jeff Schielke said he supports municipal broadband, but he questions the timing of the petition given the combination of a lagging economy, higher gas prices and the areas political atmosphere.

"Politics, so much of it is timing. I am not sure that this is the place or the time to be doing this," Schielke said.

Reprinted by permission Kane County Chronicle © 2004