Holland, Michigan, has become best known for its Dutch heritage, which serves not only as a part of the city's cultural identity but the local economy as well: the Tulip Time Festival in May and various Dutch-themed attractions augment the nearby Lake Michigan shoreline in attracting thousands of tourists annually.
The community is poised to become a new hotbed of fiber-based broadband services.
In July, Holland Board of Public Works (Holland BPW) tapped eX² Technology to design and construct a 195-mile fiber-to-the-premises (FTTP) network infrastructure that will ultimately enable every city of Holland, Michigan, residence access to affordable high-speed internet.
While delivering city-wide FTTP services may be new, the city could be a lot more experienced in deploying fiber infrastructure.
Established as a community-owned utility in 1893, Holland BPW has owned and operated a fiber network in West Michigan for 30 years. Last August, the residents of Holland voted to make a community investment in a high-speed fiber broadband network that will be available to every address in the city. A bond supported by a millage will fund the passing network.
In late 2019, Holland BPW moved the broadband network unit out of IT and into utility services.
Like other traditional electric utilities, Holland BPW installed fiber in the 1990s to connect its power infrastructure and support SCADA applications. “We chose fiber to connect all our electric substations,” said Ted Siler, Utility Services Director at Holland BPW. “Even at that time, there was a thought of offering a TV service, so some fiber overbuilding came out of that process.”
As it overbuilt fiber in the city, Holland BPW started offering a mix of dark fiber and active Ethernet services to local businesses and public agencies. The city has established a reputation already as a business service provider.
Since it’s not an ISP, Holland worked with six other ISPs to connect services to customers. “These are mostly business customers,” Siler said. “This is not a low-cost option.”
A new experience
Over time, there was growing interest from the city council in providing an FTTP service to residential customers. However, since BPW had a near-monopoly status as the primary source of electricity, water and wastewater, entering the competitive broadband market was undoubtedly a significant shift.
“It’s different running a monopoly utility like water or electricity,” Siler said. “There’s no competition in that once we have someone, we have them for the rest of their lives versus a competitive market like telecom and fiber.”
In 2017, Holland BPW began a small deployment of FTTP in the downtown part of the city. Siler said that that area of the town offered potential customer take-up.
“We dipped our toe in 2017,” he said. “We did a shared gigabit offering in the core downtown area because of the density. There are a lot of businesses and apartments above the buildings, so there’s a dense customer base there.”
After dedicating capital for this initial FTTP build, it has 250 customers and hopes to get a 40 percent take rate. Not long after it started offering services, traditional providers began to respond.
“We hit revenue projections and were competitive,” Siler said. “It caused the incumbents to offer some faster speeds because we were there, and that probably wouldn’t have happened if we weren’t there.”
Interconnecting with Holland BPW’s existing 260-mile fiber infrastructure, the new FTTP network will meet current and future broadband demands.
Holland BPW will offer 1 Gbps symmetrical where only 22 percent of Holland previously had access to gigabit download speeds. Additionally, the network will support any variety of industry-standard FTTP last-mile access technologies, including Active Ethernet and PON.
In 2019, Holland’s City Council tasked the city manager and Dave Koster, the BPW general manager, with forming a broadband task force.
The task force comprised council members, city attorneys, and Holland Superintendent, who laid out a plan that would not put the utility at risk.
Initially, only some were on board. “During those early conversations in the fall of 2019, not everyone was convinced we should do this,” Siler said.
But what helped convince others of the plan was the COVID-19 pandemic. The pandemic forced many people to work remotely and school children into a remote learning environment. A reliable broadband connection was critical in conducting remote work and learning.
“When the pandemic hit, we quickly realized that we needed to do this,” Siler said.
An essential utility
Holland city officials talked to groups and did a city-wide survey through the Frost Institute and got 4,000 respondents.
“The majority of folks responded that they think that a high-speed internet offering is important, and we’d be willing to pay for it a community investment, and we think it’s like a utility,” Siler said. “That gave us the indication that it could be successful.”
After it gathered responses, the city created a broadband network that would pass every residence and be paid for by millage. This measure was approved in August 2022 and passed with 53% in favor.
“This gave us an excellent indication that we could fund it without a worry,” Siler said. “With the majority of the cost covered by the millage, we could have as low as a 30% take rate and still be successful and have an affordable high-speed service offering.”
Siler added that while its projection is to get a 50% take rate, “we think we’re going to get higher than that.”
The proposal was to borrow money and pay it back by using the millage, which is a tax. Holland asked for $30 million and paid it over 25 years, but the city thinks it may only have to borrow between $23 to $25 million and 20 years.
This would cost each household $15 a month for the millage. Holland estimates the service will cost between $40 to $50 a month.
Initially, Holland will offer 2.5 Gbps. It is in a 10 Gbps-capable network, so it will have a 10 Gbps offering if someone wants it, like a business or a power user gamer.
“We figure our base offering is probably going to be 2.5 Gbps in that same price range,” Siler said. “We think that’s competitive, and residents’ money is returning to the community, which is a good selling point.”
State of broadband
Before it devised its FTTP plan, Holland’s leading service providers were AT&T and Comcast. While Holland is not an underserved or unserved area, the city’s prior experience made it easier to launch a city-wide service.
Since it started offering service before the passing of the Metro Act in 2002, Holland was better positioned to move forward with a city-wide service plan.
According to the Michigan Municipal League, the act is designed to bring substantial funds to assist in managing and maintaining your public rights-of-way and reduce conflicts with telecommunications providers.
“We’re unique in Michigan,” Siler said. “Because we had a service offering before 2003, we could do the millage and pay for the passing network based on that tax.”
Siler added that which requires any new provider to put all its costs in the rate, “it’s not as attractive to the majority of other municipalities if they did not already have a service offering.”
Since going live with the service, incumbents have responded with new contracts and lower prices. The incumbents probably funded a “Vote No” effort, which was unsuccessful. “They have done their best to convince residents this is not a good thing,” Siler said.
Holland is building an open-access network and would invite others, including the incumbents, to use the fiber network.
“We use the analogy of the streets,” Siler said. “Not every delivery company has their streets. It makes more sense to build and have others use that single infrastructure.”
Allegan County, where Holland partly resides, got funding to build unserved and underserved areas with a fiber solution and will also do an access network.
“We have been talking to them about combining forces to try to attract more providers to both of our networks,”
A phased build-out
Construction on the fiber infrastructure will begin this fall, with completion scheduled for 2026 with Ex2.
The network build will take place in phases, with services activated upon completion of each step.
After it got the necessary approvals to move forward with its plan, Holland conducted a detailed RFP. Ex2, doing similar buildings in New Hampshire and other states, began talking to the city when it learned about its plans.
“Ex2 had a competitive proposal,” Siler said. What caused us to go with them was they had an engineering-centric proposal to best engineer the network.”
In contrast, Holland got construction-led bids that it wasn’t as confident about. “We looked at Ex2’s bid as the one that stood out,” Siler said. “We were very much in line with how we wanted the project to go.”
Holland may be moving forward with its broadband plans, but it can replicate the program in other areas where it provides electricity. About 42 percent of Holland BPW’s electric service territory load is outside the city. The city has gotten inquiries about an FTTP offering in the territory, but today, it is not ready to move beyond Holland.
“What we told them is let’s get the city done first and talk about that,” Siler said. “I am sure on the fringes, we’re going to have an offering and rate because those folks won’t be included in the millage, but to build deep into a township will have to wait.”