Holyoke Gas & Electric recently detailed how the Massachusetts public power utility is continuing to evaluate residential fiber for its customers.
In 2021, HG&E completed an interest campaign that was designed to better understand customer demand for municipal fiber-to-the-home (FTTH) broadband service.
While HG&E is interested in providing FTTH service and is currently providing residential broadband service within Holyoke on a very limited basis, "there must be sufficient demand for the service for a city-wide venture to make economic sense and not have an adverse effect on utility rates," it noted.
HG&E has been offering fiberoptic internet services to municipal and commercial customers since 1998 and provides wholesale internet services to several Western Massachusetts municipalities that have launched FTTH networks.
In working with these municipalities, HG&E has gained significant experience with FTTH projects and has learned that project economics vary in each community, depending on build-out costs, demand for the service, and rates that customers are willing to pay for the service, it said.
Over the past several years, HG&E has put significant efforts into evaluating the feasibility of serving all Holyoke residents with FTTH service.
"The numbers tell a complex story. Network construction costs are estimated to be over $40 Million, not including the cost to wire apartment buildings and other multi-dwelling units (MDU's). To make the project financially viable, HG&E would need to maintain a 40% subscription rate at about $100 per month per customer. However, market research suggests only approximately 7% of HG&E customers would likely subscribe at rates between $90-120 monthly," it said.
Further complicating this effort, many residents in Holyoke have access to discounted internet through existing providers at rates below $15 monthly. As of February 2024, roughly one-third of City households were enrolled in these discounted programs making it more difficult to achieve the required subscription rates to break even. If this venture does not break even, there would be a significant impact on utility rates to pay the costs for network construction.
"Despite these challenges, HG&E isn't giving up," it said.
In 2023, HG&E completed a citywide network design, dividing the community into several “fiberhoods" and creating a roadmap for a potential gradual rollout to single- family homes. HG&E has also been pursuing various grant opportunities to help manage financial risks.
Some of these opportunities include the following:
◦ MBI Broadband Equity, Access, and Deployment Program Grant, 2025
◦ MBI Residential Retrofit Program, 2024
◦ WeLink Cities Challenge, 2022
◦ City of Holyoke ARPA Application, 2021
◦ Google Fiber RFI Response, 2010
HG&E said it remains committed to monitoring market conditions and funding opportunities that could make municipal broadband a success for Holyoke.
It encouraged interested residents to learn more and complete an FTTH interest form at www.hged.com/ftth, which will help inform future decisions.
