Two years ago, Leelanau County contracted the Opelika, Alabama-based Point Broadband to provide high speed internet to “unserved” and “underserved” homes in the county by the end of 2023. Unfortunately, the project has turned into something of a debacle. About three-and-a-half months into the new year, only about 38% of the “unserved” areas are now serviceable, and the county consultant no longer seems to believe they’ll be done by the end of 2024 either.
The county’s consultant on the project, Chris Scharrer, attributes these delays to the county’s failure to reach an agreement with the Grand Traverse Band, the increased costs of labor and materials, and organizational structure changes within Point Broadband – most notably with the creation of a new company president position, occupied by Patricia Martin.
The county has gone through its own fair share of changes since signing the Point Broadband contract, as it recently welcomed former Traverse City Mayor Richard Lewis as interim administrator. Although Lewis’ time with the county is expected to just be a few months, he seems to already be making his presence felt in talks between the county and the internet service provider.
Although the county board of commissioners will look to sign another contract extension with Point Broadband next month, Lewis explained that he hopes to extract some guarantees that ensure this is the last time their deadline is extended.
“I was pretty blunt when we were talking to them. I said, ‘No, I don’t need excuses, I just need results. Those are your issues, we have ours, we need to get this done.’ I feel like — talking to their CEO — they are wanting to get this done. They want to use us for references and everything else. They got to show us something, and I feel like they’re going to,” Lewis said.
County officials said they have taken a firmer stance in negotiations partly because Point Broadband has gotten a lot more work in the last two years and seems to have allowed newer projects to take higher priority over their contract with Leelanau County.
Lewis and Scharrer said that the next Point Broadband contract will guarantee that 96% of the project is completed by the end of this year. This work would carry coverage all the way to the Grand Traverse Lighthouse and reach 3,400 of 3,522 “unserved” addresses identified by the county.
The remaining 4% of the work — which would include portions of Bingham and Elmwood townships that are “mostly served” by Charter Communications already, according to Scharrer — is to be completed by summer 2025, per this new contract.
Broadband initiatives in rural areas like Leelanau County have become more common in recent years partly through grant opportunities through state and federal governments. This led to greater competition for contracts and increased demand for certain materials. Scharrer said that companies like Point Broadband are seeing as much as a 20% increase in material costs annually.
Sharrer hopes to encourage Point Broadband to complete this project before costs are driven up even further when the U.S. Treasury awards the next round of Realizing Opportunity with Broadband Infrastructure Networks (ROBIN) grants. Applications for ROBIN grants closed late last year.
Despite the increased costs of the project, however, Scharrer assures readers that the county will not be paying Point Broadband more. When the county signed the contract with Point Broadband in early 2022, it awarded the service provider $5 million. The vast majority of this contribution came from the county’s $4.2 million in American Rescue Plan Act (ARPA) funds.
“There’s no more money going to Point Broadband. That has not changed since the beginning.
The county has committed $5 million - most of it through the ARPA program - as their contribution to the project. That hasn’t changed, and it will not change. Any cost overages that Point Broadband might be experiencing is entirely on them to cover,” Scharrer said.
The county will also consider extending Sharrer’s contract through the next deadline, as he reviews Point Broadband’s work upon completion before payments are transferred to the internet service provider.
As of Friday, Sharrer said that about 500 customers in Leelanau County have signed up for service with Point Broadband so far. He anticipates that the number of customers will “grow rapidly” in the next two months as seasonal residents are expected to return to the county and may seek high speed internet coverage.
Unfortunately, Point Broadband customers throughout Michigan have reported frequent outages, and Leelanau County is no exception. However, Scharrer told the newspaper that these service problems will hopefully be greatly reduced now that Point Broadband has reached an agreement with Wolverine Power Cooperative, through which the Cadillac-based company will supply a secondary redundant circuit.
“They’re going to supply the backup circuit so the outages that we’ve been experiencing should start to be eliminated. Most of the outages that have occurred would have been preventable if they had the backup in place. It’s been a long process to get a second supplier that’s completely separate from their primary supplier, which is Peninsula Fiber Network (PFN). That should be in place within two weeks,” Scharrer said Friday.
Interim Administrator Lewis said that the county board of commissioners will review the contract extension with Point Broadband at their executive meeting on May 14 and consider approving the proposal on May 21.
