April 24, 2017
The Sun Prairie, Wis. City Council recently voted to sell its government-owned broadband system to TDS Telecom for $2.88 million. The deal appears to be a win for city taxpayers, local broadband consumers, and the city itself.
First, the deal will allow the city to completely relieve itself from the debt associated with the network, which is currently operated by Sun Prairie Utilities (SPU). As the Sun Prairie Star reported, the deal also will ensure that citywide deployment of high-speed broadband will happen at a faster pace and “without the $25-30 million price tag and risk to taxpayers.” TDS is expected to offer service to the entire city by 2019. It would have taken five to 10 years for the city utility system to get to that point, officials said.
The SPU network serves 513 residential customers (out of a city population of about 32,300), 47 businesses, and the city’s school system. The second benefit of the sale is that those customers can now expect lower prices. According to The Star, “City officials said that the city and the school district who now use SPU fiber optic service will see price drops or higher service levels under the TDS contract.”
The third benefit is that written into the deal is a revenue-sharing agreement for the city. According to City Attorney Anita Gallucci, the city will get a 7.5 percent cut of TDS revenues “for five years once certain goals are met.”
Sun Prairie Mayor Paul Esser supported the agreement. In a separate Star story he said, “[T]he community will be well served to have TDS here.” Sun Prairie Utilities Manager Rick Wicklund also supported the sale, argued that it “is a real win for the city to take that financial liability out of the utilities and the city.”
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