Broadband committee drills down on pricing structure

Thu, 02/06/2020 - 5:45pm
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The members of the New Shoreham Broadband Committee sifted through how build-out costs would be distributed among customers of the proposed island-wide high-speed internet service and settled on a pricing structure based on property value. This ad valorem approach means that a homeowner with a high-valued piece of property will pay a greater portion of the infrastructure costs than someone with a lower-valued property.

When the pricing scenarios were presented at a previous meeting, some members were opposed to this approach. But as the discussion carried over to the most recent meeting on Wednesday, Feb. 5, members of the broadband committee found themselves struggling with issues of how best to spread out the costs of the project fairly. There were various scenarios presented to the group. One scenario proposed a very high, one-time cost of connecting each home, and another divided the cost equally between 1,200 subscribers. The 1,200 figure is an estimate of how many structures there are on the island that could potentially be hooked up to the high speed internet system.

“This is a thinking thing,” said Town Finance Director Amy Land, who has been spearheading the project, as the members reviewed the scenarios. “It’s not supposed to be easy.”

After some discussion, member Steve Record advocated for the ad valorem approach.

Record said pricing each instance of connecting the high speed internet service based on property value would even out the differences between "the person with lots and lots of assets who lives closest to the backbone and a very inexpensive drop, and somebody who doesn't have a lot of assets that has a very expensive drop." Record was speaking to the idea that a home with significant value could be located very near the physical connection to the internet, which would result in a relatively inexpensive connection, while there will be instances of homes with considerably fewer assets located far away from the poles and wires and would therefore be much more expensive to connect.

Broadband Chair Lucinda Morrison was one of the members originally skeptical of this approach, but said "I feel better about that now that you guys have talked about it more. I think this is doable."

"This socializes the cost of the drop as well as the infrastructure," said member Ray Torrey, who also favored the approach.

Land said that this was similar to the approach taken when the town installed its sewer system. While homeowners connecting to the system paid more, the cost was also shared by the entire island. Land also said an upcoming Water Company project to install a new water main on Payne Road and High Street would be a partial cost-sharing by all island taxpayers, with the primary burden going to Water Company ratepayers.

“We’re establishing infrastructure for the entire town,” said Land.

The other members of the group were in general agreement, and asked Finance Director Amy Land if she had any qualms about this approach. "Now that we have expressed our feelings, what do you think is next in the game plan?" asked Torrey.

Land said that now that she knew how people were leaning, she said she would look at the scenario and come back to the group with more information and questions. The entire project will go before voters at the Financial Town Meeting scheduled for Monday, May 4.

The next meeting of the Broadband Committee is scheduled for Tuesday, March 3 at 3 p.m. at Town Hall.