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Waterloo telecom board sets fiber rates 'much cheaper than what we've been paying'

July 21, 2023
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DATE: July 21, 2023
BY: Maria Kuiper, Waterloo-Cedar Falls Courier

WATERLOO — The city’s telecommunications board was energized Wednesday after it
introduced and passed initial rates for Waterloo’s new fiber network.

“This is a pivotal moment for Waterloo Fiber Utility,” said Andy Van Fleet, chairperson of the
board of trustees, as rates were established for its planned internet service.

The city will offer speeds of 300 megabits per second, one gigabit per second and 10 gigabits
per second for both upload and download.

For 300 Mbps, the cost will be $49.95 per month; for 1 Gbps, it will be $69.95 per month; and for
10 Gbps it will be $109.95 per month. That includes no data caps, no hook-up fees and the use
of a local service.

Van Fleet, who personally uses Mediacom for his internet at home, said he pays $129 per
month for 300 Mbps with data caps.

Residents who want a full package of internet, television and phone have two options. For 1
Gbps, the cost is $179.95 per month. For 10 Gbps, it is $223.95 per month.

Three options will be provided for businesses. For 300 Mbps, it is $109.95 per month; 1 Gbps is
$249.95 per month; and 10 Gbps is $289.95 per month. Van Fleet said for his business he pays
$995 for 1 Gbps.

“All the work that has been done comes down to this,” board member Michael Young said. “It’s
reliable, it’s local but it’s much cheaper than what we’ve been paying.”

There also will be a discounted internet rate for households qualifying for the Universal Service
Administrative Company’s Lifeline program.

Residents can use Lifeline if their income is 135% or less than the federal poverty guidelines. If
someone in a household participates in the Supplemental Nutrition Assistance Program,
Medicaid, Supplemental Security Income, Federal Public Housing Assistance, or Veterans
Pension and Survivors Benefit, they can receive 100 megabits per second for $29.95.

Households using Lifeline can also receive a $30 per month subsidy, ultimately making internet
for these households free. Eligible households must apply for the program through the Federal
Communications Commission as well as contact Waterloo Fiber.

Looking at competing provider Mediacom Xtream Internet, speeds are not parallel. For example,
for a plan with 100 Mbps upload speed, the user is receiving 10 Mbps for a download speed for
$24.99 per month for the first year.

For a 300 Mbps upload speed, it is a 20 Mbps download speed for $44.99 per month for the first
year. It is $54.99 per month for the first year for a 1 Gbps upload speed and 50 Mbps download
speed. These services also implement data caps. There was not an option for 10 Gbps.
After a year of service, Mediacom bumps up the prices of its services.

Neighboring Cedar Falls Utilities also uses parallel upload and download speeds. However, if
residents don’t use CFU’s television service, each payment is $12 more than listed. Rural
residents also have to pay $5 more than the listed price.

CFU’s 250 Mbps speed is $45.50 per month, $64.50 for 1 Gbps and $105 for 10 Gbps.
CFU recently added 10 Gbps to its services – something Mediacom didn’t provide.

“One gigabit was cool a few years ago – 10 gigabits is standard,” Courtney Violette of Magellan
Broadband said. Magellan is advising the city on the fiber project. “We didn’t think it was wise to
deploy something from the last generation (but to) employ today’s current standards that your
peers next door just upgraded to.”

The approval of rates comes after the Waterloo City Council awarded a bid of $77.86 million to
ITG Communications LLC of Tullahoma, Tenn., for the fiber-to-the-premises and backbone
network project.

Funding for the project comes from various sources. In a September referendum, more than
84% of residents voted for a $20 million general obligation bond for municipal broadband. While
such bonds are backed by the government’s ability to tax its property owners, the city plans to
repay them with revenues generated by the broadband utility rather than property tax dollars.

There is money from the federal American Rescue Plan and a federal grant from the U.S.
Economic Development Administration that will be used on the project. The city applied for
additional grants it is waiting to hear back on, as well. Money from other city departments, such
as Waterloo Water Works, also will be used to fund portions of the project.

The first customers are projected to be connected by the end of 2023. The entire project is
expected to take three years to complete.

The fiber optic network consists of two projects. The first is the fiber backbone, which supports
city operations like utilities, traffic, public safety, and smart city initiatives. The second project is
the build-out and delivery of the fiber-to-the-premises services, which can connect internet
access to every home and business in the city.

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