Willmar Council rejects Charter offer, continues city fiber-optic project instead
on Monday in a split 4-3 vote approved a motion declining to accept the offer by
to end the
Councilor Carl Shuldes made the motion, which was seconded by Councilor Vicki Davis. Both voted in favor of the motion, along with councilors Justin Ask and Tom Gilbertson.
Voting against the motion were councilors Stephen Gardner, Tom Butterfield and Rick Fagerlie. Councilor Audrey Nelsen was absent from the meeting.
"I think it's time for the council to make a decision," Shuldes said when making the motion. " ... I think the people of Willmar have spoken very loudly, very clearly, they want this to happen, and I'm in agreement with that."
This decision comes after Charter, which does business in Willmar under the name Spectrum, on Feb. 7 sent a letter to the Willmar mayor and council stating that Charter would build out a fiber-optic network in the
at no cost to the city, but only if the city stopped its plan to construct a city-owned, open-access fiber-optic network throughout the whole city.
Charter also promised to upgrade its existing network to provide better, faster and more reliable service to Willmar businesses and residents.
Four Willmar residents spoke in favor of the Connect Willmar Initiative during the public comment portion of the meeting.
"My concern with what Charter is offering is not to provide better service to the residents, but to eliminate healthy competition for the residents of Willmar," said resident Jim Miller, who said he is a retired information technology professional. "I'm excited about what is offered with the fiber project, but I'm concerned that the tactics that are being used by Charter are not in the best interest of the city of Willmar."
"I wasn't really surprised that Charter stepped up. I was just disappointed that they didn't get involved at the very start," said David Feist, who was representing TPI Hospitality. "They still have the option to be a provider, but instead, they've been an opponent to this project from the very start. And to me, it seems very transparent what their motivation is."
TPI Hospitality owns Best Western Plus, the Willmar Conference Center, Holiday Inn Express, Country Inn and Suites, Ruff's Sports Bar and Green Mill.
Feist noted that even though Charter is promising to build out fiber in the WIllmar Industrial Park and upgrade its services throughout the city at no cost to the taxpayers, Charter will recoup its costs in the form of fees and increased charges.
"It's not very often, at least to my knowledge, that a government entity has the ability to create a revenue source, and it's not tax-based, and also has the ability to help the residents and the business community in opening access up to competition," Feist continued. "From my perspective, it's a win-win — the city gets a revenue stream ... and then, also, the residents and the businesses see the benefit of competition, which should mean lower rates."
Research and planning for the Connect Willmar Initiative began two years ago after the city issued a request for proposals to build out fiber-optic services in the industrial park and the city accepted
proposal to build the citywide network; Charter did not submit a proposal.
The city of Willmar, the Willmar Broadband Committee and Hometown Fiber have invested approximately $650,000 and countless human resource and volunteer hours on the initiative.
The $24.5 million project will be funded with general obligation bonds, which, with interest, will be closer to $31 million. Fees paid by internet service providers who wish to operate on the network will be used to pay the principal and interest payments on the bonds, as well as the costs for network maintenance and operations.
Members of the Willmar Broadband Committee include councilors Butterfield and Ask, Willmar residents with experience in the field of internet technology Dave Sisser and Larry Fujan, and four city of Willmar staff members. They include Dave Hillenbrand, communications and multimedia technician; Jonah Johnson, information systems coordinator; Planning and Development Director Christopher Corbett; and City Operations Director Kyle Box.
A memo from the Willmar Broadband Committee included in the City Council's meeting packet "strongly" suggested that the city move forward with the Connect Willmar Initiative.
"Charter Communications does not need Council approval to apply for a permit or install fiber in the industrial park, nor do they need approval to provide existing customers with higher internet speeds, more reliable services or competitive rates," the memo states. "Pausing this initiative goes against the community's need to increase service providers and offer more options to residents and business owners."
The memo goes on to state, "While there are risks associated with this endeavor, they are minimal compared to the inaction of private interests, which has added cost burdens to residents and businesses relying on an unreliable and dated coax network."
It notes that evaluations of the initiative show that it will yield returns that could be reinvested in the city and will provide a "more superior system than what is currently offered elsewhere in the state" and "forward-thinking cities must explore initiatives to create an environment that attracts and retains businesses and residents for growth."
Box shared a simplified chart at the meeting sharing the financials of how the Connect Willmar Initiative will be funded and how it will generate revenue.
"Ultimately, we have conservative goals and numbers put in place in the pro forma to ensure that the Connect Willmar project isn't going to overpromise and underdeliver," Box said.
He noted that it will take several years to get to the 40% take rate, which is the percentage of households and businesses that sign up for service on the network. However, the Connect Willmar Initiative is still expected to generate millions of dollars in revenue for the city.
Fagerlie, Gardner and Butterfield remain skeptical that the Connect Willmar Initiative will be successful. Gardner also questioned, "What other monopolies are we going to go after next?"
However, other councilors agreed that the initiative is providing needed infrastructure for the city to provide better services for residents and businesses. They also argued that the initiative does not prevent Charter from continuing to do business or upgrading its services in the community.
The West Central Tribune reached out to Charter for comment following the meeting. Charter will no longer be installing fiber-optic lines in the Willmar Industrial Park, but it does intend to continue its plan to upgrade its services beginning in 2026, according to Mike Hogan, senior director of public relations.
"Spectrum's commitment to serving the Willmar community is unwavering," he said in an email response. " ... Spectrum and our team of local employees will continue to advance our comprehensive plans to enhance our network infrastructure, including our commitment to provide reliable, high-speed internet service with symmetrical and multi-gigabit speeds."
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