YOUR BUSINESS AUTHORITY
Springfield, MO
YOUR BUSINESS AUTHORITY
Springfield, MO
Last year’s conclusion of a nearly $150 million multiyear fiber expansion project by City Utilities of Springfield left local officials pleased with the result even as the internet provider that originally partnered with the utility changed hands.
CU officials say the fiber project, which began in December 2019, is one of the larger economic development projects in Springfield’s history, bringing gigabit internet to over 118,000 home and business addresses in town. SpringNet, a division of CU, installed over 1,000 miles of fiber-optic cable across the city, providing access to high-speed internet. Installation work wrapped in March 2023, near the three-year estimated goal – an accomplishment that CU General Manager Gary Gibson said was even more impressive amid the COVID-19 pandemic.
The project’s originally announced $120 million cost was an estimate based on preliminary designs, Gibson said.
“Once we did the detailed design, it looked like it was going to be approximately $150 million for the total bid. We came in at about $148.5 million total for the project,” he said.
Provider change
The project began as a partnership with CenturyLink Inc. (NYSE: CTL), which in September 2020 rebranded to Lumen Technologies Inc. (NYSE: LUMN). SpringNet Director Jeff Bertholdi said the two companies entered into a utility lease agreement, in which CU handled installation of the lines, and Lumen leased the lines and provided internet services via Quantum Fiber, its platform for fiber-based connectivity. In October 2022, Lumen sold its incumbent local exchange carrier business in 20 states, including Missouri, for $7.5 billion to internet service provider Brightspeed LLC, of Charlotte, North Carolina, according to media reports.
Officials declined to disclose financial terms for the 30-year lease agreement, but the initial lease period is 15 years, followed by three autorenewal periods every five years. Bertholdi said no terms of the agreement altered with the change in providers, as Brightspeed now leases the network and builds system drops to all homes and businesses that request service. According to officials, AT&T is the only other local fiber internet provider, although Mediacom, T-Mobile and Nixa-based Total Highspeed LLC are among other companies offering internet service in the Queen City.
When Brightspeed became the provider in October 2022, they inherited roughly 7,500 users in Springfield from Lumen, said Steve DeCaspers, vice president of marketing. It has since grown the users, which he noted as primarily residential, to 11,400 addresses, a 52% increase. That equates to just under 10% of homes and businesses in the coverage area. He declined to disclose the breakdown of residential to business customers but added the company has primarily focused on home connections at this point.
“We think there’s significantly more growth opportunity for us in Springfield. Those numbers are meeting expectations,” DeCaspers said. “Our expectations are growing though, as we get to know more about the market, more about how to deliver the right customer experience and the right value.”
Boosting its marketing efforts to grow subscribers is in the works, he said, noting the company has primarily done direct marketing to residents’ mailboxes and email inboxes, as well as digital efforts on websites. He declined to disclose the company’s marketing budget.
“We do have plans to engage and ramp up our local marketing in 2024, and you will see Brightspeed’s presence in the community increase beyond those direct and digital channels into some community events, some outdoor advertising, etc.,” DeCaspers said, adding he has several billboards on his future project list.
Brightspeed is actively deploying fiber internet in 17 states and has fiber broadband customers in its entire 20-state footprint, according to officials.
Pricing in Springfield for Brightspeed’s fiber internet service is $59 for 200 Mbps speed, $69 for 500 Mbps speed, and $79 for the gigabit plan, which provides speeds of up to 940 Mbps. When service was introduced via Quantum Fiber, prices started at $65 per month, according to past Springfield Business Journal reporting.
Richard Reding, managing partner for multicarrier telecommunications provider TierOne Solutions LLC, said via email that Brightspeed acquiring Lumen’s legacy assets and operations was the equivalent of having to “take control of a still-moving train.”
Boosting internet speeds was a goal years before CU announced its fiber expansion project, Bertholdi said.
“Our market research that kicked off in 2017 basically said that the average address in Springfield at that time could get around a 50-megabit copper solution or a 100-megabit cable solution,” he said. “Now, we are at 1,000 megabits, so that would be 10 times the cable solution and 200 times the copper solution.”
Internet service overall has permeated the U.S. market, as 92% of households in 2023 were online, up from 83% in 2018, according to a study by analysts at Leichtman Research Group. Broadband accounts for 98% of households with internet service at home, according to the national study, with 60% of broadband subscribers surveyed responding they were very satisfied compared with 5% who replied they were not satisfied.
A public group on Facebook, “CenturyLink and Brightspeed Dissatisfied Customers,” has over 7,400 members, according to the social media platform. Some of those posting on the site complain of connectivity problems, billing issues and poor customer service.
DeCaspers said Brightspeed has focused on significantly improving its rating on Trustpilot, an independent online review platform for online shopping and services. The company’s rating is 3.5 out of five stars among over 2,300 reviews. He also said Brightspeed works to quickly address consumer complaints, an issue he said that every ISP faces.
“There are some Springfield customers felt a little uncared for in the past, but this is an important market for us,” he said. “It’s a unique agreement with the city, and we take satisfying our customers very seriously.”
Reflecting on the three-year project, Gibson said it was fortuitous for SpringNet to launch it before COVID hit.
“COVID really then just did demonstrate the whole need for having high-speed fiber solutions at homes as people did their schooling from home,” he said. “They worked from home; they definitely got their entertainment from home because that was their only option. It really showed the need for that in the community.”
He said the project was not immune to challenges during the early portion of the pandemic.
“Workforce was really the big issue at the first probably year, year and a half of the project, trying to find linemen and fiber stringers to build that stuff,” he said.
‘Future proof’
Gibson said fiber is always going to be a huge piece of a robust communication system for a community, even as technology changes. CU officials said that places Springfield in a desirable position for internet service over the next several decades.
“Thankfully, one of the main key points of our construction was to construct something that was more or less future proof. When you look at the very basic components that we bought and installed in Springfield, all that needs to change is the electronics on the end of it,” Bertholdi said. “The fiber that we installed is really capable of unfathomable speeds. We feel like we’ve constructed a network that will last many decades, and all that will be changing is just the customer’s equipment to make it go faster and be more capable.”
As for a number goal for its customer base in Springfield, Brightspeed is staying tight-lipped.
“We’re not even setting a target for ourselves,” he said, noting the company wants to keep totals growing month over month.
Gibson said the fiber expansion project definitely met CU’s expectations, pointing to the 2023 Wall Street Journal story that named Springfield at the top of its list of best places to live for remote workers as verification of high-speed internet’s value for the community.
“It accomplished our goals of making sure that there was digital equity and that everyone in Springfield had access to high-speed broadband and really truly made Springfield a gigabit city,” he said.
Moseley’s Discount Office Products was purchased; Side Chick opened in Branson; and the Springfield franchise store of NoBaked Cookie Dough changed ownership.
When I initially signed with CenturyLink/Quantum, I was told by the sales rep that the $65/month price for gigabyte service was LOCKED IN at that rate for 15 years because of the contract agreement with City Utilities. Recently, my service increased to $70/month. When I inquired with CU's customer service, I was told that they don't set the rates and that I would have to talk with Brightspeed. I feel like I was either given fraudulent information by the Quantum representative who just wanted to make the sale or City Utilities' front-line customer service staff are unaware/unwilling to answer these questions. I would appreciate someone looking into this matter a little more deeply. I am not the only one who believed the $65/month rate was locked for 15 years.