Clark Board takes preliminary step on broadband upgrade

The Clark County Board of Supervisors last week gave its preliminary approval to a project that could see as much as $18 million invested in a broadband internet/cell phone service upgrade in the county. The county would not actually spend that money, but would allow a private firm to use the county’s strong municipal credit rating to obtain funding for new towers and other infrastructure needed to provide faster internet speeds here.

On a 16-13 vote at a May 19 meeting in Neillsville, the Board approved an initial resolution that will allow Bug Tussel Wireless to move ahead with plans to obtain revenue bond financing for a multi-county broadband upgrade project. This resolution does not bind the county to participate; the Board is to vote again in July on a final resolution. That measure will need a three-fourths majority vote for passage.

With Fond du Lac County to serve as the lead municipality, the project could eventually include multiple counties and generate as much as $240 million for Bug Tussel to install and operate a broadband network. The counties’ role would be to use their credit rating to obtain lower-interest funding for Bug Tussel, which would then repay the entire sum borrowed. Bug Tussel would then recoup its investment by selling broadband/cell phone services to homes and businesses.

In exchange for use of its credit power, Clark County would receive an “annual guaranty fee” of 40 basis points (.40 percent) based on the amount of its guaranty.

According to Mitchel Olson, Bug Tussel’s chief development officer and general counsel, the company needs the financing power of the municipalities to be able to afford the upfront costs of buying land for towers, erecting towers, installing a fiber optic network, and installing the needed infrastructure to bring higher broadband speeds to the area. Because the counties can obtain lower interest rates than a private company can, Bug Tussel can absorb the upfront construction costs and have time to recoup its investment once the service is in place.

“That’s just what makes this work,” said Brian Della, director of public financing for PMA Financial Network, a firm working with Bug Tussel on the project. “What they’re getting is the fixed rate for 30 years.”

Olson used the analogy of the rural electrification of the country in the late 1930s to describe how the broadband improvement would progress. It is Bug Tussel’s plan to install a main fiber optic backbone through the county that would reach the most possible initial customers, and could then branch off of it to expand services to less populated, underserved areas.

“It’s a very expensive proposition” to lay the initial fiber optic network,” Olson said. “We’re picking areas where it makes sense.” He added that Bug Tussel would have three years under the proposal to install the network, but its goal would be to have that done in one year.

Olson said Bug Tussel -- which is owned by Hilbert Communications -- would eventually sell the improved broadband service. Clark County is recognized as a vastly underserved area where internet speeds are less than adequate for many business/residential purposes. He said the improved service should attract new customers, and that will provide the revenue to repay the bonds that will cover the project costs.

Olson said Bug Tussel now charges as little as $50 a month for 25mb internet speeds, and he expects the company’s service will be attractive and competitive in the market.

“Most of the county is DSL (digital subscriber line),” Olson said of the service currently available here. “This is a product that is really, really easy to beat.”

Mitch Weber, Clark County’s IT director, said DSL is among the slowest internet services available, but is the only service available in much of the county. The entire county is defined as either underserved or unserved, meaning residents and businesses cannot buy a service with adequate speeds to stream videos, download programs, etc. That lack of service became acute during the COVID-19 epidemic, Weber said, when schools closed down and switched to a virtual learning format. Many families did not have adequate service for students to learn, he said.

“Because of the slow internet speeds in the county, a lot of the kids got caught and left behind,” Weber said.

Weber said many county residents who have internet service are not satisfied with the speeds.

“Not only that, they’re paying $90 or $100 a month for that service,” he said.

He added that this project would be an investment in the county’s future.

“I ask how this will affect your kids, grandkids or greatgrandkids,” he said.

Rich Marks, chairman of the town of Fremont on the eastern side of the county, spoke to the Board and asked it to consider investing in the upgrade. He called the county’s broadband service the “worst in the state” and said it would be worth taking a risk for the future.

“We have very poor cell phone reception,” he said. “We’ve got to get this backbone built.”

Peter Kaz, president of the Clark County Economic Development Corp. & Tourism Bureau, said the county needs better service to allow it to grow economically.

“This is a true positive thing for our county,” he said. “We need to do something.”

Not all supervisors were in agreement. Fred Schindler of Curtiss said it’s too much of a risk for the county, as it could be stuck with an $18 million bill or owning the infrastructure if Bug Tussel would for some reason fail to meet its obligations. “Clark County provides absolutely all the security and your company provides none,” Schindler said to Olson. “The liability is off the charts, in my opinion ... That’s asking way too much.”

Olson said Bug Tussel and Hilbert Communications would be legally on the hook for the project cost, and so would any company to which they might be sold. He did admit there would be one way that Clark County could be liable.

“The only way Clark County would be responsible for any of this is if our company goes out of business,” he said.

Della said the financing mechanism as proposed is necessary to allow Bug Tussel to get the capital it needs to build the needed network. He said the project is a “really capital-intense venture,” but Bug Tussel will be able to recapture its investment in time.

“I don’t think the worst-case scenario is a likely scenario,” he said.

Bug Tussel has provided some financial background information to the county, and more will be forthcoming before the July vote. While Supervisor Kathy Brodhagen of Abbotsford said the county should already have been given a pro forma on the company, Della said Bug Tussel wanted a preliminary commitment from counties before investing too much expense into generating data.

Other supervisors questioned the longevity of what Bug Tussel is proposing.

“How long is your technology going to last? “asked Ann Molitor of Dorchester. “Is it gonna be next year like dial-up?”

Passage of the preliminary resolution calls for the county to now publish a notice of its adoption, and to give citizens a chance to petition for a county-wide referendum on the financing proposal.

“Clark County provides absolutely all the security and your company provides none. The liability is off the charts, in my opinion ... That’s asking way too much.” -- Supervisor Fred Schindler, Curtiss