Lancaster city officials have long dreamed of having a municipal broadband network, even though they never actually wanted to own it.
But now, six years after hiring someone else to build it, the city has agreed to buy it.
On Tuesday, the Lancaster City Council unanimously approved the financial terms of a settlement with MAW Communications, a move that will give the city full ownership of an unfinished municipal broadband network that includes 16 miles of fiber optic cable and some 200 residential customers.
Specifically, the council agreed to make a $1.2 million payment to MAW and forgive the balance of the $1.5 million loan it made to the company to build the network. With those agreements finalized, the mayor will enact a legal settlement next month with the company that city officials tasked with building a citywide broadband network but eventually came to see as an impediment to those plans.
“Essentially, this allows us to amend two ordinances from 2017 to use funds that were already allocated for the purposes of a fiber network to settle agreements with MAW Communications and end our relationship with them and retain ownership of the existing fiber optic network,” Councilor Amanda Bakay said.
Breaking up with MAW gives city officials the chance to find a new private partner to help realize their vision for a high-speed, low-cost internet service for residents that also streamlines city services such as remote meter readings, traffic lights and security cameras.
The move will allow the city to "begin the new process to identify partners and plan for the future,” said Patrick Hopkins, city business administrator.
Hopkins noted that a combined $4 million of taxpayer money has been allocated to MAW in the form of loans, subsidies and payments since the city’s relationship with the Reading-based company began in 2014.
City officials did not offer a timeline for getting a new private company to take over the system, saying they must first study the possibilities for completing the system they hope can eventually offer every city resident access to a high-speed internet service.
End of a rocky relationship
The city’s relationship with MAW began to sour in late 2017 when PPL sued the company for making unauthorized and unsafe attachments to its poles. Coming less than a year after the network buildout began, PPL’s lawsuit halted work on the system as well as the signup of new customers for LanCity Connect, a residential internet service that starts at $48 a month.
As it navigated the PPL lawsuit – which was eventually settled in June 2020 – MAW billed the city for some of its legal expenses, charges the city refused to pay and which formed the basis of the legal dispute that comes to an end with the current settlement.
The city also said PPL’s lawsuit revealed MAW had violated its original agreement by not getting proper approval for pole attachments. MAW had also stopped making payments on its $1.5 million loan from the city after returning only about $180,000 in principal and interest on the 13-year loan.
MAW declined to comment Tuesday on the proposed settlement.
With the MAW settlement, the city will have paid about $4.3 million for the system, a price tag that includes professional services, legal bills and other expenses incurred during the past five years.