Traverse City’s public electric utility, Traverse City Light & Power, launched a government-owned internet network in 2020. TCLPfiber is backed by tens of millions of tax dollars and is rolling out in five phases, with broadband being built out and plans sold to customers.

But the network has already fallen far behind what the electric utility promised the public. In its latest board meeting documents on Oct. 11, the Fiber Fund shows a negative cash balance, and “staff is requesting the Board approve an additional amount” from the original loan. TCL&P borrowed money from Traverse City’s Economic Development Fund and needs an extra $177,344 above the nearly $3 million the utility expected.

What is causing the Fiber Fund’s negative cash balance? The board notes tell us: “[R]evenues are 73.71% of budget relating to the lower take rates than expected for the Fiber to the Premise Project.” Rather than gaining revenue from the project, TCL&P saw a net loss of more than $155,000.

Traverse City and the utility approved $18.2 million in borrowing for this network and the federal government approved $14.7 million. According to a report in The Ticker, the federal funding from the U.S. Department of Agriculture is behind schedule. However, TCL&P says, “Overall you can see that this project is still trending in the right direction.”

Indeed, in March of 2022, there were 640 active customers for the network. The board is now reporting 730. But the increase in customers is moving at a snail’s pace compared to what was initially promised. And although TCLPfiber heavily promoted its gigabit speed – that’s one of the key reasons the network launched – hardly anyone is signed up for it. In October, there was no increase in residential 1 GB customers, who are still numbered at 102 as there were in March.

We are now two years into a government-owned broadband network in Traverse City. If anything, it has gotten more taxpayer money than expected, with over $30 million in loans. Traverse City Light & Power originally projected bringing in more than $1.5 million per year in revenue from the fiber project – they are on track for $668,000 for the year. Just more evidence that the Traverse City fiber plan is falling behind.

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