The Cleveland, OH City Council is halting a $40-million citywide broadband project after concerns with its local nonprofit partner, DigitalC. Cleveland.com reported that the city plans to provide affordable broadband to every resident.
The project’s funding is a combination of contributions from the American Rescue Plan Act ($20 million); the David and Inez Myers Foundation ($17 million); and federal monies ($3 million). The City Council questions whether DigitalC can handle the contract. Cleveland.com reported that the nonprofit has struggled with “much smaller projects in the past.”
“The elephant in the room is, DigitalC has a very checkered history of overpromising and incredibly underdelivering in the city to the tune of a fraction of what was promised,” Councilman Kris Harsh said during last Thursday’s meeting.
The nonprofit, previously known as OneCleveland, then OneCommunity, had set a goal in 2015 of connecting 40,000 homes to broadband by 2025, reported Cleveland.com. However, that number is currently around 2,000. “That throws up a red flag to me,” Utilities Committee Chair Brian Kazy said. “You have these monster goals, but you only have 2,000 subscribers.”
DigitalC’s citywide broadband plan includes providing wireless broadband internet with upload and download speeds of at least 100 Mbps to all Cleveland households. The timeline from start to finish is 18 months. The project would continue through 2026, with DigitalC fortifying its network once all areas of the city are covered, according to CEO Joshua Edmonds.
He added that the service would be available to residents of all income levels at $18 per month for the first five years after completion. Then, DigitalC would be permitted to increase at only the rate of inflation for the five years after that, said Austin Davis, a senior policy advisor for the city.
To be sustainable in the long-term, DigitalC needs to get 25,000 customers in the next four years, Edmonds said. They also need to upgrade their network as “some of the equipment we’re using right now is obsolete,” he added. DigitalC also wants to future-proof its technology to allow for increased speeds.
Although Edmonds understands the city’s hesitation regarding the nonprofit’s capabilities, he is confident those worries are about “the old DigitalC.” He says the nonprofit’s executive board recently underwent a “rebalancing,” affecting communications, marketing, branding, sales, and more, to better compete with large ISPs.
“It’s a different company. It’s a different approach,” Edmonds said during the committee meeting, of the changes DigitalC has undergone.
The city isn’t just concerned with DigitalC’s operations; finances are a major concern. Cleveland.com reported that in 2019, 2020, and 2021, expenses exceed revenues for the company. Between 2017 and 2021, revenues grew by 122 percent, while expenses increased by 174 percent. According to Edmonds, as of 2023, DigitalC has roughly $5 million in its financial reserves and no longer has a deficit.
According to public records, DigitalC scored the highest in impact, content and deployment speed, and outreach during the city’s project bidding process. Other bidders included AT&T, T-Mobile, Spectrum, and PCs for People. The city plans to revisit its potential partnership with DigitalC during its July meeting, reported Cleveland.com.
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