New fiber possibility for the City of Red Oak

Farmers Mutual Telephone Company CEO Kevin Cabbage now believes there’s a strong chance to bring high speed fiber optic broadband service from FMTC to the Red Oak community, at no cost to the city.
Speaking before the Red Oak City Council during its regular meeting Monday night, Cabbage said the business plan was to bring fiber to the premise, with a goal of consumer broadband affordability, and due to the sometimes long turnaround in fibr investment recovery, FMTC seeks funding opportunities from the local, state, or federal level.
To date, FMTC has applied for, and been the recipient of two USDA Reconnect awards.
“In round one, there was $650 million available, and to be eligible you had to be in an area that had worse than 10 mg down and one mg up internet connection. If anyone had more than that, they were considered served, and ineligible for funding,” explained Cabbage.
Cabbage said rural areas of Red Oak were deemed eligible, and they received a $6.5 million  award that was 50% grant and 50% loan.
The second round was a $4.8 million award for rural Clarinda and Bedford that FMTC received, and work was underway in those communities for fiber optic internet as well.
Cabbage said the reason for his Red Oak Council visit was that the community was now a potential candidate to receive USDA Reconnect funding.
“Applications are due Feb. 22, and what’s different with this round is that there is a scoring mechanism against other applications,” Cabbage said. “Among the scoring mechanisms are rurality, affordability, net neutrality, and wholesale services. We think that we will score very highly in those areas. Also, the criteria now is 100 mg down and 20 mg up, which does make the City of Red Oak eligible for the program. We feel we have a good opporunity to receive this funding.”
Cabbage outlined the amount of funding they’d be seeking for the Red Oak Community for fiber optics.
“We’ve outlined 2,894 houses and business that we could connect up to, and about 54 miles of fiber is what we’d be putting in the ground, and we’d be looking at a cost of $14.7 million,” Cabbage explained.
The application was limited to one, at a total of $50 million, and they were also applying for funding for projects in Clarinda, Bedford, and Gravity, at a total cost of nearly $37 million.
“The risk here is that there is only $250 million available, and our application is nearly 15% of that. But we feel we have a good opportunity of securing that, and I’m not sure when the next time will be for us to apply for this amount of funding. But I’m making it clear, we are taking a risk,” commented Cabbage.
Another reason for Cabbage’s visit was to determine whether the city would assist in overages.
“By the time we get the funding and get these things out for bid, we’re looking at a cost increase of 10% to 15%, amd while we could build that into the application, we’re putting further risk on the acceptance of the application, so my question to the council to consider is, if we were awarded the grant, and the bids came over at 5%, would the city help us with the overage amount so we can keep the project going. That’s not an answer we’re seeking now, and hopefully that is not the case, because it’s always been our goal to get this accomplished without seeking money from enywhere else,” Cabbage stated.
Even if awarded, construction and would not begin until at least 2023.
No action was taken by the council at the meeting, and Cabbage’s presentation was informational only.