Cleveland is keeping a tight rein on broadband provider DigitalC even as the city sets aside $20 million in stimulus dollars for the nonprofit to expand home internet service across town.
In June, members balked at the Bibb administration’s pick to provide inexpensive broadband citywide. DigitalC had a history of falling short of its promises, council members said – a history that even the nonprofit’s new CEO, Joshua Edmonds, acknowledged.
The debate took an unusual detour – and angered the administration – when council prodded DigitalC over a Miami Beach conference attended by Mayor Justin Bibb last year.
But now, City Hall and Utilities Committee Chair Brian Kazy have a new DigitalC contract terms in hand that City Council can live with. Under those terms, the city won’t pay the nonprofit at all until it signs up thousands of households for internet service.
Council approved the contract Monday night.
Cleveland will pay DigitalC in installments only if the nonprofit can meet sign-up benchmarks over the next four years. Austin Davis, the mayor’s senior policy advisor, called the deal “one of the most aggressive performance-based contracts that we’ve seen.”
To win the full $20 million, DigitalC will have to sign up 23,500 new households over the next four years, according to a terms sheet shared with council. The company and a consortium of partners must help 50,000 people with digital literacy training or other internet services.
Accomplishing that will require a massive expansion of the nonprofit’s $18-per-month internet service across the city. DigitalC currently has about 2,000 subscribers.
Kazy said the stringent contract terms protect the city while still opening the door to an affordable, citywide internet service.
Edmonds told council that DigitalC was committed to the city it called home, even as it worked to learn from its shortcomings. The nonprofit is competing with much larger corporate internet providers, a few of which applied – and lost out – on the city broadband contract that DigitalC won.
“We are the underdog,” Edmonds said. “We know that.”
Ward 8 Council Member Michael Polensek said DigitalC would have to prove that it can deliver on its promises, and that council will be watching – in his words, “The eyes of Texas are on you.” That extended to the Bibb administration, too, he said.
“The administration’s credibility is on the line, as well,” he said. “This is who you recommended. This is who you advocated for. So you have as much skin in the game as they do. And I learned here a long time ago: You don’t want to get rug burn.”
An earlier version of this story misstated part of the the terms of the deal with DigitalC. The company, along with a consortium of partners, must assist 50,000 people with internet services. It does not need to sign those 50,000 up for its own internet service.