The City of Morden has pulled the plug on Morenet, the high speed internet service that was supposed to be offered to every home and business in the city.
Instead, only about 450 homes paid the $400 installation fee to enjoy the service, and projected city costs ballooned.
Mayor Brandon Burley announced the decision to cancel Morenet with all operations ceasing as of Oct. 30.
Burley said the decision was made not because of policy or social internet vs. free market internet, but because of cost.
“Initially the cost was $300,000 to $400,000 in capital cost and $100,000 in operating costs annually,” he said. “At this point we’re well beyond those numbers.”
It is estimated the city spent $650,000, funds that were leveraged through additional taxes.
“After examining the technical viability, costs, regulatory requirements, and associated risks we did not feel that as a long-term solution Morenet would be a fit for the City of Morden to operate as a public entity, particularly as the city continues to grow,” Burley said. “The city of Morden will continue to explore opportunities to recuperate or redirect the initial investment to maximize the connectivity of city-owned buildings and facilities so we can continue to provide efficient public services.”
Morenet was announced with great fanfare in April 2018. The service was to offer 100 megabit per second upload and download speeds for the first few years, working up to one gigabit per second speeds by 2021.
In fall of 2018 the project stalled because of issues with towers. That was resolved and the project proceeded.
But in February, 2019, Burley said they became aware of new costs.
“The costs were so incredibly different from what was originally proposed that we felt it was necessary to do a new analysis as a new project, calling it Morenet 2.0,” he said. “By May of 2019 we had determined that we could not proceed with the project.”
The city entered the negotiations to sell Morenet, saying they had to keep the plan under wraps to maintain the value of the asset. That changed recently.
“In September of 2019 we saw what was presented as a final offer which included terms that were not acceptable to the city,” he said.
The city had budgeted $1.5 million for this year of which $800,000 would come from borrowing. That money has not been spent.
There will be no refunds to either taxpayers who paid for the service through taxes and did not receive it, or those who paid $400 for installation.
Burley said some paid $400 for equipment that is no longer usable while other members of the community paid through taxes for services they never received.
“There’s no clean way,” he said. “There’s no right decision on this. If we say we’re going to reimburse that fee it punishes everybody who never got the internet in the first place. The decision has been made for residential and commercial users that no refunds will be offered.”
Besides, Burley pointed out that at $400 for one year of internet ($33.33 monthly), they paid less than most people pay for the same service.
The city has not made an estimate for cost recovery. “We will be looking to recover as much value as we can from that equipment,” he said.
Burley said he expects criticism for ending the Morenet program.
“Many will accuse us of not being bold,” he said. “But I think for us to have allowed it to happen wouldn’t have been bold, it would have been reckless.”
Burley said there remains opportunity in Morden for high speed internet.
“We’re crying for it and my next job is to ensure we get it,” he said. “That’s something I’m going to pursue vigorously.”
Morden residents are urged to pick up an FAQ sheet at the Civic Centre or check mordenmb.com/morenet for up to date information.