A Local Perspective: The Cost of a Municipal Fiber Network vs. Private Options

The Town of Longmeadow is evaluating a plan to create a town-owned fiber-optic Internet network, with construction and operation contracted to the South Hadley Electric Light Department (SHELD). The estimated capital investment is $27 million, to be financed and owned by the Town. The project would take roughly five years to complete.

   

Under the proposed structure, SHELD would not only build the network but also operate it on Longmeadow’s behalf once construction is finished. That includes:

• Hiring and supervising its own staff,

• Managing customer billing and technical support, and

• Providing ongoing maintenance of the fiber system and customer equipment.

In essence, SHELD would act as Longmeadow’s contracted network operator, while the Town retains ownership of the physical infrastructure and the long-term financial obligation.

💰 Prevailing-Wage Requirements and Cost Implications

Because the network is a municipally owned public-works project, Massachusetts law requires that construction labor be paid at the state’s “prevailing wage” rate. These rates — established by the Department of Labor Standards — can run 1.5 to 2 times higher than equivalent private-sector wages for the same type of telecommunications work.

That means Longmeadow’s build cost will be significantly higher per mile than what a private company would pay for the same installation. When combined with public-sector procurement, permitting, and bonding requirements, total capital costs typically exceed those of private builds.

Once the network is built, ongoing operation and maintenance may fall into a more nuanced category. If SHELD provides these services under a service contract as an independent utility entity — not as direct employees of the Town of Longmeadow — prevailing-wage laws usually do not apply to those operational functions.  However, these costs are expected to remain higher than those of private networks, since municipal contracting and staffing rules restrict flexibility and raise administrative overhead.

📊 Comparing the Three Models

Category	Comcast/Xfinity	Private Fiber Company	Municipal Fiber (SHELD–Longmeadow)
Infrastructure Status	Existing, fully operational	New build	New build
Construction Cost	Minimal (incremental upgrades)	Moderate	High (prevailing-wage labor)
Financing Source	Private capital	Private capital or investors	Municipal bonds (taxpayer-backed)
Operations	Existing large-scale staff	Private management	SHELD-contracted operation
Prevailing-Wage Impact	None	None	Required for construction; likely not    for contracted operations
Financial Risk	Comcast shareholders	Private investors	Longmeadow taxpayers/ratepayers

 
Summary

Comcast’s existing hybrid fiber-coax system already reaches nearly every home in Longmeadow and continues to be upgraded to faster standards, reducing the need for costly new construction. A privately financed competitor could theoretically build a new all-fiber system at market-rate labor costs but would bear its own financial risk.

By contrast, the municipally financed network would build new infrastructure at a higher total cost, due to prevailing-wage requirements, borrowing expenses, and the need for a separate contracted operator. If subscriber revenue falls short, ratepayers as well as taxpayers would be responsible for covering the deficit.

As the town evaluates this proposal, the key question remains: 

Will Longmeadow’s investment in a new municipally owned fiber network truly deliver better performance or lower costs than the upgraded systems already available from Xfinity or new private providers?

Jim Moran
48 Avondale Road