With Cleveland’s $20 million broadband contract, DigitalC is promising to grow tenfold in just four years, transforming from a small nonprofit with 2,000 customers to a market competitor serving more than 23,000 households.
That’s the pitch that the nonprofit’s new CEO, Joshua Edmonds, made to members of Cleveland City Council’s Utilities Committee on Thursday. But council is putting a hold on the proposal after members questioned DigitalC about its past promises and whether it could deliver on future ones.
“That kind of throws up a red flag for me: You have these monster goals, but you only have 2,000 subscribers,” Utilities Chair Brian Kazy told Edmonds at the hearing.
Kazy said council would revisit the contract at its July meeting.
Mayor Justin Bibb’s administration this year picked DigitalC over major telecommunications firms and other nonprofits as the winner of a multimillion-dollar broadband contract funded with federal stimulus dollars.
City officials hope DigitalC will connect Clevelanders who either can’t afford internet service or just aren’t using it. Leaders of the nonprofit say the company can provide home broadband at $18 per month – without add-on costs like installation charges or equipment fees.
Edmonds, who started as CEO last November, said the nonprofit is shedding its earlier model of serving just those who had no internet connection. Now, DigitalC wants to compete for customers with providers like Spectrum and AT&T, he said.
“We now need to be engaging those customers,” he said. “That was not the model before.”
DigitalC would pair the city’s $20 million American Rescue Plan Act cash with an earlier $20 million grant from the Mandel and Meyers foundations. With that money, the nonprofit would expand its service citywide, Edmonds said.
Rather than laying fiber or cable lines at every household, DigitalC uses wireless technology to connect homes to an existing fiber network. In late May, the nonprofit showcased its connection speeds at a Cuyahoga Metropolitan Housing Authority property in the Central neighborhood.
But to fulfill the city’s contract, DigitalC would have to drastically ramp up its services across the city. The nonprofit, which in 2021 reported a budget of about $6 million, is proposing to spend more than $20 million over the next two years building out infrastructure. The rest of the $40 million would go toward household installations, devices, building up network redundancy and outreach.
On Thursday, some council members were skeptical that the nonprofit could deliver, pointing out that it is still well short of a goal, announced years ago, to connect 40,000 households to the internet.
“DigitalC has a very checkered history of overpromising and incredibly under delivering in this city,” Ward 13 Council Member Kris Harsh said.
At the end of the meeting, Edmonds said he wanted to earn the confidence of council and Cleveland customers.
“I understand our ‘checkered’ past,” he said. “I overstand it. And I take it as my responsibility to not only clean that up, but also put this organization in a position where Clevelanders don’t have to question the value of our service.”
