The original Freenet project required very little
involvement on the part of the City of
With its core network established, Freenet is seeking very
little additional involvement from the City of
To expand its coverage, increase capacity and improve reliability, the Freenet Project will invest $5.45M in network improvements. These improvements include:
To fund these improvements, Lawrence Freenet will borrow $4.9M from a local lending institution. The remaining $550,000 will come from Freenet's paying members.
This loan yields an exciting opportunity to fund the
Freenet-Kids initiative in a manner that is revenue neutral to the City of
The proposed loan would be guaranteed by both Lawrence
Freenet and Community Wireless Communications Co. the project's primary
service provider. As an additional
indicator of good faith Joshua Montgomery, the project's founder, has
volunteered to guarantee the note ahead of the City of
In addition to providing paper guarantees, Lawrence
Freenet and CWC have agreed to pledge the following collateral to the City of
There are several precedents for municipal involvement in economic and social development projects of this type.
In May of 2004, the City of
This action benefitted 50 families in a small neighborhood by keeping property values at a premium, improving drainage and guaranteeing that the land would remain green space for the foreseeable future.
Though Lawrence Freenet is seeking larger guarantees, the organization will benefit a much larger portion of the community, providing broadband services for up to 10,000 school age children.
This is one of many examples of how city government can get creative in order to finance a project that benefits the entire community.
There are many municipalities throughout the country that are providing significant funds for municipal wireless projects. These communities see that their local governments, utilities, law enforcement agencies and citizens can benefit from universal Internet access.
Large scale projects are underway in
In many of these communities the municipal government has taken the roll of financial partner by either purchasing the network outright or becoming an anchor tenant and guaranteeing a certain level of payment to the network operators.
By providing loan guarantees to Lawrence Freenet the City
Existing municipal wireless networks have largely been supported by the municipalities out of general revenue. The approach that Freenet is proposing, where the non-profit organization pays off the loan, is new and novel. This approach makes the proposal revenue neutral to the municipality, while still providing the city with all of the benefits a municipal wireless network can bring to bear.
Examples of other municipal WiFi networks and their costs to the taxpayers appear below:
The preferred method for financing the Freenet-Kids
project is through a loan secured by Lawrence Freenet and guaranteed by
Community Wireless and Joshua Montgomery. The City of
One alternative method of financing the project would be
to issue a municipal bond offering with Freenet as the beneficiary. Freenet would then pledge the existing
network and the first $53,000 in monthly revenue to the City of
This approach has the benefit that funds for the project could be obtained at an even lower interest rate and the resulting bonds would likely be tax exempt.
Funding for economic development projects can take many
forms. Since City staff has
significant expertise in building economic development packages for desirable
local businesses, Freenet would be very interested in working with the City
As a non-profit organization dedicated to community
service, Lawrence Freenet, Inc. is not well suited to developing and
deploying technology using internal assets. Rather than become a tech company, the organization has decided to
focus on low-income fulfillment, fund raising, strategic planning and
interfacing with both the City of
With this in mind, Freenet will implement the planned
network improvements with its existing service provider, Community Wireless
Communications Co. (CWC) CWC was
selected as Freenet's choice of vendor due to lack
of interest from other parties. Though
Freenet approached local service providers early in the project no local
service provider had any interest in partnering to provide the financing
necessary to get the initial network installed. CWC approached other local service
providers in July of 2007 to inquire about partnering to better serve
Lawrence Freenet sees no need to pursue another vendor for this phase of the project. CWC has demonstrated extensive expertise with deploying infrastructure and currently provides support, maintenance and fulfillment services on the behalf of the non-profit.
Attached as Appendix A is CWC's price fixed bid for installing and maintaining the required equipment for the next ten years. With investors like the Kansas Technology Enterprise Corporation and Douglas County Bank, CWC has the financial wherewithal to ensure that the implementation goes smoothly and the technical knowhow to ensure that the final product is of the highest quality.
A diagram showing the relationship between Lawrence Freenet, Inc. and Community Wireless Communications Co. appears below.
It should be noted that a majority of the staff who work on the Lawrence Freenet Project full time work for CWC rather than Lawrence Freenet, Inc.; however, the board of directors of Lawrence Freenet is ultimately responsible for the project.
It should be noted that as part of any involvement by the