Shentel Looking to Compete with Comcast in State College Market – Statecollege.com

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Telecommunications company Shentel is looking to bring its television, internet and phone fiber network to five Centre Region municipalities. Photo by Shentel.
A Virginia-based cable television, internet and phone provider is looking to bring its “fiber to the home” service to the Centre Region.
Shentel (Shenandoah Telecommunications Company) has initiated cable franchise agreement negotiations with State College Borough and College, Ferguson, Harris and Patton townships. The borough and Ferguson Township engaged Cohen Law Group to negotiate the franchise agreement, which is required by federal law, earlier this year and the other townships have taken steps in recent weeks to do the same. Shentel has offered to pay the attorney fees.
Each municipality would have “effectively” the same contract, Cohen Law Group attorney Phil Fraga said.
If finalized, the agreement would not impact the municipalities’ franchise agreement with Comcast, which is non-exclusive and was last renewed for a 10-year period in 2019.
Shentel, a 120-year-old publicly traded company, has operated in Pennsylvania for a number of years but only recently began building out its fiber to the home subsidiary, Glo Fiber, in the commonwealth. The company currently has 7,900 miles of fiber in Virginia, Maryland and Pennsylvania as well as traditional cable service in West Virginia and Kentucky. In Pennsylvania, Shentel has active Glo Fiber in Carlisle and Hanover, with additional service planned in York, Lancaster, Shippensburg, Greencastle and Waynesboro
Fiber optic networks offer reliable, ultra-high speed bandwidth and symmetrical upload and download speeds. Shentel advertises speeds of 1gigabit per second, Chris Kyle, Shentel vice president of industry and regulatory affairs, told a joint work session of State College Borough Council and Ferguson Township Board of Supervisors in August.
While other companies offer fiber internet in the State College area, none to date also have a cable franchise agreement. The cable franchise authorizes a television service provider to apply for permitting to use public rights of way. Internet and phone services are not subject to franchise agreements.
Kyle said he anticipates the introduction of a new competitor in the TV, internet and phone market will mean lower prices for consumers and better service for residents and businesses.
“What it will do is bring competition … in a big, big way, and that’s voice, video and data,” Kyle said. “This is going to be tens of millions of dollars we’re going to have to invest to pull fiber down the rights of way, the streets to connect the homes and businesses to provide a gold standard for what people need in internet, and that’s fiber technology. With that, we’ll bring competition.”
State College and Ferguson Township both have long been home to two cable television providers in Comcast and Windstream. Borough Manager Tom Fountaine said Windstream gave notice earlier this year it was not seeking renewal of its franchise agreement when it expires at the end of 2022. Fraga explained that the company is moving to a streaming video service that does not require such an agreement.
“We’ve had a unique situation,” Fountaine said. “In most communities, there is one [cable television] provider. In State College, we’ve had competition for many years. And there are other companies that provide similar services here in this community.”
Local franchise agreements with Comcast and Windstream impose a franchise fee of 5% of gross revenues derived from the operation of cable television service within the municipality. State College’s 2022 budget projected $250,000 in revenue from cable franchise fees within the borough.
Fraga said the Shentel agreement would be similar to the one with Comcast.
The project to run fiber through multiple municipalities will be an extensive, and expensive, one, Kyle said. Once franchise agreements are completed, the company will need to go through engineering and permit approvals before construction begins.
“This is just the first step. This is going to be a large project. Pulling fiber across a municipality, we will need to work collaboratively to develop a project plan for that so it’s not too disruptive,” Kyle said, adding that the fiber would follow the same routes as power lines.
Network architecture allows for future upgrades to multi-gigabit speeds without disruption, Kyle added.
It’s expected to be a year to 18 months after agreements are finalized before the first neighborhoods would have access to the service, Kyle said.
“It takes a long time to pull this fiber,” he said. “We’ll move fast but generally it’s 12 to 18 months before we turn our first neighborhood up. We don’t wait to build the whole market. Pace matters to us.”
Comcast will likely start lowering prices and offering long-term deals before Shentel is up and running in the area, Kyle said.
“We will be going into a competitive market,” he said. “Our pricing will have to react to Comcast.”
He added that with the new service, Shentel will be creating new jobs in the Centre Region for sales, marketing and technical operations.
It’s still expected to be several months before an agreement is brought back to municipalities for approval. Patton Township Manager Doug Erickson told the Board of Supervisors on Sept. 28 that he anticipated it would be sometime in May before they saw a final document.
Two municipal leaders said the area has sought for years an extensive fiber network servicing homes.
“About five years ago, I encouraged [Fountaine] to look into getting us a fiber optic company to come here and wire the borough,” State College Borough Council President Jesse Barlow said in August. “We were told by the company, which I won’t name, that we weren’t ready for it.”
“I really look forward to what they are going to be proposing,” Patton Township Supervisor Dan Trevino said in September. “Hopefully, they will decide to enter this market. Fiber to the home requires a huge investment to infrastructure, so if a private entity is willing to undertake that investment, that really alleviates a lot of stress on us to come up with funds.”
The Centre County Gazette’s Vincent Corso contributed to this report.
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