Marathon Co. OK’s $8M loan to Bug Tussel

By Kevin O’Brien

Marathon County supervisors approved an $8 million loan to Bug Tussel on Tuesday, enabling the company to finish installing nearly 200 miles of fiber optic cable and 18 towers around the county as part of a multi-year effort to expand broadband internet in the county’s rural areas.

With a vote of 28-5, the county board cleared the two-thirds threshold required to approve the loan, with repayment slated to start in 2026.

Under the terms of the agreement, the county will use $8 million in reserve funds to issue a loan to Bug Tussel so it can finish work on the countywide fiber loop and a separate project in the Kronenwetter area known as Leathercamp.

Bug Tussel will be required to make interest- only payments for the first five years, followed by a balloon payment after 12 years that will fully settle its debt with the county. The loan itself will be on a 30-year amortization schedule, with an interest rate of 5.4 percent locked in.

The new loan agreement comes after months of negotiations between the county and Bug Tussel, which had previously asked the board to approve $12.5 million in conduit bonds. The request did not have the support of three-fourths of supervisors, which is required for conduit bonds to be issued.

In 2021, the county approved $25 million in conduit bonding for Bug Tussel to build the towers and install the fiber optic cable, and in 2022, the board agreed to issue a loan for up to $3 million for the Leathercamp project. After the company ran into cost overruns, it asked the county to issue additional conduit bonds, which would have increased the total debt by 50 percent.

At Tuesday’s meeting, a couple of supervisors raised concerns about the work not getting done, even with additional money being lent to Bug Tussel.

Supervisor Tom Seubert said he recently read an article saying that the United States had “spent” $41 billion on broadband internet expansion, but “not one person had been hooked up yet.”

“Is this becoming a money pit?” he asked. Supervisor John Robinson, chairman of the county’s broadband task force, said the federal government has allocated over $42 billion for broadband expansion through the Broadband, Equity and Access Deployment (BEAD) program, but none of the money has actually been spent yet.

Robinson said the state’s process for allocating its $1.1 billion share of BEAD money has been “slow and cumbersome,” and he believes none of the projects funded through the program will get started until 2026.

“We are frustrated at how slow that process is,” he said.

In the meantime, however, he said the county can move forward with the projects that have already been started by Bug Tussel. Robinson noted that other internet service providers have abandoned projects in the county due to funding issues, leaving residents without high-speed internet.

“Bug Tussel is not choosing to walk away,” he said. “They want to complete the project.”

Robinson also noted that the county benefits from its relationship with Bug Tussel, which has provided 24 strands of fiber optic cable and access to the company’s towers. This saved the county “hundreds of thousands of dollars” when an emergency services tower went down and the county was able to move its equipment to a Bug Tussel instead of building a new one.

“Our law enforcement is dependent upon that,” he said. “It helps our public safety because we’re putting our equipment on those (towers).”

When supervisor Jason Wilhelm asked what would happen with the interest collected on the $8 million loan, board chairman Kurt Gibbs confirmed that it would go back into the county’s general fund.

Before the vote was taken, Robinson reminded board members that the loan amount was $4.5 million less than what Bug Tussel originally requested and the payback period had been shortened from 15 to 12 years.

According to the resolution adopted by the board, the fiber loop project will provide direct access to high-speed internet access to over 1,900 residents across the county.

“This will expand opportunities for fixed wireless service to people who live within the range of the towers, as well as access to fiber to the premise for those that are located along the route,” Robinson said.