Not only did Gigabit Squared fail on its promise to bring ultra-fast broadband to Seattle last year, but the company also left the city with an unpaid bill of $52,250.
Now, the city wants that money — and it’s taking Gigabit Squared to court in order to get it.
As we reported back in January, financial problems forced Cincinnati-based Gigabit Squared to back out of its plan to implement a high-speed Internet network in 14 Seattle neighborhoods using the city’s dormant “dark fiber” network.
In an initial engineering agreement, the company had agreed to compensate the city for preliminary work by city engineers and staff on the project, while the city and the company worked out a larger master agreement, which was ultimately never completed.
As noted by the Puget Sound Business Journal, the City of Seattle filed a lawsuit last month against Gigabit Squared. It is seeking the $52,250, plus interest, legal costs, and attorney’s fees. You can see the full court filing here, or at the bottom of this post.
The city did receive a payment of $2,500 from Gigabit Squared in November 2013, but based on the lack of a timely payment for the remaining $52,250 balance, the issue was referred to the city’s law department.
The wrangling over the unpaid bill is noteworthy in part because the sum is so small — a tiny fraction of the many millions that would have been required to get the project off the ground, taking advantage of unused capacity in the city’s 500 miles of fiber-optic cabling.
This is yet another chapter in what’s turned in to quite a debacle.
Announcing the project with then-Mayor Mike McGinn in December 2012, representatives of Gigabit Squared said Seattle would be one of the first cities to take part in its broader $200 million program to bring high-speed broadband Internet access to communities around the country.
Gigabit Squared even announced the initial pricing structure for its Internet service, offering gigabit speeds for around the same price per month as what Comcast charges for much slower 50 Mbps download/10 Mbps upload. The company had been targeting an early 2014 rollout for two of the 14 “demonstration” areas — University District and Capitol Hill — with the rest slated to get access to Gigabit’s network by the end of 2014.
But Gigabit Squared officials informed the city in November 2013 that they hadn’t been able to raise the funding as expected — leaving the project in limbo and presumed dead by many in the city. Indeed, Gigabit did not raise enough money for the project, and its co-founder Mark Ansboury stepped down shortly afterward. The company’s legacy in Seattle ended up being the unpaid bill that the city is now seeking.
Current Seattle Mayor Ed Murray is supportive of turning Internet into a public utility paid for by taxpayer money, rather than partner with a private company like Gigabit. It’s a strategy that McGinn also talked about at the end of his term last year, but how and if that happens remains to be seen.