Ernest Rollins and Kurt Christian, Herald-Times
Bloomington's high-speed broadband future is in the air after the city announced its partnership with Canada-based fiber infrastructure investor Axiahas dissolved.
The break in the partnership came Thursday afternoon, and Mayor John Hamilton said he thinks there is disappointment on both sides.
“The negotiations made clear that Axia as the operating company was very bullish on Bloomington, on their model and their match,” Hamilton said. “But their private equity partners, which joined in the last year or so to support the U.S. expansion, could not pull the trigger to invest the tens of millions of dollars that Axia felt were appropriate to invest.”
Axia CEO Art Price said in a Thursday telephone interview that the proposed Bloomington model didn't fit its parent company's return/risk/reward profile, and that projects of this kind have to raise shareholder's capital. Partners Group is a global private markets investment manager that acquired Axia NetMedia in March 2016.
While the open access model approach proposed for Bloomington has been accomplished internationally, it would have been the first time the company would embark on this kind of model in the United States. Open access would allow any company to locate on Axia’s physical fiber infrastructure for a fee.
“While Axia’s management team strongly believes in the merits of our open access model, our business case does not deliver financial returns required by our owners to compensate for the risks inherent in being the first company to offer this unique model in the United States,” Price wrote in a letter addressed to Hamilton and dated Thursday.