Lessons Learned from the Muni Broadband Failure in Ontario County, NY

In 2005, Ontario County, New York, with a population of approximately 110,000 at the time, launched the Axcess Ontario project. The county invested about $5.5 million to deploy an open-access fiber backbone, a 200-mile ring designed to connect businesses and anchor institutions while encouraging private Internet service providers to expand fiber-to-the-home (FTTH) service. The network was promoted as a model of municipal broadband innovation and was described as one of the earliest open-access county fiber systems in the United States.

Financing for the project relied on a mix of public and private contributions. A bond issue helped fund construction, with costs partially offset by payments from Empire State Pipeline, which was building a natural-gas line through the region. Ontario County contributed $2.5 million through a loan and a prepayment for government network use, and Casella Waste Systems added $1 million as part of a lease agreement. The project was initially budgeted at $7.5 million but ultimately came in at $5.5 million due to construction efficiencies, including the use of the gas pipeline as a fiber conduit.

The goal of the project was to connect businesses, community institutions, and ultimately attract a fiber-to-the-home (FTTH) provider. The network offered wholesale access to Internet Service Providers (ISPs) but did not provide direct last-mile service to households, which ultimately limited its long-term sustainability. As Newby Ventures explains, the county’s explicit goal was to attract an FTTH provider, but that vision never materialized. Only a limited number of carriers and tenants leased capacity, leaving much of the network unused and revenues below expectations.

After years of underutilization, county officials announced in October 2017 that the network would be sold to Empire Access, a private ISP, through a lease-to-own agreement. Empire later confirmed it had finalized the acquisition in a piece where it also outlined its expansion plans.

Takeaways

The Axcess Ontario case illustrates several key challenges for municipal broadband:

1. Structural Limits of Middle-Mile Models – The county built a 200-mile open-access fiber ring to connect schools, businesses, and government sites but did not provide last-mile service to households, which meant no direct subscriptions, no steady revenue, and limited adoption. Without ISPs scaling up residential service, much of the network’s capacity sat unused, and without direct last-mile connections, revenue depended entirely on wholesale leases to ISPs, which proved insufficient.
2. Private Sector Advantage – Empire Access, with an existing customer base and capital, was able to scale the network in ways the county could not, confirming the role of private ISPs in delivering sustainable expansion. After acquiring the system, Empire Access committed to expand fiber-to-the-home gigabit internet, phone, and security services to communities such as Canandaigua, Geneva, Naples, and Victor, demonstrating how private ISPs are better positioned to translate middle-mile infrastructure into sustainable consumer broadband networks.
3. Fiscal Risk Management – Although officials claimed the lease-to-own arrangement would allow recovery of the $5.5 million investment, the project highlights how municipal broadband can expose taxpayers to long-term risks if adoption falls short. These risks include stranded assets when networks remain underutilized, ongoing operating deficits and debt obligations if revenues cannot cover costs, opportunity costs that divert resources from other public services, and the danger of technological obsolescence if a publicly owned network falls behind private sector upgrades.

Arianna Roberts is a 3L at New York Law School. Amina Cecunjanin-Music is a 3L at New York Law School.