High-speed broadband in Memphis: What's next for $829 million fiber optic project?
A near-billion dollar fiber optic network is one step closer to becoming a reality for Memphis.
On Wednesday, the Economic Development Growth Engine for Memphis and Shelby County (EDGE) approved a 15-year payment-in-lieu-of-taxes (PILOT) for a 3,400-mile fiber optic network. The total project investment cost is worth $829,160,561.
"[This project] is designed to ensure that fiber broadband is affordable, accessible and adopted," said Charles Elliott, CEO of Blue Suede Networks. "As a native Memphian, I am proud to be a part of this project."
Blue Suede Networks is the developer — or better put, the operator — for the fiber optic network. Once completed, the network is expected to provide 85% of Memphis residents access to high-speed fiber connectivity.
"Data from the... Federal Reserve [found] a 10% increase in fiber broadband can increase the GDP by 1.5%, and jobs by 20%," Elliott said. "We can estimate the annual impact of increased high speed broadband to create 2,500 jobs in Memphis, and $240 million of business investments in Shelby County."
The jobs PILOT also includes the addition of 15 new jobs with an average wage of $123,533.
Blue Suede PILOT 15 job position/salary breakdown
2 executive positions: $185,000 annual wage
4 director positions: $152,500 annual wage
9 operators: $97,000 annual wage
The cost of installing a fiber line is the majority of the project's capital investment. Installation accounts for $724,225,657 of the $829 million total. The remaining funds are split: $75,500,305 is allocated for personal property and $29,434,598 is allocated for start-up and soft costs, according to the application.
That hefty $724 million price also accounts for a five-year buildout period. Elliott said he did not yet have an accurate timeline as to the whole of the project, but noted that work would begin as soon as the project was approved. Consequently, Blue Suede Networks has asked for the two-year ramp-up period (included in the PILOT incentive) to be extended to five years.
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Elliott said it's worth the wait. "A high-speed system... is as essential as water and electricity," he said. "It's a generational solution that we're offering that's adaptable to near infinite future uses and needs."
The project is expected to create $11,865,654 in tax revenue of the course of its 15-year span, with a $3,725,352 tax benefit for Blue Suede Networks (via the PILOT tax abatement).
What is Blue Suede Networks?
Blue Suede Networks (entirely different than the Downtown Memphis Commission's Blue Suede Brigade) is an entity of Meridiam Infrastructure North America. Meridiam's global headquarters are based in France. The company owns 100% equity in Blue Suede Networks, according to the PILOT application and term sheet.
Blue Suede Networks will oversee installation and operations for the Memphis fiber network. In 2023, one of the last proposals outgoing Memphis Mayor Jim Strickland did was establish the "Smart Memphis Fiber Initiative." The initiative included a right-for-proposal request; the bid was awarded to Blue Suede Networks.
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Neil Strebig is a journalist with The Commercial Appeal. He can be reached at neil.strebig@commercialappeal.com, 901-426-0679 or via X: @neilStrebig.
Jacob Wilt is a reporter for The Commercial Appeal. You can reach him at jacob.wilt@commercialappeal.com.
This article originally appeared on Memphis Commercial Appeal: High-speed internet in Memphis: The latest on fiber broadband project
