Fort Collins voters will likely decide in November whether the city should get into the business of providing high-speed internet service.
City Council members have directed staff to continue working on a project aimed at making competitively priced 1 gigabit-per-second, or gbps, internet speed available to every residence and business in Fort Collins.
Providing access to a broadband network as a city service would require expanding the Light and Power Utility to provide telecommunications services. Voters would have to approve amending the city charter to change the utility.
Ballot language is expected to be crafted over the summer. It’s likely to include a request to use municipal bonds to finance construction of a fiber optic network.
The model for the municipal broadband service currently supported by the majority of council members is a “retail” approach that would have the city build and operate a network.
Building a network would cost an estimated $125 million to $140 million. The network would cover the entire city as well as its growth management area, which is land expected to be eventually annexed into the city.
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While favoring a business model that would give the city control over the network, council also directed staff to continue seeking a partnership with an established broadband provider in hopes of limiting the city’s financial risk.
During a recent council discussion on broadband, Councilmember Ross Cunniff said a partnership would have to deliver the benefits a retail model promises consumers — high speed, reliability, accountability, low cost and accessibility throughout the community.
The city’s risk in a partnership would be losing control over the system and customer service, he said.
Fort Collins should be poised to react quickly to market changes, just like a business, Cunniff said. He said residents are eager for the city to get involved in internet services.
“When I talk to citizens, really the main question on their minds isn’t should we, it’s ‘Why haven’t you gotten around to doing it yet?’” he said. “I think it’s time for us to get around to doing it.”
City staff have traveled the country studying the approaches other municipalities have taken to deliver broadband services. Municipal systems and their pricing structures vary, with some systems following a retail model and others using third-party providers.
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Councilmember Ken Summers questioned the value of the city competing against private companies that provide internet services, along with the ultimate cost to ratepayers of creating a new utility.
“Why is there a sense of urgency that it has to be done in 2017 or 2018?” he said.
Deputy City Manager Jeff Mihelich said the city doesn’t want to fall behind other communities as they move on providing internet services.
Residents and businesses eventually are going to want 1 gbps or faster speeds that can be provided through fiber because their electronic devices will require high speeds, he said.
“We think right now is the time to get in, get the fiber in place, to build the system and future-proof it so that way, when the speeds increase over time, it will be right for it,” he said.
Fiber is likely to be a viable technology for at least the next 30 years, Mihelich said.
The city was on track to form a partnership with Axia, a Canadian company that has built fiber networks around the world. But the potential deal fell through when Axia’s parent company, an investment firm, decided it didn’t want to enter the U.S. market.
City officials will continue to meet with service providers such as Comcast and CenturyLink to explore the possibilities for partnerships, said Chief Financial Officer Mike Beckstead.
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While the telecommunications giants already have fiber in Fort Collins and plan to place more, they will not commit to when that will happen or to covering the entire growth management area, he said.
Jon Lehmann, senior director of government and regulatory affairs for Comcast, stated in a letter to city officials the company plans to spend $30 million to bring more fiber to Fort Collins in the next year or so.
He also noted the city’s assessment of why the Axia deal fell through, including the strength of telecommunication companies in the United States.
“Also, as many of you know, Google announced some time ago it is no longer investing in new fiber infrastructure and systems,” Lehmann stated. “With two multi-million/multi-billion dollar companies pulling out of the fiber infrastructure business, is there something the city of Fort Collins knows about this competitive environment that they do not?”