Opponents of municipal broadband initiatives contend that public broadband projects are “failures” if they do generate “profits” in the amounts, and within the short time periods, that investors and the financial community expect of private corporations. To define success this way is to miss two fundamental points: (1) public entities have fundamentally different ways of creating economic benefits for the community than the private sector; and (2) municipalities often undertake a public communications initiative precisely because the project would not be profitable enough for a private company.
Dark Fiber Paying Off in Florida's Lakeland
Near the center of Florida sits Lakeland, the largest city between Orlando and Tampa with 98,000 residents. The area boasts 38 lakes, citrus crops, and a growing healthcare industry. Lakeland also owns a fiber optic network serving education, business, and government. To learn more, we spoke with Paul Meyer,
Lakeland Electric City of Lakeland Fiber Optics Supervisor.
The city's municipal electric company, Lakeland Electric, began generating and providing electricity to customers in its service territory in 1904. In the mid 1990s, the utility began replacing older copper connections between substations with fiber-optic cable. Soon after, the Polk County School District asked Lakeland Electric to connect school facilities via the fiber network for video transmissions. By 1997, almost 50 school facilities were connected to each other via using dark fiber provided by Lakeland Electric. In 1994, the District paid
$219,582 $84,737 to the utility to design, construct, and install equipment for video connections in four schools. The school received an indefeasible right of use for two fibers for twenty years. over which Verizon delivers data and voice services to the School District on its own lines.
Meyer noted that the fiber project likely cost more than the school paid but the installation gave them the opportunity to expand the network. Further expansion connected the police department, libraries, and water facilities. Over time, the electric utility has incrementally expanded to every building engaged in city business. The network is aerial, using the utility's own poles to mount the fiber.
Like a few other communities on our map, including Martin County Florida, Lakeland took advantage of the opportunity to expand when the state's Intelligent Transportation System expanded in the area. In 2003, the State of Florida funded fiber expansion to 177 additional intersections in Lakeland. The State and Lakeland Electric entered a 20 year dark fiber lease to serve the system at the new intersections. The expanded backbone allowed the utility to build out the network even farther.
Lakeland Electric soon began leasing dark fiber to its largest customer, Lakeland Regional Medical Center. Meyers also notes that associated clinics and healthcare facilities within the geographic area of the hospital connect to the network. The hospital's personnel manage its own network so costs are predictable and information systems talent is onsite.
Meyers estimates the hospital system would pay $5,000 - $6,000 per month at each location for managed services from Verizon. Now, the hospital pays significantly less at $100 per fiber, per mile, per month to lease dark fiber from the City. The hospital uses 10 gig connections between facilities for advanced telehealth applications.
Colo5, offering colocation services, disaster recovery, and cloud services, is expanding to Lakeland and will be connected via Lakeland Electric. The company has recently finished constructing a secure building and will serve a number of customers, including Level 3, TW Telecom, Verizon, Fiberlight, and Brighthouse in the Lakeland facility.
Meyer says dark fiber leasing provides about $225,000 per year in revenue to the general fund though he declines to estimate how much the municipal government saves by using its own infrastructure instead of leasing from Verizon or some other provider.
Recent articles from the Ledger.com also report Lakeland is a final candidate for the next Amazon distribution warehouse. While tax incentives will be part of the allure, the presence of Lakeland's dark fiber will also have a role in the decision. The Ledger reports the online seller will bring 248 - 385 jobs with a new fulfillment center.
Meyer also tells us that the State is currently constructing its new Florida Polytechnic University in Lakeland, which is scheduled to open in the fall of 2014. Lakeland Electric's fiber network runs to the location of the future campus and the utility hopes to provide communications infastructructure.
Update: Paul Meyer contacted us to share more detail on the arrangement between the City and the Polk County School District. In addition to the original agreement, the two have entered into several other agreements over the past 20 years. To date, the City of Lakeland has connected 45 Polk County Schools with dark fiber for a total of $1,173,337. The agreements are for the life of the fiber, 20-25 years.