Our regular readers know that Comcast succeeded in defeating the Longmont measure in 2009 but the electoral would not be swayed by false promises and lies the second time in 2011. This year's proposal asked voters to approve a revenue bond for $45.3 million to speed up a planned expansion, which voters approved 2:1.
Contrary to past experience, Comcast and allies did not launch a full frontal assault in Longmont this year to sway the vote. Fung's article looks at the math for a possible explanation:
There are 27,000 households in Longmont. Even if the city were to connect all of the eligible homes [close to the fiber ring] to its existing fiber network overnight, it would still reach only 1,100 residences. Cable companies therefore spent over half a million dollars [in 2011] trying to prevent four percent of city households from gaining access to municipal fiber on any reasonable timescale. That's around $600 a home, or six months' worth of Xfinity Triple Play.
Even if the cable companies decide it was not worth the fight in Longmont, they have shown repeatedly that they have cash, will travel. Feung's article describes another 2009 election in which the cable industry spent large to prevent public investment in fiber:
In North St. Paul, Minn., a 2009 ballot measure to let muni fiber move forward was defeated by a resounding 34-point margin. Opposition to the fledgling network, PolarNet, was led by the Minnesota Cable Communications Association. In the weeks leading up to the vote, it and other opposition groups spent some $40,000 campaigning against the measure. MCCA alone contributed more than $15,000 to the effort over the same period.
Comcast also exhibits its willingness to spend money to seat industry-friendly candidates. We reported on coverage in Seattle where Comcast contributed heavily to Sen. Ed Murray who won the Mayoral race. Outgoing Mayor Mike McGinn's policy initiative to bring better Internet access to the community threatened Comcast's position. Comcast denies it, but speculation abounds that McGinn's position on broadband motivated Comcast's direct and PAC contributions to Murray.
From the Fung article:
But what Longmont's experience does show is how large the gulf is between an incumbent industry that can spend money on a massive scale to promote its interests and advocates of municipal fiber that often lack deep-pocketed allies. Those odds made the triumph of Longmont's municipal fiber backers all the more remarkable.
2B's passage means approval for the city to issue $45.3 million in bonds to build out the city's 17-mile fiber optic loop within three years.
Longmont Power & Communications has estimated that the payback time on the bond will be 11 years. If revenues from commercial and residential customers fall short, LPC's electric service revenues will be used to make up the shortfall, LPC staffers have told the Longmont City Council.
In Seattle, the mayor that campaigned on a citywide fiber network and backed off it but created a partnership with Gigabit Squared to bring gigabit fiber to 12 neighborhoods lost in his bid for reelection to the candidate that that was strongly supported with Comcast donations. However, the election does not appear to have turned on broadband issues:
McGinn’s fate was forecast two years ago, when voters slapped back his efforts to obstruct the Highway 99 tunnel project, opting to move ahead with the long-debated project. McGinn’s anti-tunnel agitating was viewed as a reversal from his 2009 election-eve pledge not to stand in the project’s way.
We continue to be disappointed in the lack of serious discussion in many races about how local governments can make meaningful improvements in Internet access for residents and businesses. We most recently covered the Seattle story here.
And finally, the disappointing news from Iowa. Though Emmetsburg received majority approval for its bond issue to build a fiber network, the 54% fell short of the 60% required for a general obligation bond. They planned to finance the investment with both a revenue bond and a general obligation bond. They will continue to seek opportunities to build the network despite this temporary setback.
November 5th probably seems like deja vu for the people of Longmont, Colorado. For the third time, the voters will respond to a ballot question that will impact their community's connectivity. Past referendums addressed whether or not the community could use its fiber ring for connecting businesses and residents.
They now have that authority. This year the question will be "when?"
Local incumbent providers grossly outspent municipal network supporters in 2009 and in 2011 with astroturf campaigns against referendums. Nevertheless, voters decided in 2011 to grant the local utility permission to use existing fiber resources to bring connectivity to businesses and residents.
Since then, Longmont Power and Communications (LPC) began a slow build-out of fiber to businesses and homes within 500 feet of the existing loop. Local businesses, frustrated with poor service from Comcast and CenturyLink, jumped at the opportunity to have real high-speed connections. With a long list of businesses in queue for their connections, the City Council voted to use LPC reserve funds to connect businesses and residents to the loop. Clearly, the people of Longmont were ready for something better than the existing incumbent services.
Local blogger Steve Elliott connected to the service in September. To satisfy his curiosity, he ran speed tests immediately before and after he transitioned from Comcast service.
Comcast timed in at 26.08 Mbpsdownload and 5.76 Mbps upload. LPC provided 89.99 Mbps download and 62.01 Mbps upload.
I also timed downloading movies on Netflix on my TV. Before, I could run upstairs, get an adult beverage and be back in my chair before the movie loaded. Now – if it takes 10 seconds – it’s a really long movie.
After a month with LPC fiber and new computer system, Elliott ran more speed tests. Results topped out at 739.66 Mbps download and 534.75 upload for LPC Fiber.
Elliott is not the only Longmont resident who wants to connect to LPC fiber. Calls to "get it done" from residents and businesses did not fall on deaf ears at the May Longmont City Council meeting. The Council voted unanimously to bring fiber to every resident and business that wants it. Next, community leaders and LPC investigated financing. The reserve fund, developed from years of dark fiber lease revenue, could pay for the expansion but the project would drag out over a decade.
Rather than see the project finished in more than ten years, the community can become entirely connected within three years with a $44 million revenue bond issue. LPC will use $35.4 million as capital to build out the network and the remaining as reserve for debt-service. State legislation sponsored by USWest from 2005 imposed the referendum requirement on local communities; the voters must decide. USWest became Qwest became CenturyLink.
"Without raising taxes, shall city of Longmont debt be increased in an amount not to exceed $45,300,000 by the issuance of revenue bonds for the purpose of financing fiber optic system capital improvements to provide high-speed broadband service, including but not limited to internet, voice and video services; and shall the bonds be paid solely from the city's electric and broadband utility enterprise revenues and be sold in one series or more at a price above, below or equal to the principal amount of such Bonds and with such terms and conditions, including provisions for redemption prior to maturity with or without payment of a premium of not more than 3%, as the city council may determine?"
Unlike past referendums, gigantic telecom providers have not spent large amounts of cash to fuel misinformation campaigns this time. Local citizen group, Friends of Fiber, is prepared to face-off against Comcast and CenturyLink. From a Times-Call article:
"It's as baffling to us as it is to you," said Scott Converse of the pro-2B group Friends of Fiber, which had been expecting to see another large push by the telecom companies. So far, he said, the only "anti" activity anyone in the group had seen was a telephone poll in September by Frederick Poll, a Virginia-based firm.
"We're wondering if maybe there's going to be a push near the end," Converse said. "I can't imagine why they're waiting."
The silence is welcome but a little eerie.
The City provides a PDF brochure on Ballot Question 2B that addresses many common questions. For more about the measure and the benefits springing from the network, listen to Chris' interviews with LPC's Vince Jordan. In the Broadband Bits podcast, Episode #10, Jordan describes the challenges LPC Fiber faced. Episode #68 deals with the upcoming referendum. Chris talks with Jordan and George Oliver from Friends of Fiber.
We have been providing our own electricity for more than 100 years and our rates are among the lowest in the nation. The same will be true if we expand our own fiber network. Because Longmont Power & Communications is a not-for-profit agency of the city, our low rates and network availability will help to retain and attract businesses to our city. This is the kind of visionary investment that will pay big dividends down the road.
Longmont Power and Communications, a city-owned utility north of Denver in Colorado, is slowly rolling out a FTTH network to local businesses and residents that are in close proximity to its existing fiber loop. They are offering a symmetrical gigabit of Internet access for just $50/month.
Jurey said the city's network is three times faster than the speeds the clinic got before at a cost savings of $1,600 a month.
On November 5, citizens will decide a referendum on whether to expedite the building by issuing revenue bonds without increasing local taxes. A brochure explaining pro and con is available here [pdf]. Approving the bonds means building the network to everyone in a few years while not approving it will mean building the network over several decades.
We recently did a podcast with Longmont Power and Communications Broadband Services Manager Vince Jordan and a local citizen campaigning for the referendum. Listen to that show here.
As Longmont prepares to vote on November 5, we are paying special attention to question 2B, which will authorize the city utility to issue revenue bonds to finance the FTTH network already being built. The successful referendum from 2011 gave the City authority to build the network and this referendum, if successful, will finance a rapid expansion rather than the present incremental approach that will take decades.
We have a double interview today, with Vince Jordan rejoining the show from Longmont Power and Communications. He previously spoke with us on episode 10 but today he just gives us the facts about the network and scenarios of what will happen depending on how the city votes.
The second interview is with George Oliver, co-founder of the grassroots group Friends of Fiber that is advocating for people to vote yes on question 2B. George explains the benefits of passing this debt, namely that area residents and businesses will gain access to a world class networks without increasing any taxes.
Longmont's City Council and municipal power and communications utility are getting serious about bringing fiber to the people. We reported earlier this month about the decision to allow voters to decide how fast they want that next generation network. Longmont Power and Communications (LPC) already plan to expand the existing network to households and businesses but face a long, slow time table over many years if they expand incrementally without bonding. The City Council will ask voters if they will authorize a $44 million bond issue to pay for capital costs, interest and debt-service reserve.
Many in Longmont recall the ferocious opposition they faced during the two previous referendums. The cable industry (mostly Comcast) spent hundreds of thousands of dollars during each campaign, saturating citizens with a deceitful advertising campaign.
Once again, local citizens are forming their own group to support the measure. A Scott Rochat Longmont Times-Call article reports that the group, Friends of Fiber, recently met in Longmont's TinkerMill "hackserspace" to plan initial strategy. The main take-away for participants was "we need more people."
The group does not want to be taken by surprise by the same astroturf groups that spent $250,000 dollars to defeat the referendum question in 2009. While a second referendum passed in 2011 despite even more astroturf spending, Friends of Fiber are taking no chances and mobilizing now. Both of those referenda dealt with the authority to operate the network, not finance an expansion.
From the article:
[Organizer Scott] Converse said the group had to be ready for just as big a fight now. One tactic will be borrowed from the national political campaigns; creating software that will scan the Internet for negative references to the bond issue so that the group can respond quickly.
Vince Jordan, LPC Telecom Manager, note that the utility has updated the original service offering from $59.95 for 25 Mbps to $49.95 for residential 1 gig service. From the meeting:
"I'll be a guinea pig," one man in the crowd said to chuckles as he asked to be connected. "I'll dig the trench if you'll let me."
The Longmont community will soon have the chance to decide how quickly they want ubiquitous FTTH. On July 23rd, the City Council unanimously approved a proposal to ask voters in a referendum if they want to bond for funds to speed up construction of the LPC fiber network. Absent bond financing, the network will expand much more slowly over many years.
Readers will remember the 2011 referendum to allow the electric utility to offer broadband services to the people and businesses of Longmont. At the time, Comcast spent over $300,000 via the Colorado Cable Telecommunications Association to fund an unsuccessful Vote No astroturf campaign. The community approved the measure with 60% of the vote. There was an earlier referendum in 2009 that ended in a victory for Comcast following a successful astroturf campaign. Records showed a similar infusion of cash to sway the vote.
In the recent meeting, some Council Members expressed concern over the city bonding to invest in the telecom business. The Longmont Times Call reported on the meeting:
"We're again a government playing in the private world of capitalism," [Councilman Brian] Bagley said. "What if we don't know what we're doing?"
City Manager Harold Dominguez noted that even if voters approved a bond, the city could still take on a partner. If it passes, he said, the city would have a pretty good idea of how big a piece of the market it could get. And implementation wasn't a huge risk, he said, because the city already knew it could provide the service; it had been doing so for itself, the school district and a few other large users for years.
"Based on the information we've received, yes, we can do it," Dominguez said.
Finance Director Jim Golden outlined several options, including sales tax bonds, utility bonds, and certificates of participation, which use existing city assets as collateral. After discussion, Council agreed that the revenue bonds from the electric utility was the best option. If the voters approve the referendum, the City will bond a total of $44 million for capital costs ($35.4 million), interest, and debt-service reserve.
Plans are already set to bring FTTH to all of Longmont, the referendum will determine when residents can expect to connect to LPC. Councilman Gabe Santos commented:
With or without the bonding, he said, the voters had already given the city permission to get to work.
"If it doesn't pass, we're still going to roll it out," he said. "It's just going to take a long time. We have established the right to do this."
You can watch the archived video of the July 23rd meeting from the City website. The Council took up several issues that night which are listed on the Index. Broadband financing was item D of General Business. Click on the heading and the video will jump to the discussion.
Longmont, Colorado, kept its eye on the prize. City leaders' vision, to bring high-speed connectivity to residents, businesses, schools, libraries, and government facilities began many years ago and the community faced multiple challenges. Citizens knocked down legislative barriers through referendum, fought corporate misinformation campaigns, and contended with tough economic times. Throughout the ordeal, community leaders held fast and now the vision is becoming a reality.
Current Mayor Dennis Combs inherited the project but he understands what the vision will bring to the community. In a recent article in the Boulder County Business Report, Combs focuses on economic development, education, and lifestyle as primary driving factors and says:
These are just a few reasons why it’s important for Longmont to realize its vision of being a connected city. If the city moves forward and deploys this network, it will join a number of elite communities around the country where citizens can work, learn, and live using the latest technologies available.
After ample opportunity to invest in the network Longmont residents and businesses asked for, Comcast chose to spend significant resources repeatedly trying to block a municipal network.
Fortunately, Combs and previous leadership took action to fix the lack of connectivity rather wait forever for two providers that did not want to invest in the community. Longmont's vision would never be this close to reality without leaders and citizens who chose a path of local self-reliance.
Longmont, Colorado, will move ahead with plans to offer fiber connectivity to the entire community. After presenting this business plan to the City Council, members voted unanimously on May 14th to support the measure. Scott Rochat from the Times-Call attended the meeting.
Residents stepped forward to express their opinions and all but one urged the council to "get it done."
The plan projects a four-tier price structure. For residential rates, that's proposed to range from $39.95 a month for 10 megabit-per-second upload and download, to $99.95 for 100 mbps.
The study estimates that 35 percent of homes would choose to get their Internet service from the city, still leaving plenty of the field for the existing providers.
"Competition is good," Councilman Alex Sammoury said. "Just because we're a government entity doesn't mean the free market doesn't apply to us. If someone can do it better, more power to them."
The plan proposes to have the city provide Internet directly and work with a private partner for phone service.
Video service would not be provided, Roiniotis and the Uptown consultants said, because Internet video has eroded the market for traditional television.
Vince Jordan, LPC Manager, began the presentation and stressed economic development, education, and lifestyle.
Representatives from Uptown Services reviewed recommendations and the business plan. They answered about 3 hours of questions from council members, including skeptical members who want to avoid becoming the next Provo, Utah. Neil Shaw and Dave Stockton from Uptown Services provided some perspective between the two communities. They pointed out the large number of successful networks in states across the country.
Longmont had been prepared to incrementally expand the network using the cash on hand from the many years of dark fiber leasing. Such an expansion could be done without borrowing but would take a long time (more than ten years, likely) to get to everyone. This is the approach Danville, Virginia, has been using.
Instead, Longmont is now developing a plan to finance the rollout of the network to everyone over a few years, estimated to cost $41 million. A future discussion will examine whatever financing strategy is recommended and approve it before it can move forward.
To view the discussion, zoom ahead to about 14 minutes in to the video below.
In January, Longmont Power and Communications (LPC) announced they would begin connecting businesses located within 500 feet of the existing network. As we reported, local businesses were chomping at the bit to get hooked up and enjoy the high-speed next generation network. Even without efforts at marketing or advertising, more businesses have added themselves to the queue. LPC will present the formal business plan for expanding the network to the City Council on May 14th. Tony Kindelspire recently reported on the race to get on LPC's network in the Longmont Times-Call:
"We are bringing to council a business plan to build out all of Longmont," [Vince] Jordan, [Broadband Services Manager], said. "It's the whole enchilada."
The fact that there has so far been only limited rollout is due to economics. Currently, the installations are being paid for from a reserve fund that Longmont Power has built up over the years leasing portions of its fiber-optic loop to entities such as Longmont United Hospital and a third-party provider that services the school district. Those leases bring in about $250,000 annually, Jordan said.
For 2013, the Longmont City Council authorized LPC to use $375,000 of that reserve fund to begin connecting businesses and residents to the loop.
This model works, but does not connect everyone fast enough for their liking:
To expedite the build-out, extra up-front dollars will have to be allocated, but where those dollars will come from is yet to be determined, Jordan said, adding that ultimately, the decision will lie with City Council.
Right now, Longmont will cover the initial cost of connecting subscribers except in cases of extraordinarily high cost cases. If it would cost $10,000 to install but the payback to the utility in 2.5 years is only $6,000, a customer would have to cover the $4,000 difference presently. While there are over 1,300 businesses with in 500 feet of the network, connection costs vary depending on proximity to roads, structures, and geography.
Jordan notes LPC's first priority is to boost economic development:
"We're really focused on economic development, so the ones that will put the most dollars (they save on broadband costs) back into their business, those are the ones we're working with first."
Businesses and organizations that are on the network appreciate fast symmetrical service, affordability, and the fact that they get service from the city rather than a commercial provider:
"I emailed Vince asking when I could get on," said Michael Jurey, network/telecommunication specialist for Longmont Clinic. "Luckily, the loop ran right by Longmont Clinic. On our side of the street no less."
Jurey said the city's network is three times faster than the speeds the clinic got before at a cost savings of $1,600 a month.
"We use it for two reasons," said one of the other three owners [of the Pumphouse, a restaurant and brewpub in Longmont], Dave D'Epagnier. "No. 1 is our business functions -- we process credit cards with it ... just normal day-to-day business activities. Plus, it's a big place, and we could have 50 customers that are using the broadband all at once."
The other thing that attracted him and the other owners was that the business was finally able to tap into the city-owned network after so many years of having to buy high-speed service from a commercial provider. And that is all thanks to the voters, D'Epagnier said.
According to a Scott Rochat article in the Times-Call, the business plan for a FTTH network to anyone in town is possible within three years with a $41 million investment. That plan eliminates the usual $500 - $15,000 hook-up fee:
"We have to be competitive," said Tom Roiniotis, director of LPC. "None of the incumbents charge an install fee, so we won't as well."
Uptown Services prepared the business plan and included residential fees from $39.95 for 10 Mbps to $99.95 for 100 Mbps for Internet. Residential Internet would be symmetrical. Business rates would range from $49.95 for 20 Mbps/5 Mbps to $499.95 for 250 Mbps symmetrical.
If LPC wants to pursue a triple play offering, Uptown estimates it would cost another $6 million. At this point, LPC does not consider triple play a good investment:
"The young generation that's active now, they don't watch TV in the conventional way," Jordan said. At a recent presentation, he said, when he asked a college student how often he watched traditional scheduled TV programming, the response was "Never."
According to a survey conducted for the business plan, about 68 percent of respondents said they would either definitely or probably switch to the city for Internet service if it were cheaper than existing services. Only about 20 percent said they had a "triple play" or wanted it.
Uptown's estimates were based on a take rate of 35% and the business plan estimates a broadband utility to be in the black within four years and to pay for itself in ten years.
Possible funding mechanisms include:
Certificates of participation, using city property as collateral
A bond issue backed by sales tax
A bond issue backed by electrical revenue
If the city council considers the plan favorable, it will go to the city finance department for more detailed review.
Here is a quick video from LPC, as technicians install connections at the Pumphouse:
Do not be fooled — this debate is not between “purely” private companies and municipal governments; it is between heavily-subsidized beneficiaries of governmental handouts on one side and locally-elected and openly accountable public servants on the other.