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:
This southwest Colorado community of about 17,000 contends with state barriers, but still makes the most of its fiber assets. We contacted Eric Pierson, Information Services Manager for the City of Durango, and Julie Brown, the City Finance Manager. The two shared some information on Durango's fiber network.
Currently, fifteen miles of City owned fiber run through town, providing connectivity for municipal and La Plata County facilities. Installation began in 1994 and the build-out continues. A combination of City capital improvement funds, grants from the State of Colorado Department of Local Affairs (DoLA), and funds from the Joint City/County Sales Tax fund have contributed to the $1.7 million network over the past twenty-one years.
Durango leases dark fiber to businesses and nonprofits to boost economic development and fund maintenance for the network. While dark fiber leasing could be far more lucrative, Durango's goal is to break even each year. According to Brown and Pierson, 2013 will yield about $10,000 to be shared with La Plata County and the Southwest Colorado Council of Governments.
Mercy Regional Medical Center partnered with Durango to install fiber as its primary bandwidth connection. Mercy is now an important anchor institution for a large medical office complex in what used to be an undeveloped area. In addition to the clinic, new businesses and residents continue to expand in the area.
According to Brown and Pierson, local ISPs that lease the fiber to serve residents and businesses have increased bandwidth for customers. A significant number of professionals that live in Durango work from home.
Even though Durango is not able to freely expand the network due to state restrictions that limit how it can use the fiber absent a costly referendum, community leaders found a way to optimize their network for residents and businesses. And should the state be wise enough to repeal this anti-competitive barrier, Durango will be well positioned to benefit local businesses.
The town of Erie, Colorado, is conducting a residential survey as it considers a community owned network. Erie has about 18,000 residents and straddles Boulder and Weld Counties.
The concerns facing Erie's community leaders were recently summed up in a John Aguilar article in the Boulder Daily Camera. According to the article, four companies were to be screened to complete a $50,000 feasibility study. The community owned broadband approach has both strong supporters and some doubters in town.
From the article:
Trustee Jonathan Hager, who has spent the last dozen years managing fiber-optic networks for a Westminster-based wholesale electric power supplier, championed the idea for Erie from both a local control perspective and an economic development one.
"If I'm a company and I'm going to relocate here with 100 employees and I need 100 megabits per second of speed and the town can provide that, I think that would be something I would look at," Hager said. "If we can make Erie stand out as a good place to live because we offer broadband, that puts us in a good position."
Internet access, he said, has become so ubiquitous and necessary that it could be seen as just another municipally provided utility, like water and electrical service.
"We can provide it ourselves and cut out the middle man," Hager said.
Those who are not sold on the idea of funding a study, express resignation at entering a challenging industry:
"I'm very sensitive to the speed of technology's progression," Mayor Joe Wilson said. "By the time we cut the ribbon on this technology, it's old news."
Wilson also voiced concerns about whether it is government's proper role to be providing broadband Internet service or whether that is better left up to the private sector. He said there hasn't been an outcry from residents to pursue such a service.
The completion of a residential survey can clarify how the community feels about local broadband connectivity and help leaders decide how to move forward. Surveys are a common tool as part of feasibility studies, but in our experience the most important question to answer at this phase is whether the community has a vision and clear sense of what would be gained by investing in their own network.
Apparently, Erie is considering several different models. Also from the article:
Options for Erie included building and controlling the whole network itself or partnering with a private company to build and operate the system. The town is planning to issue a community survey later this year, which will now include a question about what priority the establishment of a municipal broadband system takes.
We will be sure to look in on Erie for future developments.
We talked with Vince Jordan, LPC's Telecom Manager, who told us the expansion is part of their original business plan. Local establishments are ready to sign up with LPC. Twenty businesses put themselves in the queue within the past month. In addition to industrial and manufacturing companies, healthcare clinics, service industries, and entrepreneurs are waiting to get hooked up. Vince tells us several companies are looking to build data centers now that they will be able to get the bandwidth they need from LPC.
Vince credits LPC's ability to offer great local customer service as another driving factor for the early sign-ups. LPC is developing a fiber hood campaign to determine the locations for the first set of FTTH connections. The campaign, similar to that used by other communities and more recently by Google, will look at residential areas that are located near existing fiber and conduit. Surveys and early sign ups will identify seven fiber hoods.
Longmont's ordinance [PDF] requires customers to cover the cost of running fiber to their homes or businesses. Even though connecting can be pricey, Vince tells us potential customers call him regularly asking when they will be able to get fiber to their homes or establishments.
Many residential inquiries involve home based businesses, but not all. He relays the story of one retired gentleman who is so fed up with sorry service from the incumbents, he is willing to pay anything up to $10,000 to get LPC fiber to his home. We have encountered many instances of crappy customer service from the big boys, leaving us to suspect others share that sentiment.
The Longmont approach of having new subscribers pay for the connection dramatically reduces risk for the utility and should decrease the amount of time needed to break even on any investments. However, it may result in lower take rates than community owned networks that swallow those connection costs, amortizing the investment over a period of years. We are curious to see what lessons we can learn from this approach.
Free Press is hosting the next National Conference for Media Reform (NCMR) in Denver, April 5-7. Though the panels are not finalized, it is safe to assume that we will have a few on broadband and telecommunications policy. That's why I just registered for it and will undoubtedly be speaking on one or more sessions.
For a few more days, you can register for this conference at a remarkable rate - just $95 for the whole thing! Register here.
I always meet really inspiring people at NCMR and I expect this year to be one of the best. Denver is a great town and I expect people from Longmont to be there, talking about how they beat Comcast in a referendum where Comcast dropped $400,000 to protect its monopoly.
I can't overstate how much stronger our movement is when we come together to inspire each other and strategize face to face. I hope to see you there.
In our recent podcast interview with Vince Jordan of Longmont Power and Communications (LPC), we shared the story of Colorado's newest community network. Vince told the story of the community's struggle to overcome a massive misinformation campaign by Comcast and progress since. LPC is proving itself to be innovative, creative, and centered on community - all attributes that should drive their success.
We asked what future plans may be in the works for the expanding the network or the different potential services coming to residents and businesses, wondering if triple-play services may be offered. Vince noted that in LPC's current online survey, video and voice are two products that have sparked the public's interest. Because video can be one of the most expensive and least profitable ventures, LPC is once again approaching the community desires creatively.
LPC is looking into options for video and voice services that are accessible with a blazing broadband connection and plan to create a clearinghouse for customers on their website. Direct links and information on Hulu, Netflix, Roku, Skype, and other video and voice applications will all be in one place. The idea is to empower customers so they can use their inexpensive LPC Internet connection to stream video and voice. LPC is also exploring the possibility of establishing relationships with video and voice providers and providing access to serve the community.
The project is expected to go live in late October. LPC continues to research options for their customers but the idea has been received with positive community input. As we continue to monitor the evolving business models of community networks, we'll keep an eye on Longmont.
The tenth episode of the Community Broadband Bits podcast features Vince Jordan, Telecom Manager for Longmont Power and Communication in Colorado. We have long followed the trials and tribulations of this community as they fought through two referenda against Comcast's deep pockets. Now they are expanding their network to connect businesses and residents.
You can learn more about Longmont's approach on its website for the project. Our interview discusses some of the history behind the network, reflections on referenda, and the interesting approach Longmont has taken to avoid getting involved in the cable television business while still making sure everyone can view the content they want.
We want your feedback and suggestions for the show - please e-mail us or leave a comment below. Also, feel free to suggest other guests, topics, or questions you want us to address.
This show is 25 minutes long and can be played below on this page or subscribe via iTunes or via the tool of your choice using this feed. Search for us in iTunes and leave a positive comment!
Over the past few years, we provided continuing coverage as Longmont, Colorado, considered, and eventually approved, a referendum (two actually) to authorize the municipality to offer broadband services to local businesses and residents. The City installed the fiber as part of its electricity utility infrastructure long ago but Qwest then pushed a law through the state legislature limiting how it could be used. After two referendums and an expensive Comcast astroturf campaign, the residents supported Ballot Measure 2A in November, 2011. The City can now use the fiber network to spur economic development.
Longmont Power and Communications (LPC) recently held two meetings to field responses from the residents and local businesses. Results of the meetings, and an online survey, keep the community informed and will help decide several key elements to the roll-out plan. Scott Rochat of the TimesCall.com, reported on the July 16th meeting, focused on resident reaction. Longmont has some distinct advantages, that Jordan shared:
"We are unique in what we already have in place and what we can do with what we have in place," [Vince] Jordan, [LPC Telecom Manager] told a crowd of 43 at the Longmont Civic Center on Monday.
What's in place is an 18-mile fiber-optic loop that the city can now offer services on, thanks to a 2011 ballot issue. About 1,280 businesses sit within 500 feet of the fiber network; at least 1,100 homes already have the conduit and junction box that would let them join.
The meeting and the survey indicate a strong desire have the network up and functioning ASAP. From the article:
An online survey at ci.longmont.co.us/lpc/tc/index.htm (which so far has gotten about 152 responses) found that given the choice, 63 percent wanted citywide service "immediately," while 21 percent said they'd settle for whenever the city could get it done.
The proportions were similar at Monday's meeting: 57 percent for immediately, 17 percent for whenever it could be done, and another 17 percent for a two-year timespan.
"My feeling is, get it done, whatever it takes," said one man who voted for "whenever it can be done."
We spoke with Jordan, who mentioned a similar enthusiasm from the business community. On Friday, July 20th, LPC held a meeting to hear comments from potential business customers. Jordan said talks with local business leaders continue to uncover "more need, desire, and want for higher and higher broadband in the commercial sector." Tony Kindelspire of the TimesCall.com covered the meeting (reprinted here on TMCNet.com):
Nearly 1,300 Longmont businesses are within 500 feet of the city's existing fiber-optic lines, and they likely would be some of the first customers to lease that fiber, once Longmont Power & Communications gets the go-ahead from the City Council to begin leasing it.
The plan, currently being developed, should be presented to the City Council in August.
Jordan let us know that residents and businesses can take the online survey until August 10th, at which time the results will be tallied and posted online. Interim results will be posted within the next day or two.
"This is an exciting time," said Jordan, "Folks are very keen to move as quickly as the City can move."
For tourists and residents alike, much of Colorado is one amazing vista after the next. I nearly circumnavigated it on a recent trip and was re-blown away at how incrediblely beautiful it is (recommendation: stop by Great Sand Dunes National Park).
But those incredible mountains are a two-way street. The same ridges that make it great ski country make it awful wireless country. All those mountains make it hard to provide ubiquitous wireless access - leave the interstate or urban areas behind and you are lucky to see the old "1x" show up on your smartphone.
When I go on vacation, I like to remain connected to find weather reports, directions to my next destination, local cafes, etc. And like just about everyone, I really like to be connected where I live. The private telecom sector gets a failing grade for serving both residents and vacationers.
Wendell Pryor, director of the Chaffee County Economic Development Corp., testified to the impacts of limited bandwidth on businesses in that area.
Princeton Hot Springs Resort, an economic driver that generates the second-highest amount of sales tax among businesses in Chaffee County, is unable to process credit cards electronically when bandwidth traffic is high.
"The broadband is simply not sufficient to allow them to do that, so it's done manually," Pryor said.
He said Monarch Ski Resort, which anchors the winter tourist season in Chaffee County, asks the staff to shut off their computers in order to have adequate broadband availability for skiers and customers.
Meanwhile, it appears that CenturyLink and other providers are trying to water down the bill. As we have seen elsewhere, the big DSL companies want to define broadband at ludicrously low speeds to hide the fact that they are crippling local businesses by refusing to provide modern services.
Government Technologyoffers a deeper explanation of the bill, along with my thought that this bill is better than what most states are doing because most states are either doing nothing or narrowing the options for communities by creating barriers to community networks.
An original goal of the bill was to identify both those areas lacking in broadband access as defined by the FCC and those areas lacking in competitive access to such broadband (probably the vast majority of the state). But the competition aspect was dropped in committee - probably a friendly gesture to CenturyLink and others who pretend broadband has a lot of competition but hasten to stop anyone from actually examining it.
If the bill passes in current form, it would also develop an inventory of state-owned broadband assets -- something every state should probably develop.
This bill does not address public ownership or community networks but the discussions around it are relevant. Even though big corporations like CenturyLink try to cast publicly owned networks as a public v. private affair, the article reminds us that this issue is really everyone v. a few very big cable and DSL companies:
Colorado Counties Inc. (CCI), which represents county interests in the state, supports SB 12-129. Andy Karsian, the organization’s legislative coordinator, said various rural counties have had opportunities to attract employers, but they couldn’t seal the deal -- primarily due to a lack of high-speed connectivity those potential businesses require.
If CenturyLink were meeting local needs and allowing local businesses to thrive, communities would not be examining their capacity to build their own networks.
My greatest fear with the Colorado bill is that we will get another Advisory Panel or Task Force or some official body that will get nothing done because representatives of CenturyLink or Comcast or other big companies that benefit from the status quo will deadlock it. As I told GovTech,
“Unfortunately these advisory panels often end up stacked with representatives from DSL and cable companies that prefer the status quo until they can devise a scheme for the public to funnel more subsidies their way,” Mitchell said. “I hope that will not be the case in Colorado.”
Photo of Colorado's incredible mountains used under creative commons license, courtesy of Hogs555.
Of course there is the argument that government should stay out of the way when it comes to broadband. Sometimes it is easy to forget how much the private industry benefits when government steps in to provide or facilitate basic infrastructure. Private industry benefits tremendously from our road systems, reliable power infrastructure, clean water, sewer systems and public safety. A robust, ubiquitous high-speed broadband infrastructure will facilitate interactions between businesses, allows private industry to deliver new and innovative services to customers and allows employees to be productive where ever they are at.