Featured, Municipal Broadband, Original Report, Sherrie Peif

Greeley exploring options for broadband service that could include TV and phone service

*Editor’s note: This story has been changed from its original publication to reflect a change in who is conducting a presentation at the next meeting and the city’s plans to use its water utility to back the project. Brian Sullivan, the city’s interim IT Director said a reference to building out the fiber network using the water utility was misunderstood. One company interviewed, Foresite, wants to run its fiber within the water sewer lines.

“This has some merit, but then you get into the issue of management of the telecommunication utility lines that are now attached to the water/sewer utility,” Sullivan said. “Not something, I believe, we would want to work around. But this wasn’t a bonding issue to the water utility. The funding would have to be done on its own, without the backing from any of our current utility enterprise funds. This is a challenge for Greeley as it relates to the potential bond rating if we decide to move forward with any significant investment request.”

GREELEY — Longmont may have been the first city in Colorado to offer 1 Gigabyte fiber optic broadband to all of its residents, but Greeley may become the first to add to that and offer residents TV and voice services as well.

Although there is nothing official, and the city is only in its initial stages of investigating the idea, one of the companies interested in partnering with Greeley has made its name in Nebraska for expanding on the newest fad of municipal broadband services.

In November 2017, Greeley residents voted to allow the city to consider offering broadband in competition with private corporations such as Comcast and Century Link. In May 2018, the city paid NEO Connect $50,000 to study the viability of such a plan.

Now, the city is working with Vantage Point Solutions out of South Dakota to put an initial proposal together. Greeley has also organized a 10-15-member citizen’s committee to study the process further. The committee, which met for the second time last week, will eventually take recommendations back to city council that may include everything from the extent of service to possible partners to how it could be financed.

To date, communities that have started or are starting their own broadband utility have issued utility enterprise bonds, using already existing municipal electric utilities to back the financing. Longmont initially financed $45 million, borrowing an additional $7 million in voter-approved bonds. Fort Collins has issued $145 million in voter-approved bonds, and Loveland recently took on $95 million in debt without asking the voters.

There are many questions surrounding the risk and viability of city-operated broadband services, but Greeley intends to ask voters in 2020 if they are willing to take on that risk for what the city claims will be improved community connectivity and an economic development boost for business. This is despite Longmont being unable to point to any businesses locating there because of the broadband.

Greeley does not have its own electric utility; therefore, financing a project this size requires other options, including partnering with other broadband companies that are willing to invest in the risk of laying millions of dollars in infrastructure that would operate the network.

At the recent citizen task force meeting, members got a 30,000-foot view from Lori Sherwood, the project manager on the $275,000 contract with Vantage Point, on what has been done to date.

Possible recommendations included three different options:

  1. Building a network that would connect its anchor institutions, such as schools, hospitals, and government.
  2. Building a citywide fiber-optic network similar to Longmont that would be owned and operated by the city. It would need to be financed through utility enterprise bonds.
  3. Entering into a public-private partnership that would share both the risk and the cost with a current private provider.

There are also three different ways the city could manage the network.

  1. Publicly owned and operated — The city takes all the risk and pays for all the cost of implementation. Millions in utility bonds would be issued. Publicly owned and Privately operated — The city would own the infrastructure but lease it to a private company to manage.
  2. A hybrid model of the first two including a public-private partnership.

Four companies have shown an interest in partnering in some fashion with the city.

  1. Allo Communications out of Nebraska
  2. RG Fiber out of Kansas
  3. Nunn Telephone
  4. Comcast

Sherwood called Greeley a place that “made sense” for Allo. She noted that what the city’s investment would entail was still unknown, but pointed out that Allo called Greeley’s size a “sweet point,” for the company. Currently, Lincoln, NE is the largest city Allo has wired, with about 230,000 in population.

She pointed out that Allo could provide voice, video and broadband, something that no other city in Colorado has attempted.  Critics have said sticking only to internet service makes city-owned broadband less desirable because it requires consumers either cut the cord from cable TV or get their other services from multiple providers.

Sherwood also noted that Allo was named in the top 10 of fastest Internet Service Providers by PC magazine, a distinction normally given to larger more nationally known companies. All but two communities Allo has contracted with have been in Nebraska; Breckenridge and Fort Morgan in Colorado are the other two.

Other positive aspects of Allo, according to Sherwood, are that it can provide 100 percent coverage of broadband to all of Greeley and is open to negotiation on the model type

RG Fiber would want the city to put in conduit only and RG would put in the fiber and manage the plan. Nunn Telephone was interested only in the middle-mile model connecting anchor institutions and would use city fiber to connect to cell towers. And Comcast, which Sherwood seemed the least interested in, said they already reach 95 percent of Greeley residents, already offer 1 gig service at $70 month and would want the city to market them. The city has planned to also meet with Century Link, but had not done so to date.

Two other companies, Fujitsu and Foresite Group have met to discuss how they could help the city if it became the owner and operator of the network.

Michelle Kempema, executive director of the Colorado Model Railroad Museum in downtown Greeley, joined the task force because she grew frustrated when she tried to increase the museum’s internet speed with Comcast for a special project.

Comcast gave her two options, either pay more than $20,000 as a one-time expense to build the infrastructure needed and keep her current $100-plus monthly charge, or increase the monthly cost to $350 and sign a six-year contract. Kempema wants more information on the city-wide option to see if that can be an answer for other businesses, that like her own need faster service. But she also said there are many questions that need answering between now and then.

By comparison, Longmont’s business internet also requires a contract and costs between $700 and $1,000 per month based on what type of service the business needs.

The next meeting is scheduled for July 25. Uptown Services will give a presentation on need and Brian Sullivan, the interim IT director for the city will give an update on focus groups the city has conducted on the topic.

 

 

 

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