GREELEY — If Greeley starting its own broadband service relied solely on the results of recent focus groups organized by the city, it’s future looks bleak.
Focus groups designed to get feedback concerning whether Greeley should follow other Northern Colorado communities into the broadband business came back with mixed reviews, with many saying their current service is fine and that selling it to voters will be tough.
They encouraged marketing the service to voters as a way for Greeley to keep up with the communities around it rather than as a need. However, Greeley faces an uphill battle to finance the $140 million project, and the risk maybe just too much for the city to take on.
Uptown Services was hired by the city to conduct interviews with what they refer to as “anchor” institutions, while Deep Blue Insight held focus groups with residents and business owners and community leaders. Both companies gathered information concerning public perception and needs about internet services.
Currently, Greeley residents get their internet from several private companies including Century Link and Comcast. In 2017, Greeley residents voted to opt-out of a Colorado law that prohibits municipalities from providing internet services so that city staff could explore the idea.
Although the city publicly says it’s only in its initial stages of investigating the idea, it continues to move closer to a deal that could cost Greeley residents as much as $140 million to put the infrastructure in place that would compete with the private sector, including already laying what is known as the middle mile or the trunk of the fiber needed to branch out to the subscriber.
At least one focus group came to the conclusion that the most viable option for city-owned broadband would be to market it as support for “a progressive, growth-oriented project (that) reflects a “what’s in it for Greeley” (attitude) versus simply improving one’s internet connection.”
Municipal broadband has not proven to be successful, with most communities still in the honeymoon phase. Longmont’s NextLight is the most looked at source for an example, but it too has had its issues, and only time will tell if it will be successful.
Fort Collins is gearing up to sign on its first customers in the next few months, while Loveland, the only community to go around the Taxpayer’s Bill of Rights and bond nearly $100 million without voter approval from its residents, is still in the build-out phase. It recently completed its bond sales.
A report by Complete Colorado uncovered several areas of concern with the Longmont utility. Loveland and Fort Collins face even greater battles as their long-term debt is two and three times that of Longmont with fewer residences and businesses to support the utility.
Greeley’s circumstance is still different because the municipality does not have an electric utility to loan against, and Brian Sullivan, who is heading up the development team said the city’s only other utility, the water board, has told city leaders it will not put up its assets as collateral. So, any bonding will be unsecured, something Sullivan doesn’t see necessarily as a bad thing.
“With Loveland and Fort Collins if it goes south, the electric customers are going to have to pay,” Sullivan said. “For us, it would be building out and building that revenue as we start connecting, and if we don’t have the take rate, we just stop and don’t spend the money, put the money back.”
A take rate is industry slang for the number of homes and businesses that are needed to subscribe to break even. Sullivan said Greeley will have to show a take rate high enough to allow for bonding with a repayment amount that would make sense.
A committee of residents and business owners who meet monthly will decide by early next year what to recommend the city council do. The committee was formed to take an in-depth look at all sides.
The two companies hired to get feedback met with several groups and discussed everything from whether Greeley should offer the service simply as a matter of pride, or if it’s actually needed. They reported back to the committee in July.
Although many residents and small business owners were optimistic about the idea of city-owned broadband, larger enterprises were not as convinced. And it appears the effort may be more about long-term goals of the city becoming a “smart city,” than making sure everyone has internet.
The city is already investing in expanding infrastructure to the tune of $250,000 per year for conduit and another $250,000 per year for fiber — before the verdict comes back from the committee.
Deep Blue Insight met with four focus groups: two resident groups, a business owners’ group, and a community leaders’ group. The city gave everyone who participated a $50 gift card for their time.
Several key “takeaways and thoughts” came from the discussions including:
- Internet access is a necessity.
- Many were unhappy with current services, especially price and customer service provided by Comcast.
- Some were aware of Longmont’s NextLight service.
- There is interest in Greeley offering the service.
- A belief that municipal broadband would be less expensive, despite historically that not being true.
- Biggest drawbacks were disruption, cost, timing and worry about obsolescence.
Uptown Services met with 12 “anchor institutions,” which included such businesses as Banner Health, Leprino Foods, Aims Community College, UNC, Greeley-Evans School District 6, Weld County, and Greeley Public Safety, among others.
Participants ranked current providers on a scale of 1-5 for satisfaction, all fell between 3-5. The areas of highest satisfaction were customer service, redundancy, and reliability.
Areas of concern (but not exclusive) by the anchor institutions were:
- Is the city qualified to provide broadband service?
- “Hard to evaluate.”
- “Depends on who they partner with.”
- “Depends on staffing and consultants. Need to use the telecom model and not the government model.”
- What issues will shape public opinion?
- “The cost.”
- “It’s a conservative community and hesitant for the city to spend money.”
- “Price of the service and availability.”
- “Offer affordable Internet program.”
The overall findings by Uptown did not seem to support the need for municipal broadband:
- “Fiber is widely available and there is a high incidence of dedicated access via fiber.”
- “Most firms have sufficient bandwidth, but some would upgrade if cost-effective.”
- “Telecom and broadband needs are being met, but firms are open to considering the city network for a data connection.”
Overall, the biggest complaints tended to come from downtown businesses. So the city has to decide if putting all of Greeley at financial risk to support only a small portion of its residents and business is a wise investment.
THE REASONING AND RATIONALE:
When questioned about the findings, Sullivan said the city needs to figure out what the gap may be and how the city can fill it. They have three options: put in its own broadband, enter into a private/public partnership where the city pays for and installs the infrastructure and leases it out to a private company to run, or find a way to support current providers.
“It’s understandable from the older neighborhoods where Comcast doesn’t want to invest in changing the hardware and technology they have because they don’t really have a good return,” Sullivan said. “There are different levels of financial investment with each of those.”
Sullivan admits finding a way to pay for the project may be the biggest obstacle because they have no electric utility to leverage.
“It’s a bigger hurdle for Greeley to get over,” Sullivan said. “In fact, in our research, there isn’t any other community that at the population that we have that is doing municipal broadband without an electric utility.”
That doesn’t appear to be stopping the city, however. They are already beginning to put in place some of the infrastructure to beef up city internet services, Sullivan said, by expanding current infrastructure to make sure there is fiber in place that will reach city-owned properties.
At complete buildout, Sullivan said, it’s a cost of about $10-$20 million, which is separate from the $120-$140 million needed to start its own broadband utility.
“We’re looking forward to smart city initiatives,” he said. “We’re already moving our water meters to cellular connections. But it would be more economical if we could switch those to web connections. And you start looking at autonomous cars and sensors and traffic network that all need connections. So building (that portion of the fiber network) makes sense for us.”
Sullivan said there’s a reason to believe that can be leveraged to a private entity to build the rest of the network.
“We’re putting it in with the capacity it can be leased out to somebody else,” Sullivan said about the overall capacity of the fiber currently being installed, which is about 140 strands. The city only uses about 12-20 of those. “That will leave us a lot for capacity moving forward.”
Sullivan admitted there is still a lot of unanswered questions that need to be figured out. He said that is what this entire process is about.
“Why? Why should we do this?” he said. “What’s the gap we’re trying to fill? Is it just that we want to build capacity to be competitive against the other communities in the region? Is it that there is a need that is not currently being met?”
Another survey is planned in the next week or so via telephone, with the intent to reach about 400—500 people, which Sullivan said makes it a statistically valid survey.
It will take about two to three years to fully build out the network should that be the direction the city goes, Sullivan said, adding he’s not worried about changing technology making it a risky choice.
“I don’t see fiber as obsolescence,” Sullivan said. “Fiber is really the backbone for how everything moves, even if 5G comes in and AT&T or Verizon put up towers every 500 feet. It still connects to fiber. If the city has fiber in place, we can lease that out.”