Business/Economy, Exclusives, Featured, Fort Collins, Uncategorized

Hunt: Fort Collins’ municipal broadband scheme still falling short

Since 2017, the legion of failures peppering the rollout of Connexion, Fort Collins’ municipal broadband project, have been well-documented. Now, the City is running out of money and time to complete the project, and whether a completed Connexion will be financially self-sustaining is a looming unknown.

From the start, nearly all projections presented in the Connexion business plan, on which voters based their approval of the project, have failed to materialize. Even the promise that the plan “would be updated as new information becomes available” (p.5), has proven untrue. Worse, it is reasonable to conclude the authors of the business plan knew, or should have known, their auspicious projections were too good to be true.

The earliest quarterly report (Q1 2020), the first report since Connexion’s construction phase began, painted the grim picture of a dismal launch, one from which the project never fully recovered. Since then, the project’s biggest cheerleaders have moved on from the City’s employ, while Connexion’s languishing uncertainty continues.

The public’s disturbingly lethargic response to the launch of a new Internet-provider was indeed a foreboding sign of things to come, so much so, that even the early enthusiasts of the City’s foray into the telecom industry voiced concerns about the slow start-up, lukewarm progress, and correlating lack of transparency of the Q1 report.

Fast-forward to January 2021, when the first full-year report was released. At this time, only 1/3 of the fiber-area had been constructed, yet 63 percent of the construction budget was spent. But the biggest whiff was the reported revenues, which were a dismal $4.5 million, or 80 percent, below forecasted projections. It is fair to say the status of Connexion at this time was abysmal, consistent with failing municipal-broadband projects nationwide.

For the next year, meaningful recovery proved elusive. By spring of 2022, the City had to make two life-support cash injections into Connexion’s construction budget—an $8.2 million transfer from the general fund in September, 2021, and $20 million loaned from Fort Collins Light and Power in April, 2022.

Today, construction remains unfinished while public-disenchantment with Connexion’s offerings persists. Revenues year-to-date are in the red by almost $1 million, while investment expenses are in the red by $816,000. City leaders are still peddling excuses for dilatory progress and grievously exceeding their budget. There are still more questions than answers.

But the stakes are higher now than they were in Q1 of 2020. The first installment of principle and interest payments on the $150 million bond Fort Collins issued to fund the project, is due this month—$4.2 million-dollars. Current Connexion Executive Director, Chad Creger, said via email that the money would come from Connexion’s operations budget, which as of the most-recent report, appears to have insufficient funds to cover the full amount (and is trending in the wrong direction).

Construction-completion deadlines have come and gone, revenues continue to be woefully low, and the City still will not disclose the subscription numbers for commercial customers—a critical indicator of the projects ability to be financially solvent. Sadly, little has changed since Connexion’s enthusiastic advocates expressed concerns in early 2020.

What remains to be seen is if the $28.2 million of extra funds is enough to complete the project, or if Connexion will be over-budget yet again. And, once completed, will Connexion be financially self-sustaining? If past is prologue, Fort Collins residents ought to be skeptical.

Sarah Hunt is a resident of Fort Collins.


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