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Fort Collins Chamber: City Must Slow Down Municipal Broadband Efforts

August 9, 2017

As this blog reported last month, Loveland, Colo. has decided to slow down its plans to build a municipal broadband network. Several officials said they wanted more time to explore and study the issue. In a column in the Coloradan, Fort Collins Area Chamber of Commerce President and CEO David May says his city should do the same. (The city council currently is deciding whether to put the question before voters this November.)

Fort Collins has been considering a government-owned network for about two years, but May argues “there are still important questions that have not been answered.” Here are some issues May thinks city officials and residents should consider:

  • What problem exists that requires changing the City Charter to add telecom services, and one in such a high-risk competitive space? This needs to be explained.
  • What’s the business case for doing this? Anecdotal evidence and statements have been offered about the importance of this to the economy and business, but where’s the data?
  • Proponents cite business competitiveness as a reason for this investment, yet the one gig service for business is priced at an uncompetitive $599.95 a month.
  • What needs and opportunities in light and power will go unaddressed because we are giving up all of our bonding capacity for this project?

Answering these questions is important. A municipal broadband system would cost Fort Collins residents anywhere from $130 million to $150 million.

May also questions whether Fort Collins would be able to earn money from a broadband network. He explains that, while “the city has vast experience running monopolies … a telecom utility would operate in a highly competitive space filled with capable commercial enterprises.” City officials have assumed about one-third of residents eventually would subscribe to the taxpayer-financed network. Even at that rate, it would take 14 years for the network to make a profit, May says.

And what happens if the city doesn’t attract that many subscribers? Then “all Fort Collins utility customers are liable for the debt” and “something like $17 would be added to each utility customer’s monthly bill until the debt is retired,” May explains. He also noted residents would pay that fee even if they “don’t have broadband or are not a city broadband customer.”