[1st-mile-nm] Glenwood Springs, CO: Fiber Network Update

[Richard Lowenberg]

We have some new Colorado based subscribers to this list, so I will be posting
occasional news on CO initiatives and issues, as appropriate.   As the
following article indicates, many NM and CO communities share the same
incumbent providers (Qwest and Comcast), and therefore, similar potential
concerns.
rl
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Glenwood Springs fiber-optic partnership gets bad reception
Neither Comcast nor Qwest eager to join city

By Pete Fowler, Post Independent Staff
Glenwood Springs, CO Colorado
June 2, 2008

www.postindependent.com/article/20080602/VALLEYNEWS/624766601

GLENWOOD SPRINGS, Colorado - Qwest and Comcast didn't slam the door on
partnering with Glenwood Springs to expand the city's fiber-optic network, but
they didn't jump at the chance either.

Qwest representatives met with city officials Wednesday and Comcast met with
city officials earlier in the month for some preliminary discussion.

Mayor Bruce Christensen said the city approached Qwest and Comcast to see if the
companies had any interest in partnering with the city to expand its fiber-optic
network.

"In my opinion public-private partnerships are the best way to move forward," he
said.

"I didn't discount it as a possibility," said Charles Ward, president of Qwest's
Colorado operations.

Qwest and Comcast representatives said they couldn't say whether they would
partner with the city until they get more detailed information about the
proposed expansion.

Comcast vice president of public relations Cindy Parsons said Comcast believes
competition is good for consumers, but it best benefits everyone when it's done
on a level playing field.

She said Comcast has invested more than $1 billion in Colorado to upgrade and
enhance its network in Colorado over the past several years. Comcast's network
in Colorado includes a "robust" network of fiber optics, but it connects to
homes primarily with coaxial cables, Parsons said.

In an interview Wednesday, Ward expressed skepticism about the city's plan. Ward
said he cautioned the city not to be overly optimistic in looking at the market.
He questioned if there is any need Glenwood could fill by expanding its network.
He doubts Glenwood would be able to offer lower costs to subscribers or get the
network working financially.

"I think they would have a difficult time recovering the cost," he said. "We
would be an aggressive and effective competitor."

He said Glenwood would be an unfair competitor because of its ability to get
municipal bond rates that amount to financing on better terms. He also said the
city would compete unfairly because Glenwood controls access to infrastructure
and rights of way in the city.

Christensen questioned why private companies wouldn't want to partner with the
city if the city has such an advantage.

"For whatever reason, it seems like on a national basis the telecoms do have an
interest in preventing these models in small communities from succeeding," he
said.

He said the city could look to other businesses besides Qwest and Comcast to
partner on the proposed expansion but he wanted to extend them the offer.

Cable and telecommunications companies have successfully lobbied 15 state
legislatures to pass laws preventing municipalities from entering the broadband
business, according to the Wall Street Journal. They've also filed lawsuits
against existing projects arguing they're an improper use of taxpayer money and
compete unfairly with private companies. The journal's May 19 article says
countries like France, which have faster average Internet connection speeds
than the U.S., have benefited from increased competition by governments against
former telecom monopolies.

Qwest has been installing fiber optics to "nodes" in neighborhoods along the
Front Range, but primarily connects to homes with copper, except in some "very
limited" circumstances, Ward said. He said Qwest determined it wasn't yet
economical to send fiber optics directly to homes on a wide scale.

In April, Glenwood voters gave the city the OK to pursue expanding its network
by a 707-605 vote. That vote was required by a piece of 2005 legislation whose
critics charge was lobbied for by cable and telecommunications companies in
order to discourage competition from cities.

Glenwood's current fiber-optic network was installed in 2002 and has lost about
$200,000 a year for the past three years, according to the city. It connects
directly only to businesses in some areas.

The plan the city is considering calls for the $12 million expansion to be
repaid for by user fees and not taxes. Another vote will be required to
authorize the city to enter into the $12 million debt. The expansion would
allow the city to sell Internet, voice and video services directly to homes
through fiber optics.

Critics say the expanded network couldn't compete with large companies. They
worry it would fail financially and stick taxpayers with the sizable bill. The
plan's supporters believe the expansion would get the network to break even or
make money while providing better services to consumers. They believe it would
keep money local, bring more businesses to the city, create jobs, raise home
values and allow the city to better control its own destiny.

City manager Jeff Hecksel said a survey of other fiber-optics-to-homes projects
should be released soon, and the next step will be to bring the issue back to
the City Council for further discussion. City officials have said they will
proceed cautiously and study the market thoroughly before acting.

"We're not going to go issue bonds for a huge amount of money without knowing
that we have a very, very high probability of succeeding," Christensen said.


-- 
Richard Lowenberg
1st-Mile Institute
P.O. Box 8001, Santa Fe, NM 87504
505-989-9110;   505-603-5200 cell
rl at 1st-mile.com  www.1st-mile.com

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