Glenwood Springs fiber-optic partnership gets poor reception
Glenwood Springs correspondent
Aspen, CO Colorado
GLENWOOD SPRINGS ” 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.
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