The results are in from a fiber-to-the-home feasibility study that the city of Cortez has conducted since January.
On Tuesday, Doug Dawson of CCG Consulting and Chris Konechne of Finley Engineering brought a collection of data from their monthslong study, which was designed to determine whether the city could deliver high-speed internet to all Cortez residents without losing taxpayer money.
They presented the same information at a well-attended public meeting on Wednesday night, where citizens got a chance to ask questions about the plan.
The consultants estimated the cheapest method to provide fiber to residential areas in the city would be for the city to become a direct internet service provider and fund the fiber installation with a temporary sales tax increase.
In both presentations, Dawson and Konechne said their survey showed Cortez badly needs broadband but faces unusual obstacles to acquiring it. Dawson said a speed test and survey of residents’ internet bills showed that few people in Cortez get the internet speeds they’re paying for, and the fees they are paying are inconsistent, with some people paying the advertised price for service from companies such as CenturyLink and TDS Telecom, and others getting significant discounts.
“We couldn’t find two people who paid the same price,” Dawson said.
Konechne said the biggest obstacle to cheap internet in Cortez is the accessibility of telephone poles. Normally, installing fiber on existing poles is cheaper than burying it, he said, but because many of Cortez’s poles are old and don’t meet current fiber standards, it would cost about as much to make them ready for aerial fiber as it would to install a buried network.
He proposed a hybrid design of buried and aerial fiber, in addition to connecting with fiber the city has already installed.
Dawson estimated the fiber project would cost $10 to $14 million. He added that the usual method of paying for citywide broadband – applying for bonds – also wouldn’t be practical in Cortez because of the high price of installing fiber. If the city paid for fiber installation with a bond, it could lose millions of dollars over the next 25 years, according to Dawson’s estimates.
“This scenario does not work,” he said.
He also dismissed an open-access fiber model, in which the city would install fiber and allow other ISPs to connect consumers with it, as impractical. The city wouldn’t be able to charge ISPs enough to pay for the network, he said.
Instead, Dawson and Konechne proposed a system in which the city would install fiber throughout Cortez, using funds from a temporary sales tax increase of about 1 percent, and connect residents with the high-speed network for a competitive price. This model, he said, would pay for itself and turn a profit for the city over 25 years.
But the consultants said becoming an ISP would be risky for the town no matter what. Other communities have been sued by other ISPs for providing their own internet services. Providing fiber to the home would also force the city to get involved with a highly technical industry in which its members have little experience.
Dawson recommended the town start by conducting a survey to determine how high the demand for broadband is in Cortez, and whether residents would be willing to raise sales tax rates to get it. He recommended the government conduct more engineering work to determine the precise cost of installing fiber. If the sales tax increase were approved, he said the fastest the fiber project could be completed would be in three to four years.
Although more than 30 people attended the meeting on Wednesday, few of them spoke up during the question-and-answer period. Mark Drudge, executive director of the Cortez Retail Enhancement Association, said he believes more people would join the city’s existing broadband pilot project, and any future fiber-to-the-home network, if they understood it.
“I think it’s been poorly presented,” he said.
Dawson said that if the city chooses to become an ISP, marketing its internet services will need to be a high priority.
During the workshop on Tuesday, some City Council members expressed approval for the idea of becoming an ISP, although they did not make a decision on how to move forward. At the Wednesday meeting, Mayor Karen Sheek said she believes the consultants’ fiber-to-the-home model is the city’s only option for the internet speeds that local students and telecommuters need.
“CenturyLink has not provided that, I don’t see that TDS will, I don’t see any other providers jumping on the bandwagon to come do that,” she said. “If this is going to happen, we’re going to have to do it. Nobody likes the idea of taxes, but in this case particularly, this is an investment in our future.”
CCG and Finley’s full written report on the feasibility study is available on the city website, along with a video recording of Wednesday’s meeting.