That was the warning from Ben Noble, the city’s budget director, in a memo sizing up the consultant’s report.

A property tax, on the other hand, “would indeed limit risks to the General Fund since some or all of the capital costs would be paid from the levy and not from operating revenue,” Noble wrote. It wouldn’t be without risk, he cautioned, but it’s “possible that this approach could help provide the resources needed to leverage other public funding or private capital, in pursuit of a more robust broadband network.”

Would Seattle support a broadband levy?

Reading the comments on the recent Comcast outage (and other stories), you might think that people would gladly raise their taxes to get away from incumbent Internet services.

Hear GeekWire's Todd Bishop discuss this story Monday in the noon hour on The Record on KUOW, 94.9 FM in the Seattle region, and kuow.org. But property owners in Seattle are already paying a long list of taxes, for everything from parks to education — and that’s before Seattle Mayor Ed Murray’s $900 million transportation levy hits the ballot. The tax from the transportation levy would cost the median Seattle household $275/year, for nine years.

The broadband project would be about half the cost of the transportation initiative. Municipal broadband advocates would be able to point to the potential savings in subscription fees as reason for voters to approve a broadband tax. Still, it would be one more levy in a city growing weary of them.

Do Seattle residents want a municipal broadband network? Here are the responses from the consultant’s survey, when people were asked what the city’s role should be in broadband access.

Forty-three percent of respondents said they want the city to offer broadband services to the public, 22 percent want the city to build a municipal broadband network and lease it to private companies, and 13 percent want the city to “encourage a private firm to build a private network.”

Seattle’s path forward is unclear. Noble and Michael Mattmiller, the city’s chief technology officer, point to the possibility of landing state or federal funding, or striking a public-private partnership.

But those scenarios are full of uncertainties and risks of their own, as Seattle learned through the Gigabit Squared debacle. After entering into a partnership with the city, the Cincinnati company failed to raise enough money to implement a promised high-speed Internet network in 14 Seattle neighborhoods. After planning to pursue a multi-million-dollar project together, the city ended up suing Gigabit Squared over an unpaid $52,250 bill.

In an interview last week about the consultant’s report, Matmiller also cautioned that there would be no guarantee of success with the scenario of a $45/month rate subsidized by property taxes.

“We still want a model that puts less risk to the system,” he said. “Even though it’s a cheaper monthly amount, if Comcast or a competitor comes in and uses their pricing power to match it and takes away the consumer argument to switch over, then we are stuck in same boat where now you’re paying a property tax and we have to shut down the system.”

CenturyLink’s Gigabit Rollout

In the short term, Seattle CTO Mattmiller cites CenturyLink’s rollout of gigabit Internet in Seattle as an encouraging sign. In addition, Comcast announced last month that it will offer gigabit service to more than 1 million Washington-based customers starting this summer.

But consumers would clearly benefit from competition.

For example, in the Seattle area, CenturyLink has been advertising its new gigabit Internet service at a promotional rate of $79.95/month. At first glance, that’s not far off the $70/month that Google Fiber charges in its initial markets, and it essentially matches the $80/month charged for gigabit speeds by Condo Internet, which is part of Wave Broadband.

The catch: CenturyLink’s rate requires a multi-year contract that bundles broadband service with a $45/month phone plan. That means you actually need to spend $125/month with CenturyLink, not including taxes and fees, to get the $79.95/month promotional rate for gigabit Internet.

This can vary by geography, but based on our research, to get gigabit Internet from CenturyLink — not bundled with anything else — the price is currently $110/month in Seattle under a one-year contract, not including taxes and fees, and hoops to jump through. For example, to get that rate, you have to opt for paperless billing and autopay. There’s also an installation fee and a monthly modem rental fee, if you don’t buy your own.

Without a contract, the price for gigabit Internet from CenturyLink would be $154/month.

CenturyLink’s fine print wasn’t a surprise to Andre Vrignaud, a Seattle resident and veteran of the video-game industry who made headlines in 2011 when he was banned from Comcast for unknowingly exceeding a data cap. He’s become an advocate of broadband users’ rights, and when he saw the CenturyLink offer for $79.95/month gigabit Internet, he was naturally motivated to dig into the details.

“CenturyLink is offering choice, not competition,” Vrignaud said. The city “needs to stop pointing at CenturyLink’s fiber offering as a win.”

In a statement about the broadband feasibility report, CenturyLink said, “We share the City of Seattle’s commitment to providing the fastest internet speeds to populations at all income levels. We believe it is the right thing to do for the community and also makes good business sense.”

The company noted that it’s “on track to reach 100,000 households by year’s end” in the city.

In fact, Vrignaud himself recently signed up for CenturyLink gigabit service — after making sure it didn’t have usage caps. He recently took a new job as Games Platform Strategist for Mozilla, and he opted for the CenturyLink service in hopes of avoiding the problems that he has experienced trying to conduct video conferences on a Comcast connection.

“I had to shift to this ‘choice’ in the hopes of reliability,” Vrignaud said. “But I really wish I had competitive pricing choices.”

Christopher Mitchell, director of community broadband networks for the Institute for Local Self-Reliance in Minneapolis, Minn., agreed that the further rollout of gigabit service from CenturyLink and Comcast isn’t the solution to the problem.