BACKGROUND:

Paving the way for local broadband development in Larimer County is the City of Fort Collins. The City recently made news with its election success on Ballot Question 2B to have the option of developing a municipal broadband network to serve its citizens. On a shoestring budget of roughly $15,000, Fort Collins Citizens Broadband Committee rallied against political issue group Priorities First, reportedly backed by incumbent providers at a considerable sum of over $900,000 (https://muninetworks.org/content/totals-are-comcast-spends-900k-fort-collins-election)… and prevailed. The City now has the voter stamp of approval to develop a municipal network, under the leadership of Mike Beckstead, Fort Collins Chief Financial Officer. News From Somewhere was fortunate to interview Mr. Beckstead about the election outcome and what’s next.



Q. Congratulations on the City of Fort Collins’ success with Question 2B in last November’s election. For citizens who are not familiar with this issue, please summarize what it is and what it means to Fort Collins.

A. Journey back to 2011, the initiation of Gig.U* by Dr. Patrick Burns, Colorado State University, Vice President for Information Technology and Dean of Libraries. Also reference the Google Fiber Challenge in 2010-11, where Fort Collins made a bid and was #2 in the selection process. These efforts prompted City Council Futures Committee** conversations. Being a connected city makes us a competitive city. It provides economic vitality to our citizens through local businesses, accessible medical care, the option to work from home, and maintains Fort Collins’ attributes as a Choice City.



In 2015-16, the City Council allocated $300K to explore the issue. Magellan Advisors conducted a case study and Uptown Services was hired to develop a feasibility model, the basis for the Broadband Business Plan, which is posted on the City’s web site: https://www.fcgov.com/broadband/pdf/7.27.17%20Broadband%20Business%20Plan.pdf?1504213705



This Plan provides detailed background on the question that voters answered and how the City will move forward with responsive broadband efforts.



Q. What does the success of Ballot Question 2B mean to the larger area; Larimer County and neighboring cities/counties?

A. Though the focus of outcomes from 2B is Fort Collins’ city limits and Growth Management Area, future partnerships are not out of the question as this region’s broadband development proceeds. Similar to the benefit to Fort Collins and Larimer County of Longmont’s accomplishments and those of other cities/counties in Colorado, each step moves us closer to the common goal of access to reliable, capable internet for all citizens and communities.



Q. A question that Larimer County received during the Senate Bill 152 campaign (2016 Ballot Question 1B) was if this passes, when will we get broadband (through the County): How would you answer that question about the City?

A. The City cannot instantaneously drop the network into the community. After a year of planning and design, building out the network is expected to take about 3 years. When a specific neighborhood is connected will depend on where they are in the build-out process which will occur from a specific starting point and spread across the community as fiber is extended from that point. The focus of these broadband efforts is first within the Fort Collins city limits and ultimately into the Growth Management Area as annexed into the City.



Q. Developing a municipal broadband utility as an option is a very large undertaking: What should citizens know about why this is a priority that is being pursued.

A. Futures Committee conversations have brought in incumbent providers to lend insight on the future direction of broadband service for our community. The feedback was that there were no concrete plans and the strategy would be reactive. Providers indicated that they would deliver speed as the market needed speed. This approach put Fort Collins at risk of being a disconnected city. That’s what started this process.



The City went into this process not with a single-minded intent to create municipal broadband. Ideally, the current incumbents would step in and upgrade their systems to provide reliable speed but they chose not to. We tried to find another 3rd party willing to build and operate a network, but could not find one willing to assume the risk. Axia considered this undertaking on their nickel, but their parent company decided against it due to the strength of the telecom and cableco leaders in the US. The City then explored a partnership model in May of 2017 to share risk. Most of the interest was from integrators that wanted the City to guarantee a revenue stream. So now on to Option 3; the retail model. The City would have wanted any of the recommended options to be put to a vote to ensure that the decision represents the interests of the community.



Q. What will be the most significant benefits that all local citizens will see from the passing of Question 2B?

A. This depends on what incumbent providers might do. Incumbent providers are waking up. When Longmont developed NextLight, they had little reaction from existing providers. Providers are starting to see the demand for options. We wouldn’t be doing this if the incumbents would do it. If they would have responded to this demand, Fort Collins would not have pursued the municipal option.



Citizens are already seeing benefit from the conversation about options Fort Collins can provide for broadband. Now the conversation is more real. The competition has already lowered pricing to the benefit of current consumers. If the vote had been different, the City would have honored it and moved focus on to other priorities.



With regard to Gig City benefits in general, this is too new to comment on concretely or reference studies. Most of what we hear is anecdotal. What is clear is that in addition to more options and industry-standard speed, citizens, organizations and communities can expect speed, reliability, and a high level of customer service from the City in its broadband efforts.



Q. There has been significant speculation about the amount of money spent by the opposition during last November’s campaign and the message that was delivered via advertising: What clarification would you make regarding those advertising messages.

A. Election advertisements about trading roads or other infrastructure for broadband were a misleading portrayal of how funds are allocated. All are necessary, and forgoing one does not direct funding to the other. Each has its own priority and process. Unlike a financing structure for, say roads, there is a revenue stream attached to broadband. The City will borrow funds to build out the network and revenue from users of the network will pay off those bonds. Take-rate and managing the costs of construction are critical: This has been studied and can be referenced on the City’s Broadband Business Plan [link above]. A 30% market share will render a 14 year payback; 45% market share will be 11 years.



Q. What is the next step for the City following the passing of Question 2B? What is the time frame?

A. On November 28, there was a work session with the Council: Direction to move forward included bonding, recruiting and RFPs. The City will do this as we’re addressing the model for governance of the utility. Four (4) key factors include: 1) basis for making decisions (commercial vs. social & political); 2) timeliness of decisions (nimble and responsive to the market place); 3) protecting strategic information (maintaining transparency without telling the competition what we are doing); 4) business and technical expertise needed in decisions. How we address those four factors is most important in making business decisions while keeping the public informed. The City is committed to maintaining that balance of protecting strategic, confidential information with being transparent to communities, organizations and citizens served, while providing business expertise to competitive business.



2018 is a planning year, with construction anticipated in 2019. The current goal is to have bonds closed by April, finalizing RFPs. It is projected that by the third quarter of 2019, the first Fort Collins customers will be lit up, with the last customer being the fourth quarter of 2021. When service is available depends on where you are in the build-out.



Q. What else should our News From Somewhere readers know about City of Fort Collins broadband plans and efforts? If they would like to know more and/or be involved, who should they contact?

A. Some have said that the value of broadband efforts is in the network. No: The value is in the use of the network; same as roads. The value is in, for example, a doctor sending a MRI, a videographer uploading a documentary, a scientist processing data, a student submitting an assignment, a local business processing credit cards, and emergency staff responding to a situation.



The City of Fort Collins’ mission in its broadband efforts is to: Have the right people to ensure a good outcome;

Get the governance right;

Get the four key factors previously mentioned right;

And to execute well the means to deliver a reliable, capable network. Larimer Broadband thanks Mr. Beckstead for his time and this valuable information for our News From Somewhere readers.



*“Gig.U seeks to accelerate the deployment of ultra high-speed networks to leading U.S. universities and their surrounding communities. Improvements to these networks drive economic growth and stimulate a new generation of innovations addressing critical needs, such as health care and education.” https://publicrelations.colostate.edu/2011/07/27/city-of-fort-collins-and-colorado-state-university-join-university-community-in-gig-u-effort-for-next-generation-network-based-innovation/

**City of Fort Collins Futures Committee https://www.fcgov.com/council/futures.php