Springfield is among the first U.S. cities to try a new broadband model: The utility builds extra fiber optic lines, then leases them to private companies.

CU official: Lease payments from internet service companies will offset the price tag, not residential ratepayers.

The project could help develop home-based businesses and 5G service in Springfield, the official said.

Dean Thompson uses a simple analogy when he talks up City Utilities' $120 million new fiber optic plan to make "true" broadband an option for every home in Springfield over the next three years.

"We're talking about the difference between riding a skateboard and driving a sports car," said Thompson, the CU associate general manager over broadband and economic development. "I don't know if most people understand the difference between a 40-megabyte speed versus 1,000-megabyte speed."

Today, Springfield-based companies can do business over Internet connections boasting speeds up to 100 gigabits, Thompson said. SpringNet serves many firms that use 40-gig connections, he said.

But residences, particularly home-based businesses, lag behind like poky little puppies. Some entrepreneurs have provided "input" to City Utilities that the Springfield market is "underserved," Thompson said.

"There were people who wanted gigabit service who couldn't get gigabit service," he said.

That presents a problem in terms of developing the local economy. If small entrepreneurs can use faster Internet in home offices, they could get more business done.

A faster residential network, combined with other Springfield entrepreneurial supports like the eFactory, would be "just another feather in our cap" that could potentially make the Queen City more attractive to large corporations that might be thinking about setting up a Springfield office with well-paying jobs.

But CU has to build the new fiber-optic capacity first.

"Less than 10 percent of our community even has access to true gig service," Thompson said. "I mean true, symmetrical, 1-gig up and 1-gig down," he added, referring to massive amounts of data rapidly uploading and downloading in and out of customer residences via the Internet.

1,100 new miles

The new capacity project, which Thompson said will be "offset" by lease money from private companies wanting to use the network — not paid for by ordinary ratepayers through their monthly utility bills — will add 1,100 new miles of fiber-optic lines and will touch 115,000 "demand points" like detached houses and apartments grouped together in complexes.

CU's new network will extend from a series of dun-colored distribution "huts" scattered in seven geographic zones carved out of Springfield and CU's service footprint, Thompson said. "Make ready" and full-on construction work began in late 2019 and last month.

From the "huts," the new extra lines will go onto utility poles to the 115,000 "demand points." The goal is to bring the network online for businesses and other residential customers no later than February 2023, Thompson said.

CenturyLink, which already operates in Branson, is the first company to sign up for the excess fiber-optic capacity. It will compete with longtime market players Mediacom and AT&T.

At least one national broadband expert says the CU-CenturyLink arrangement — in which a for-profit Internet-service provider (ISP) expands beyond its historic service footprint with the help of a local publicly owned electric company — is the first one of its kind in the United States.

Meanwhile, the model that funds this gigabit-capable network is called the "utility lease model." In this model, a city-owned utility outfit like CU invests the capital to put the backbone of the new fiber-optic network in place. Then a for-profit ISP like CenturyLink puts the "system drop" between the network and individual residences. They pay for marketing and customer service.

Funding the project this way saves City Utilities $50 to $80 million, Thompson said, and keeps it from competing directly with the private sector, which City Utilities is reluctant to do.

Home customers will pay CenturyLink. Thompson said it's too early to know what the monthly sticker price will be, but he's optimistic.

"I think it'll be a market rate that is very attractive for people to sign up for compared to what's in the market currently," he told the News-Leader on Friday.

Attention from the 'top think tank'

The utility lease model is new, and Springfield is an early adopter, according to an opinion article published recently by Blair Levin, a Yale University-educated broadband expert with the Washington, D.C.-based Brookings Institution. (Most observers view Brookings as a politically centrist group that leans a little left. The University of Pennsylvania has frequently dubbed it "the top think tank in the world" in its annual "Global Go To Think Tank Index Report.")

The only other place in America to try the utility lease model is Huntsville, Alabama, Levin wrote. Levin noted that Facebook and Mazda Toyota Manufacturing recently referenced Huntsville's utility lease model network when they announced new investments worth hundreds of millions of dollars for the Alabama community.

"I can't say it'll attract a company like Mazda, but I can say it'll be another tool we have," Thompson said.

"Springfield’s announcement demonstrates that it isn’t just a one-off," Levin wrote, referring to utility lease model partnerships to build out 21st-century broadband in small cities. "There’s reason for optimism that this new approach could start scaling to address both the digital divide and smart city goals in the years to come."

A 'transformational' network?

Thompson said the new network could have effects that aren't obvious at its inception.

For example, faster home networks could allow for more Internet-based medical appointments. That would save resources now spent transporting city patients miles over the road for health care appointments.

He also said that because the extra fiber-optic network is "nonexclusive," CenturyLink isn't the only company that could choose to work with CU. "Any company who wants to come in and wants to lease our dark fiber, we'll discuss that with them and see if we can do it."

Meanwhile, the 5G mobile networks currently being developed to improve performance of devices like smartphones and tablets will see a faster rollout because of the $120 million plan. The small cell towers that enable 5G need the same excess fiber-optic capacity that home-based small businesses using hard-wired connections will use.

Look for results about five years from now, Thompson said.

"In a couple of years from the time it's finished, we will truly know," he said. "I think we'll really understand how this impacted the community in a positive way, and that'll be transformational."

In the long term, utility companies in less densely populated areas than Springfield may be able to replicate the utility lease model with for-profit ISPs, allowing the potential for more and better broadband service in rural areas.

Those areas are currently getting new federal support for better Internet access, according to past News-Leader coverage.

Gregory Holman is the investigative reporter for the News-Leader. Email news tips to gholman@gannett.com and consider supporting vital local journalism by subscribing. Learn more by visiting News-Leader.com/subscribe.