Onwards & Upwards (Green Fiber)

At least a few cities wonder if their own fiber networks wouldn't be better -- or at least more affordable -- than Google Fiber.

(Benoit Felten/Creative Commons)

Google Fiber is fast, but a handful of Portland suburbs want to move faster.

Some of the same Oregon cities Google is eyeing for its speedy Internet service are contemplating building their own networks.

Hillsboro, Lake Oswego, Gresham and West Linn are at various stages of assessing how they might commission their own fiber-optic networks, which they hope would upgrade Internet speeds and hold down costs for residents and businesses.

They're following the path of smaller cities across the state that have already built their own networks to boost connection speeds, largely in communities the big companies have overlooked.

Most of Portland's suburbs already have at least two options for broadband service, and might get more if Google Fiber arrives with its gigabit connections - 25 times faster than the minimum broadband threshold.

But at least a few cities wonder if they couldn't do it better - or at least more affordably - than Google Fiber.

"They may be a benign company but they would still be a monopoly," said Lake Oswego city manager Scott Lazenby. "And monopolies charge what they can."

Municipal telecom service is a contentious issue nationally. Big cable TV and Internet companies have pushed legislation in multiple states that would prevent local governments from going into the business themselves.

No such proposals are moving forward in Oregon. The FCC voted in February to invalidate such laws, concluding they are more likely to restrict broadband access than improve it. But telecom companies still oppose local governments competing with private businesses.

"We're supportive of public-private partnerships where tax dollars aren't competing against private investment capital," Comcast said in a written statement. "In general, cities have extensive needs like roads, police, parks and community development, and we think especially in times of fiscal tradeoffs that taxpayer money should be focused on those needs rather than competing with the private sector."

For its part, Google Fiber said the cities' exploration of municipal fiber will have no effect on its ongoing exploration of the Portland market.

"Increasing local choice for super high-speed broadband is a good thing for communities," the company said in a written statement.

In Oregon, municipal telecom has a troubled history dating to Ashland's difficult foray into the market in the late 1990s. The Ashland Fiber Network didn't come close to covering the city's costs and was undercut by Charter Communications' cable TV business. The service still operates but it has split off its TV service.

Sherwood tried a municipal fiber network several years later, but it also generated significant losses.

Now, though, a handful of smaller cities say they're producing better results. Monmouth and Independence have a publicly owned utility, MINET, that offers phone, cable TV and Internet service.

Sandy issued a $7 million, 20-year bond to bury 43 miles of fiber connecting 3,500 homes in the city, 20 miles southeast of downtown Portland. It began offering Internet service last October.

"We realized we're too small for Google to come to us," said SandyNet general manager Joe Knapp.

Budget plans called for signing up a third of the city initially, growing to 50 percent over several years. But Knapp said well over 50 percent of the homes in the city have already come aboard.

SandyNet charges $40 a month for Internet connections of 100 megabits per second, four times faster than the national broadband standard. Comparable service from Comcast in the Portland area is more than $100 a month.

SandyNet also offers gigabit service that matches Google Fiber for $60 a month, $10 less than what Google charges in its first markets. Sandy doesn't offer cable TV service yet, but plans to contract with another company to provide it over the fiber network.

Sandy's network is less than six months old, so it's too soon to know how it will perform over time. But public officials in other Oregon cities say they've noticed its early appeal, and Knapp said that he thinks Sandy's approach could work elsewhere.

"I think it's very doable in larger cities," he said.

Maybe. But larger communities would face a different set of challenges.

Sandy is very small area - "We're practically like a neighborhood in Portland," Knapp said - so it's much less expensive to run fiber to all the homes. And SandyNet has tepid competition from a small cable TV operator called Wave and low-end Internet service from Frontier.

In the Portland area, Comcast, Frontier and CenturyLink have all boosted their Internet speeds in the past year and would surely fight to hold their markets. On Friday, Comcast said it plans to eventually upgrade nearly its entire service territory to gigabit service - and bring 2 gigs to many customers.

Additionally, Google Fiber could decide within the next several weeks whether to serve Portland and five close-in suburbs: Gresham, Tigard, Lake Oswego, Beaverton and Hillsboro.

Portland contemplated building its own fiber network in 2007 but ruled it out after seeing the price tag: nearly half a billion dollars. Portland now estimates that a Google Fiber network - which might not serve the whole city - would cost $300 million.

The city isn't reconsidering that decision, according to Mary Beth Henry, director of Portland's Office of Community Technology. Instead, she said Portland wants to create an open regulatory landscape for CenturyLink and Google Fiber - and, perhaps, others - to bring faster service to Portland.

"We're really focused on laying the groundwork for a robust, competitive landscape here," Henry said.

Smaller cities, though, think they might be able to recruit a private company to build and operate a local network that would be much less costly than building out a big urban footprint. Hillsboro will pay a Colorado company, Uptown Services, $44,000 to study its options.

Lake Oswego hopes to commission a company that would build a network the city would lease to multiple Internet companies - perhaps even Google Fiber. Lazenby, the city manager, says his preliminary estimate is that a Lake Oswego network could be built for a tenth of what Portland fiber would cost.

(Before coming to Lake Oswego, Lazenby was city manager in Sandy, where he helped put together plans for SandyNet's fiber service.)

In Lake Oswego, Lazenby said, the goal is to find a private company that would finance and build the network on the city's behalf. Lake Oswego says it's inquired with a number of different companies, including Portland General Electric.

PGE isn't currently in the telecom business but does own most of the utility poles in town, which could be a conduit for the city's fiber lines. The electric utility says it's studying Lake Oswego's plan; Lake Oswego says it hopes to have proposals in hand from prospective praters.

West Linn and Gresham are at earlier stages, still discussing whether they need their own fiber networks. West Linn plans to appoint a task force to study the possibility. The Gresham City Council's 2015 work plan concludes that high-speed broadband is economically essential, and commits the city to finding a way to bring faster services to Gresham.

"Should market-based approaches be insufficient," the council writes, "the City will evaluate other alternatives such as a City-owned fiber network."

Oregonian/Oregonlive reporter Luke Hammill contributed to this report.

-- Mike Rogoway

mrogoway@oregonian.com

503-294-7699

@rogoway