Greeley city council chose not to move forward with a recommended plan to bring municipal broadband to Greeley Tuesday evening at the council’s work session.

A plan recommended by a city-appointed broadband task force would have created a public-private partnership between the city and a private provider to create an offering from the city for residents that would have competed with the existing fully private options.

But strong, all-but-unanimous concerns from the council, including unknowns on cost and liability, kept the council from choosing to agree with the task force’s recommendation.

Brian Sullivan, the Application Service Manager of IT for the city of Greeley, was a key part of the city staff who worked on the task force. His presentation at Tuesday’s work session laid out the history behind the options that were being recommended by the broadband task force.

“We looked at price, service and availability as drivers,” Sullivan said. “We wanted to make sure we were addressing a problem.”

Lori Sherwood, the director of broadband development for VantagePoint, was contracted as a consultant to help lead the project.

“The community spent the better part of the last year exploring different models, understanding the different opportunities and what the costs are,” Sherwood said during the meeting. “The community really took time to debate what is the problem we’re trying to solve, to what models look good and what are the strengths and weaknesses?”

The findings presented by Sherwood included the following data:

* Overall 85% of households use the internet at home, but, conversely, 15% is not connected. Sherwood called that a relatively high “gap number.”

* Internet service satisfaction is below-average in Greeley. Pricing and speed were the biggest elements cited by those who would consider switching.

* Residential take rates, or the amount of residents who’d be estimated to take up service should it be offered by the city, were roughly 32% for internet. Sherwood called that relatively low.

* Residents think highly of the city of Greeley and would prefer the city be a new provider, though that margin was relatively narrow.

Five models were considered, Sherwood explained.

Three options included working on improving service without overhauling offerings from the city itself. Maintaining status quo, working with existing providers, and establishing a grant program that would set aside money to establish a grant program to subsidize connectivity improvement were those potential options.

The other two were to create a new network, with the city taking one or another approach to doing so.

Why not own it outright as a city?

The first model considered by the task force is the city-run Internet Service Provider, or ISP. That is a network that is owned and operated completely by the city itself. The cost over 10 years was estimated at $120 million for a five-year build. That would have offered a 1-gigabit, $70/month service to Greeley residents, but it was determined that the model would be revenue-negative to the tune of -27.83%.

“Why isn’t it viable in Greeley if neighboring communities are doing this seemingly effectively?” Sherwood said. “The primary reason is Greeley doesn’t have the municipal electricity infrastructure.”

Fort Collins, Loveland and Longmont, for example, operates its own electrical utility, and has for decades, Sherwood said. That creates a more favorable scenario for multiple reasons for that city to operate its own city-owned ISP, Sherwood explained.

Public-private partnership option

Sherwood described the next option, which is the one that was eventually recommended to the council, as a chance to have the benefits without the financial risk.

The city in this public-private partnership model would require the city to build a network with a private company. Sherwood, however, said that an existing provider, Allo Communication, has, unsolicited, presented its interest t the city already.

“That’s a rare opportunity,” Sherwood said. “A lot of communities would be jealous of that opportunity.”

The public-private partnership model creates a union between the city and a private provider who would build out, with partial city funding, much of the network, and would also provide much of the infrastructure.

“What this would do is create competition where now there is only one provider, Comcast, who is offering gigabit service,” Sherwood said in response to a question from councilwoman Kristin Zasada. “Pricing is very high, not only for gigabit packages, but for everyone. We found that in cities with movement to public-private partnerships or other broadband programs, it drops prices. All the providers drop prices and behave better. That creates a more competitive environment and more choices for citizens. If you’re wanting gigabit service, you’re not stuck with terms and decisions of one company.”

Zasada pointed out, with concern of taking on more debt and additional liabilities, that it would be beneficial to see hard numbers on the public-private partnership scenario. Sherwood explained that it was difficult to have those numbers yet because it was a conceptual relationship with Allo.

Council concerns

Council members voiced numerous concerns over the proposals.

Dale Hall leaned toward working with current providers rather than taking on the risk of a public-private partnership.

Zasada seemed interested in the grant program and felt it was better to suggest residents without internet service use the library or other options like that, while the main concern that needed addressing for her was for businesses.

Brett Payton was concerned about the legality of an uninvited proposal and didn’t think a partnership was the right move.

The task force members present spoke to their reasoning for the recommendation of a public-private partnership – notably including a lack of leverage when it comes to working with existing providers – but doubts lingered on the council.

Payton suggested getting out of the way from a regulatory perspective to invite other competitors to the field.

Tommy Butler suggested that if a request for proposal was extended and none of the proposals were amenable to the council that the council wasn’t locked into entering into one.

“Maybe we just put it out there and see what we get?” Butler said, noting that there simply isn’t competition in the market.

Butler was the sole voice on the council advocating for at least getting proposals for a public-private partnership scenario.

Mayor John Gates thanked the task force for its hard work, and noted that it was unlikely that any recommendation be met with consensus. But he firmly agreed with others on the council who were leery of the suggestion from the task force.

“I’ve come full circle on this,” Gates said. “I thought I could easily support a public-private partnership, but I can’t. We don’t have hard numbers, but the soft numbers I’ve seen scare the hell out of me. If Allo wants to come in and lay cable, get permits, I have no problem with it. But that’s not on our dime. I’m ready to kick this can down the road. I can’t with a clear fiscal conscience enter into this. I believe this is a money pit.”

The council ultimately asked the broadband task force to move their future work toward considering the option of working with current providers to improve service.