[1st-mile-nm] Cortez reveals results of fiber project feasibility study

[Richard Lowenberg]

Cortez reveals results of fiber project feasibility study

Sales tax increase could fund city-wide internet

By Stephanie Alderton Journal Staff Writer
Thursday, May 24, 2018
https://durangoherald.com/articles/225275

Consultants hired to do a fiber-to-the-home feasibility study in Cortez 
estimated the cheapest method to provide fiber to residential areas in 
the city would be for the city to become a direct internet service 
provider and to fund the fiber installation with a temporary sales tax 
increase.

This week, Doug Dawson of CCG Consulting and Chris Konechne of Finley 
Engineering shared the collection of data from their months-long study, 
which was designed o study whether the city could deliver high-speed 
internet to all Cortez residents without losing taxpayer money.

Dawson and Konechne said their survey showed Cortez’s need for 
broadband, and the unusual obstacles that stand in the way of bringing 
it there.

Dawson said a speed test and survey of residents’ internet bills showed 
that few people in Cortez get the internet speeds they are paying for, 
and the fees they are paying are inconsistent, with some people paying 
the advertised price for service from companies like CenturyLink and 
TDS, and others getting significant discounts.

“We couldn’t find two people who paid the same price,” Dawson said.

The study’s goal, he said, was to come up with a network model that 
would pay for itself and give Cortez residents faster internet at a 
consistent price.

Konechne said the biggest obstacle to affordable internet in Cortez is 
the accessibility of telephone poles. Normally, installing fiber on 
existing poles is cheaper than burying it, he said, but because many of 
Cortez’s poles are old and don’t meet current fiber standards, it would 
cost about as much to make them ready for aerial fiber as it would to 
install a buried network.

He proposed a hybrid design that would include both buried and aerial 
fiber, in addition to connecting with fiber the city has already 
installed.

Dawson estimated the fiber project would cost between $10 and $14 
million. He added that the usual method of paying for city-wide 
broadband–applying for bonds also wouldn’t be practical in Cortez 
because of the high price of installing fiber. In a scenario where the 
city was awarded a bond to cover the installation cost, he estimated it 
would end up losing as much as $19.6 million over the next 25 years.

“This scenario does not work,” Dawson said.

He also dismissed an open access fiber model, in which the city would 
install fiber and charge other ISPs to use it, as impractical. The city 
wouldn’t be able to charge ISPs like TDS enough to pay for the network, 
he said.

Instead, Dawson and Konechne proposed a system in which the city would 
install fiber throughout Cortez, using funds from a temporary sales tax 
increase of about 1 percent, and connect residents with the network for 
a competitive price. This model, he said, would pay for itself and even 
turn a profit for the city over 25 years.

But the consultants said becoming an ISP would be risky for the town.

Other communities have been sued by existing ISPs for providing their 
own internet services. Providing fiber to the home would also force the 
city government to get involved with a highly technical industry in 
which its members have little experience.

Dawson recommended the town start by conducting a scientific survey to 
determine how badly Cortez residents want broadband, and whether they 
would be willing to raise sales tax rates in order to get it.

He also recommended the government conduct more engineering work to 
determine the precise cost of installing fiber.

If the sales tax increase gets on a ballot and is approved, he said the 
fastest the fiber project could be completed would be in three to four 
years.


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Richard Lowenberg, Executive Director
1st-Mile Institute     505-603-5200
Box 8001, Santa Fe, NM 87504,
rl at 1st-mile.org     www.1st-mile.org
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