Mayor Steve Shute was serious about campaign promises, and he has taken the initiative to bring a municipally-owned fiber optic cable to Gardner.
In February, Shute and Cheryl Harrison-Lee, city administrator, travelled to Ammon, ID, to discuss that city’s fiber optic utility.
Shute said the trip to Ammon was part of his due diligence to follow up on his promises, “so I took the city administrator and we went to Ammon,” he said.
The trip cost about $2,000, according to expense reports. Shute said Ammon was the only model of this type in the country, and that most fiber companies, such as Google, won’t come to Gardner because it isn’t cost effective.
The possibility of Gardner building a fiber optic cable network was mentioned by Shute during the State of the City address and also in discussion at one council meeting.
Shute stressed that he is still gathering information, and staff is crunching numbers as they look at the Ammon model. He expects a more definitive plan to be on the council agenda in May.
He estimates building the fiber optic network – “backbone” – would cost about $2 million. “That’s a projection, a very large ballpark projection,” he said.
He anticipates using electric utility funds to finance the endeavor and says currently the city has about $12 million in electric utility reserve funds.
“We’re healthy,” he said. “Way to healthy.” Shute said the fund is accumulating, and it either needs to be used or refunded to residents thru a downward rate adjustment.
It cost Ammon, population 15,200, about $1 million to build a 30 mile network. Ammon approved an ordinance in 2009 to establish a fiber optic network, and construction began in 2010. In 2013/14 the city began to provide service to businesses.
A fiber optic cable for Gardner was not budgeted for in 2017 because it hadn’t been considered, Shute said.
“The digital divide is real,” Shute said. Broadband is a draw for economic development.
“Google won’t come here,” he said. “They have stopped their buildout because they were providing the infrastructure. If you separate service from infrastructure, it makes sense.”
Under the Ammon model, Gardner would build the fiber optic backbone and service providers could utilize it.
The homeowner would pay a fee to connect to the network “backbone” – about $3,000 – which they would pay back at about $20 monthly. The fee would be attached to the property until paid off. There would also be a monthly maintenance fee paid to the city, plus any fees negotiated with the service provider.
Shute said because Gardner currently has a electric utility, he believes billing, cable build out and 24 hour customer repair service could be handled primarily with current staff, although the original cable installations may require contracted help, or the addition of two employees.
“This is where a business wants to utilize our fiber to connect to a provider,” Bruce Patterson, Ammon technology director, said. “The city is not a provider of any end service, we only furnish the infrastructure to connect.”
Patterson said Ammon has several private competitors including Century Link, Cable One and some satellite providers. Their rates have dropped since Ammon’s fiber optic provided competition; however, residents pay for lit fiber optic cable, plus whatever fee the service provider charges.
Residents who opt to connect to the city’s cable pay three separate fees to the city:
$3,000 put into a 20 year municipal bond at $16.66 per month
City utility bill of $16.50
And 100 mbps symmetrical service with no data or cap is $9.99 per month up to 1 gbps symmetrical service with no data cap or contract for $25 per month or less.
“This makes the monthly total $43 a month for 100 mbps or $58 per month for 1 gbps internet,” Patterson said. The business rate is slightly higher. The customers can then work with several different providers.
“The city is not a provider of any end service, we only furnish the infrastructure to connect,” Patterson said.
Residential fiber optic service went live in October, 2017 with about 270 customers.
“The city invested just under $1 million in creating the (fiber optic) backbone,” Patterson said. Estimates are it will take about 25-30 years to repay, but Patterson said the city is saving about $3,800 per month for phone lines, internet and other types of connectivity.
The budget for operations in 2017 was $200,000, but Patterson said “getting to the bottom of exactly what is spent to operate and maintain the fiber is tough as we are doing so much.”
The city currently has about 30 miles of fiber optic cable, 50 business customers and 270 residential customers, with more residences expected this year. Support is offered around the clock for business customers and during regular office hours for residential. Billing is handled thru Ammon’s utility department.