Longmont studies cost of broadband network
Last Updated: 15:09 May 9, 2013
The findings of the study are scheduled to be discussed by elected city officials in a study session Tuesday, May 14.
The project would break even in 10 years, according to the study, which is posted on the city of Longmont's website www.ci.longmont.co.us/.
Other financial scenarios put the build-out price at about $41 million and the break-even point at 11 or 12 years, according to the study, which was conducted by Uptown Services LLC.
Uptown Services principal Neil Shaw in Boulder referred specific questions about the feasibility study to Vince Jordan, broadband services manager at Longmont Power and Communications. Jordan did not immediately respond to requests for comment about the study. Uptown has a $24,995 contract with the city of Longmont to come up with a business plan that includes all financing options to complete a broadband network, Jordan has said in the past.
Financing options could include government bonds, which would require approval from voters, and certificates of participation, a government finance instrument that would not require approval from voters, according to a memo from Tom Roinotis, director of Longmont Power and Communications, and Jordan.
In general, certificates of participation are lease payments bought by investors and secured by city property, according to the memo. The other two types of bonds being discussed would have better ratings than certificates of participation, the memo said. Revenue from customers would be used to pay back the indebted amounts, according to the memo.
The feasibility study also gives details of costs to build pieces of the network, specific scenarios about the number of employees needed to staff a new broadband utility and a survey of 400 Longmont residents on questions about Internet, phone service, video service and "bundling" of services.
Some 68 percent of Longmont residents said they would definitely or probably switch their Internet service from another provider to the city's broadband network, for example.
The city's broadband network was built in 1997. Longmont voters in November 2011 approved a measure to allow the city to offer broadband services. That vote was necessary after the Colorado Legislature in 2005 passed a law that prohibited cities from offering broadband services without going to a public vote.
If city council members approve some form of financing for the project, a full broadband build-out could be available to the approximately 4,000 companies in Longmont in the future, Jordan has said. About 1,280 companies and 1,100 homes currently are within 500 feet of the city's existing network.
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