Centennial voters will rule on fiber network

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“Come on baby, light my fiber!”

That's the catchphrase promoters are using in campaign literature to convince Centennial residents to vote yes on ballot measure 2G.

The Citizens for Centennial Foundation, which is sponsoring the ballot measure and also backed the city's home rule charter campaign, says a yes vote on 2G will bring “more choice, faster speeds and lower prices” to Centennial Internet users.

“2G is about self-determination and regaining control of our fiber network,” said District 3 Councilman Ken Lucas, who is leading the council charge in trumpeting passage of 2G.

In a nutshell, the ballot question asks voters to restore the city's legal right to explore opportunities to partner with the private sector to develop its existing fiber-optic network. That right was taken away from cities like Centennial when state lawmakers passed a controversial bill in 2005.

Comcast, CenturyLink and AT&T have lobbied against the ballot measure, which they say represents an indirect attack on existing service providers, who've built their own fiber optic networks at no cost or risk to taxpayers and should not have to compete with new players who could be allowed to tap into Centennial's existing fiber and conduit network.

But passage of 2G, Lucas said, would be just the first step in the city's exploration of “developing more opportunities to better use” its existing fiber network.

Analysis needed

If voters OK the ballot measure, Lucas explained, a business plan would be drawn up and a feasibility study conducted before a final decision on whether or not to move forward was made by council.

“As a `contract model' city, we already put everything out for competitive bid,” said Lucas. “As the economy changes and our needs change, being able to put contracts out for bid gives Centennial the biggest bang for our buck. The 2G ballot initiative is an extension of this model.”

The city council approved the ballot language for 2G by a 9-0 vote on Aug. 19. Lucas said the unanimous council vote was meant to send a message: “Citizens should take back their right of self-determination from the state” because basic broadband service is not sufficient for 21st-century Internet users — “and especially businesses — which require faster connections.”

“The council feels strongly that the voters should determine what to do next with its existing fiber network, not current providers,” said Lucas.

“The average home in Centennial currently has between 5 and 30 megabits per second of service,” said Dave Zelenok, Centennial's chief innovation officer.

Zelenok explains that one gigabit equals 1,000 megabits and that if Centennial, by teaming with private partners, can provide “gigabit or better” service, it would effectively boost broadband capacity “by a factor of 200 times.”

“Businesses tend to locate where their needs can be met,” Lucas said. “Having gigabit bandwidth will give Centennial a competitive edge over cities around us.”

Chattanooga model

Zelenok cited Longmont and Chattanooga, Tenn., as examples of cities that have successfully developed their public fiber-optic network. “Ten thousand jobs came to Chattanooga after they became a gigabit city,” he said.

In 2008, the city began installing an advanced telecom network as part of a public works “transportation and street light optimization” program, which Zelenok said has enhanced connectivity between city assets, including traffic signals, weather stations and other public facilities.

The 42-mile-long network was financed primarily through grants and contains 96 separate strands of fiber-optic line encased in half-inch-wide conduit.

“Right now, we're using just one strand,” said Lucas. If 2G passes, Centennial would “reserve one to three more (strands) for city use and the rest could be open to use by potential private partners.”

More than 80 percent of Centennial's businesses are located within a half-mile of the city-owned fiber-optic line and more than 50 percent of residences are also within a half-mile of the network.

If 2G passes and the city decides to move forward with a public/private development plan, Lucas said Centennial would make its existing, so-called “middle” mile of fiber line available to private telecom companies, which, at no cost to the city, would build out the “last mile” of cable to connect homes and businesses to “competitively priced, gigabit service.”

Up to voters

But first, voters must approve the ballot initiative, which would give the city the ability to circumvent Senate Bill 05-152, a 2005 state law enacted to stop local municipalities from developing existing public fiber-optic infrastructure.

But a provision in SB 05-152 does allow a city, through passage of a citywide referendum, to regain control of its telecom infrastructure and to partner with private companies to develop that infrastructure.

If the telecom initiative is approved, Lucas said the city is likely to spend “about $50,000 to $100,000” doing its due diligence before a final decision is made.

For a city with a healthy balance sheet and nearly 10 times more in reserves than is required by law, spending $100,000 to explore the possibility of developing a city asset makes sense to Lucas, who worked in the venture capital and private equity markets before retiring several years ago.

“Right now we've got an underutilized asset,” he said.

But earlier this year during a public hearing on the proposed ballot initiative, AT&T Colorado President Bill Soards told city councilors that, historically, municipal fiber-optic networks have been “less than successful.”

Soards pointed out that his company has invested millions of dollars in the Denver area, including in Centennial, and sees the city's plan as a competitive threat.

“I find it interesting that, as part of the rationale, this somehow is going to increase competition or be good for business,” Soards said. “The business models of dozens of telecommunications companies in Centennial are at risk of being undercut by free or significantly subsidized networks.”

Lucas disagrees. Comcast and CenturyLink “have a duopoly in Centennial right now,” he said. “We have plenty of fiber, so lots of companies could come in and compete.”

Passage of 2G, Lucas said, is “simply the first step in taking our right back from the state. Then we can have an intelligent discussion about where we go from here.”

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