El Paso County is one of 22 local governments considering opting out of Senate Bill 152, a law passed in 2005 that prohibits governments from engaging in the telecommunications industry.
Called Initiative 1A, the goal is to allow the county to enter into public-private partnerships that would expand broadband and internet services to the rural parts of El Paso County — places that either don’t have enough people to make it worthwhile for private companies to expand fiber optics to the area or that haven’t yet been served by local broadband businesses.
Since the law passed, cities and counties around the state have opted out, realizing the need for government investment to attract and retain local businesses that need reliable, fast broadband coverage.
Most of the places that have already opted out are rural areas that wouldn’t be lucrative for telecommunications companies to invest the infrastructure to provide broadband services. Comcast, for instance, provides services in Colorado Springs, but doesn’t reach all of El Paso and Teller counties. They have no official stance on the initiative, although they have opposed it in previous years.
“Most of the other SB 152 measures are outside our footprint,” said Leslie Oliver, external communications director for Comcast in the Mountain West region. “But we do serve El Paso County and we’re hoping to work with the city and the county to provide accessible, reliable broadband services without being heavily taxed. That’s always been our goal.”
Oliver said the company was getting ready to increase its broadband speeds to 1 gigabyte, making high-speed internet available to all its local customers.
“Our focus is on the most reliable and the fastest service across our footprint in Colorado,” she said. “But we recognize that people outside our footprint need access as well — and broadband deployment to those areas is important. We’re interested in making sure that the market is fair and competitive for everyone.”
Some cities have gone beyond public-private partnerships once they opted out of SB 152. Glenwood Springs was the first Colorado city to decide to opt out of the state law. And in 10 years, the tourist town’s utility company has entered the broadband business.
“Most cities are doing public-private partnerships,” said Bob Farmer, who administers Glenwood Springs’ broadband services. “Ours is a hybrid. We decided early on that we wanted to provide the service wholesale. We wanted to have direct sales and provide the bandwidth to the community and to our partners.”
Farmer said the switch came as a result of needing to meet community demands.
“The local businesses were so focused on wireless communications, they weren’t interested in fiber optics or in broadband,” he said. “Our partners just weren’t selling fiber. We decided if we were going to do it, we had to do it directly.”
So the city invested $3.5 million and laid fiber throughout Glenwood Springs. It’s cheaper and faster than what’s available from the private sector.
“It’s been very positive,” he said. “We have more local control, and when there are issues, we get them resolved quickly. From a financial standpoint, we definitely want a return, but we aren’t necessarily interested in making huge profits.”
Fort Collins passed a similar measure last year, and is working to figure out what their partnership with industry might look like. They are also considering wholesale models, where the city pays for the build-out and charges fees per connection. Other options are paying for the infrastructure and leasing it to a retailer, who then would provide the service to customers.
The cost is one hurdle: How much to charge customers? According to information from the city of Fort Collins, lease rates are too low to pay off the long-term debt and the retailer price levels of $90 a gigabyte might not be competitive. However, the concern with leaving it to a retailer is “cherry-picking,” choosing only lucrative areas, the city said.
The overall goal is local control over telecommunications, according to industry experts. While Colorado Springs Utilities might not be selling broadband services in the future, Initiative 1A allows the county to enter into public-private partnerships that could expand services to every resident — not just those in the most profitable areas.
And the two local counties aren’t alone — last year, more than 50 communities ranging in size from Longmont to Westcliffe (population 568) — decided to opt out of SB 152.
And as the telecommunications industry focuses its attention on mobile and wireless services, more local governments might be interested in improving broadband for their business communities.