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Broadband initiative doesn’t make sense
An Opposing View
Joe O’Donnell
Colorado
April 11, 2008
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I have been asked many times in the last few days what is this election all about. Exactly what are the consequences of the election?
If the ballot question is approved by the voters the city will proceed with a study to determine if it is financially feasible to spend approximately $12 million and to hire up to 10 new employees to install and maintain a fiber-optic connection to every home and business in Glenwood Springs and parts of Garfield County.
This system would compete with the services now provided by Qwest, Comcast and the local internet providers. You may or may not like the service you are receiving from Qwest, Comcast, and your current internet service provider, but do you believe the city government can do a better job at less cost?
In 2002 the City Council approved and had installed in the city a Broadband System. This was done as the major players in the high speed internet business at the time had made it clear that they were not interested in expanding into our city. Times have changed and the major players in the high speed communication now are here.
The current Broadband System is losing about $185,000 a year. Each year the deficit has been reduced as more subscribers join the system. All revenues lost by the Broadband System are made up from the city’s electrical service — your electrical bill.
During the Council’s public discussion concerning up-grading the broadband system, the City Manager spoke about the risk involved in spending $12 million to compete with services now being provided by private enterprises. He stated that it is important to understand that, if the city decides to proceed, it is not without risk (see City Council minutes of Jan. 3, 2008).
To provide the needed revenue to support the system the city will have to provide fiber-optics services to at least one third of the homes and businesses in the city and adjoining Garfield County. The big question is: can that be done? Will that many homeowners and business owners be willing to change the service they are now using? Any financial losses to the city caused by the expansion of the Broadband System will be paid by those who receive their electrical power from the Glenwood Springs electrical system and/or the Glenwood Springs taxpayers. Homeowners and businesses that reside outside the area served by the Glenwood Springs Electrical system will benefit from the Broadband System without any financial risk.
The City’s business plan appears to estimate the annual operating cost at over two million dollars a year. The question voters must ask is: Will there be enough subscribers to pay the cost of building, operating and keeping the system technology current without a subsidy from the taxpayers?
The city’s business plan discusses the competition the city’s proposed Broadband System would face from the private enterprises currently providing the city with phone, cable TV and internet services. “It is likely that incumbent service providers may also elect to upgrade systems and adjust service rates in an attempt to decrease the effects of competition on the erosion of their customer bases” (UTI, Inc Tab Four, Page Four).
Is this financial risk you want the city to take?
There are many improvements our city needs: street and intersection improvements, relocating the waste water treatment plant, South Bridge, a performing arts center, redevelopment of the confluence area, the list goes on. Do we need to spend money on a Broadband Network that could be out of date when it is finished and neglect other demands of our city? Does the city need to compete with private enterprises? Does the city need to spend $12 million to save $185,000?
It is up the Glenwood Springs voters to decide how the Council and staff will proceed with the Broadband System. Where do you feel the city’s priority should be? Please vote.
Joe O’Donnell is a Glenwood Springs resident and former city council member.
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