GLENWOOD SPRINGS — Expanding the city’s fiber-optic network is not a necessary or justified risk in light of other city priorities, and taxpayers would foot a hefty bill if the expansion fails financially, former City Councilor Joe O’Donnell said Thursday.

“My biggest concern with this whole thing is: Does the city really need to take the risk and hope they make money out of the deal?” he said. “I have the utmost respect for (city manager) Jeff Hecksel and (Mayor) Bruce Christensen. I think they’re doing a hell of a good job, but I don’t think this is something the city needs.”

A ballot question mailed to Glenwood Springs voters asks for permission for the city
to provide Internet, telephone and cable television services. It’s a step toward a
proposal to sell those services directly to homes through fiber-optic cables. It would
expand the current fiber-optic network installed in 2002 that only provides a direct
fiber-optic connection to businesses in certain areas. Connections would be
available everywhere in the city and even a bit beyond in some areas. The current
network has lost almost $200,000 a year for three years and more was spent in
previous years.

Supporters see the expansion, which would compete with existing service providers,
as a way to make the network work financially while providing better services and
more choices to consumers and diversifying the city’s economy. Critics say small
municipalities can’t keep pace with the technology field. They worry the business
venture won’t work and the city will end up wasting large amounts of taxpayer dollars.

O’Donnell questions whether the city can compete with companies like Qwest and
Comcast. He said the 323-page business plan pitched to the city by UTI Inc. and
Alcatel Lucent seems to estimate an annual operating cost of about $2 million a year.
He wonders if there will be enough subscribers to pay for it.

The plan contemplates a 20-year, $12 million bond to pay for expanding the network
over two years. The plan is to repay the debt with user fees on Internet, television and
telephone services, and not with tax dollars.

O’Donnell said there’s a huge list of city improvements that should come before
risking money on the expansion, such as street and intersection improvements,
relocating the wastewater treatment plant and building a performing arts center.

Mayor Bruce Christensen, who supports the proposal, said the April 22 vote has
nothing to do with the financial aspects of the plan and only authorizes the city to
proceed with determining if the expansion is feasible. He expects the business plan
to be refined and detailed market analysis to be done. After that, there would be real
numbers and hard facts to vote on.

“If we decide to incur debt on behalf of the city, all of those facts will be fleshed out
and voters can take the opportunity to decide,” he said. “We would not actually build
the system until we knew that it stood a very, very great chance of success.”

Another vote would be required later — maybe in November — to authorize the city
to enter into debt. Christensen said the $12 million cost could be lowered by outside
funding sources. For example, the city could get a private company to invest in the
network in exchange for rights to use it.

Chris Dobbins, general manager of the Roaring Fork Internet Users Group, would
vote for the proposal if he lived in Glenwood. He believes it will allow the city to build
out its network to where its finances are back in the black. The expansion could raise
property values, draw more businesses to Glenwood and meet increasing demand
for more bandwidth in the future, he said. And it would allow consumers to get Internet, television and telephone services and technical support directly from one
local source.

Christensen added that the expansion would bring a far wider variety of cable
television programming to Glenwood at a potentially lower cost.

Contact Pete Fowler: 384-9121

pfowler@postindependent.com




Post Independent, Glenwood Springs Colorado CO