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City’s broadband is bad business

Stan Orr

Dear Editor,Let me get this straight. According to the lead article in the Post Independent on Monday, Aug. 12, the city is creating a high speed Internet system to compete with private industry. They paid a consultant $1.6 million to determine if it was feasible (not bad work if you can get it). We now learn that the final tab will be around $3.5 million. We know the city chose to remove the project from competitive bidding because of a decrease in sales taxes. We know that currently, private industry’s desire to invest millions to build such a system has been tepid at best. We know that other cities have tried to make Internet a public utility and failed.There must be a reason why the city leaders are willing to spend $3.5 million even before turning on the light switch, and by the same token, a reason why private industry has been less than enthusiastic to build this level of service.I think I know, but let me make sure I understand the math. According to the 2000 census, there were 7,736 Glenwood residents, approximately 2,100 of which are students in the public schools. I assume this means that there are roughly 5,500 potential residential customers. I also assume that there are on average two persons, not including children, in each home, so we now have, realistically, about 2,750 potential customers. However, according to the state there is about 3 percent unemployment in the area. Don’t think those folks will want to pay for that high speed access, so let’s reduce the number to about 2,660 potential customers. Of that number, one must extrapolate, based on Internet industry trends, a fair percentage of residents who will not want to drop the good old $20-per-month service to utilize this service.Let’s assume, rather charitably, that about 25 percent will, or about 650. Now let’s throw in about 100 businesses that might use the service (to be charitable again). By my calculation, that means that the cost to install this service will be about $4,800 per user. Just to recoup the cost of the installation, based on pricing provided in your article, will take eight years. Obviously, this does not include the cost of the equipment each person will incur at installation.It is no wonder that Qwest, AT&T, or some other huge company has not pursued such a project. Doesn’t sound like to me it is a prudent strategic investment. The current providers of high speed access – Sopris Surfers and Crimson Wireless – despite having provided high speed access for over a year (and it works real well, I might add, without any tax supported revenues), still do not have the number of customers as noted above, even though the two companies have the entire market share for this service.The city’s response has been to bully its way into a market that should be run by free enterprise and not be a tax supported boondoggle. My understanding was the city would only be a reseller. All of the rhetoric from city officials in your article runs contrary to that notion. It’s easy to see what’s coming next. A taxpayer bailout. Unfortunately, it appears some of Glenwood’s citizens may be part of a bailout for a system they will have no access to.I am curious what role other cities’ experiences played in this city’s scan of the environment. I am also curious how city leadership makes a decision not to use competitive bidding because of a decrease in revenues. I admit, you lost me on that one. As I see it, this isn’t about what is legal. It’s not about letting someone finish what they started. It’s about doing the right thing during a time when tax revenues are dropping.Mr. Copp and his staff have a fiduciary responsibility to guide the council in making sound financial decisions. The council has a responsibility to their constituency to make sound decisions, assuming they are not working in a vacuum. Unfortunately, this project doesn’t sound like sound fiscal management based on the environment and best practices to me.We have a new Community Center, new municipal operations building, and new city offices, all in a short span of less than three years and at a cost of millions to the taxpayer (tourists, right?). Mr. Copp should be pleased knowing he has built a magnificent legacy. I commend him for a job well done.Perhaps now I have a better understanding of why the city is throwing a $3.5 million switch for a product that industry experts say is not being embraced by the public. After all, legacies are an important part of who we are.This much I do understand. If the top officer of a nonprofit made a similar decision based on what appears to be known about the project, he/she should be searching for a new job.Stan OrrGlenwood SpringsEditor’s Note: The Glenwood Springs broadband project is being paid for from Electric Department revenues.


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