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Time to consider risks and costs of the broadband decision


By Guest Columnist
Sunday, August 7, 20161

By Sam Susuras

The city of Grand Junction is to be commended for its recent decision to pause and do more due diligence in its broadband planning efforts. This pause will ensure the city takes the time needed to consider risks and costs to its taxpayers. In particular, City Council members Marty Chazen and Rick Taggart deserve praise for their foresight, prudence, and stewardship over the taxpayers money in calling for this time out. The Daily Sentinel was correct when it said the city s draft plan did what a consultant anticipated: it helped wake up the private sector with the threat of government competition. CenturyLink, for instance, has since offered an expansion of business broadband service in the valley, and Charter Communications has announced its own plan to make it cheaper and easier for Grand Junction businesses to access the fastest fiber network available, with speeds of up to 10 gigs. A quick review of the State of Colorado s Broadband Map demonstrates the widespread availability of high speed broadband services throughout Grand Junction, from multiple providers, confirming that the private sector has put forth a significant effort in offering broadband services in Grand Junction.

Accordingly, the City Council, led by Chazen and Taggart, has recognized the need to re-evaluate its earlier decision to enter the broadband delivery market. They have realized that before diving head-first into such a program they need to answer some important questions including what are the current service providers offering? What are the unmet needs in the community? What would the cost be to city taxpayers if the city undertook this effort? How many people in Grand Junction are actually interested in switching their broadband connection (and email addresses) to a city-owned network? When Grand Junction voters passed a SB-152 override ballot initiative last year, citizens voted for the opportunity to continue to improve broadband availability through public/private partnerships.

Instead, a consultant hired by the city has pressed the council to overbuild at least two existing fiber networks with another redundant, city-owned network, and to enter into competition with the multiple private providers already offering broadband services in the Grand Junction area. In those conversations earlier this spring the consultant alleged that this could be done at no or very low cost to the city and with little to no financial risk. The reality, as seen in other jurisdictions which have attempted this, is that there likely is a cost to the city and its taxpayers and significant risk of the enterprise not achieving its business objectives but what exactly those costs and risks could be is so far undetermined. This is why the City Council was absolutely correct in its decision to slow down and take a hard look at the costs and risks. The city needs to do a number of things to satisfy the requirements of due diligence before proceeding; an unbiased, third party review of the business plan and financial analysis must be undertaken, to start. In addition, a formal and comprehensive needs-and-marketing assessment must be conducted to determine who needs what level of service and what people are willing to pay the previous informal, unscientific and biased survey is clearly insufficient to base such an enormous decision upon. As Taggart said in The Sentinel on July 19, we (the city government) are not in the business of creating demand.

By voting to approve the SB-152 override, the taxpayers gave permission to the city to explore, in a transparent and straight-forward manner, options that are most likely to lead to improved broadband availability. City leadership appears to be headed in the right direction: gathering facts, scientifically surveying the taxpayers, and analyzing the economics, while also exploring public/private partnerships with the existing providers. This wise and prudent approach will help ensure the city meets the goals of expanding broadband service, supporting existing businesses and their employees, and continuing to attract new businesses and incentivize job growth.

Sam Susuras is a former mayor of Grand Junction.


References

  1. ^ By Guest Columnist (www.gjsentinel.com)

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