Lake Oswego voters will be asked to decide fiber network's fate in November
Divided City Council cites concerns about finanical risks, wants residents' advice before proceeding
City councilors voted 4-3 Tuesday night to delay making a final decision about launching a municipal broadband fiber network until voters can make their feelings known in November.
Councilors said they want at least 55 percent of voters to indicate that they want a City-sponsored system before moving forward with the project, citing concerns about potential financial risks if not enough subscribers sign up for service.
The issue now will appear on the Nov. 8 ballot as a non-binding advisory vote.
Much of Tuesday nights council meeting was devoted to a study session on the broadband issue. Last week, Mayor Kent Studebaker told The Review that the session had been called for two reasons: to discuss concerns raised by several council members, and to address the large amount of feedback both in favor of the project and in opposition that the council had received.
City Manager Scott Lazenby said he also hoped the session would allow the council to discuss the underlying philosophical question of whether the City should be providing Internet service as a utility in the first place.
The City has already selected local startup Symmetrical Networks as its partner to build and operate the network, which would provide gigabit-speed Internet service for around $60 a month. But the detailed contract negotiation process has not yet begun. Lazenby told The Review hed rather have a clear consensus before moving forward with that process, which will likely be expensive for both parties, and he reiterated that opinion at the work session Tuesday, asking councilors to focus on concerns and how to address them.
Councilor Skip ONeill began the discussion by asking if, in general terms, the council members were all in agreement that broadband is a good thing for the city. Every council member said they did agree, and there was also a general consensus that fiber Internet should be considered a utility. But the council members sharply disagreed about whether the current plan was the correct way to move forward.
Councilors' biggest concerns surrounded potential financial risks to the City.
Symmetrical Networks has estimated that roughly 35 percent of Lake Oswego households would need to sign up for broadband service to make the network profitable, so the company and the City have already agreed that construction will only move forward if that many people enroll during an advance sign-up period. But several councilors said they were concerned about a scenario in which 35 percent of residents sign up initially and then a significant portion of them drop out after the project is already underway.
That would leave the City and taxpayers on the hook to pay for the difference.
Studebaker argued that such a scenario could happen if competing providers such as Comcast or CenturyLink decided to undercut the Citys pricing, and Councilor Charles Collins said he thought the City didnt have enough information about how other providers would respond.
The emails Ive read are half and half at best, Collins said. My preference would be to slow down, listen to the citizens and listen to the competition.
Councilor Jackie Manz said shed heard similar concerns from citizens, quoting one person who asked her, If this is so good, why are there not other providers moving into the market?
ONeill and fellow Councilor Joe Buck both replied that a low-cost fiber network would ordinarily not be workable, but that the unique public-private partnership proposed by the City would make it viable. ONeill said he was confident (the City) could deliver, but he also said hed heard a lot of negative feedback from citizens and felt obligated to make sure any potential financial risks were mitigated.
Councilor Jeff Gudman also raised the issue of undergrounding, arguing that building a new network on telephone poles as proposed would undermine the Citys longstanding policy of moving utility lines underground whenever possible. And Manz said she thought the process of exploring the fiber option needed to have been carried out with more citizen input.
Its the process rather than a particular proposal, Manz said. From day one, I think the process should have happened in a different manner to get us to this point.
Arguing in support of the project, Buck pointed out that there are financial risks to citizens even if the City does not build the network, because Comcasts prices for fiber service are several times higher than what the City plans to offer.
Though they continued to disagree on the correct direction for the project, most of the councilors agreed that a greater focus on public outreach and education would be required in the future, and that a number of public misconceptions about the project had cropped up.
Studebaker then floated the idea of sending the issue to voters, and asked City staff if doing so would be an option. Lazenby said he thought it would indeed be a good way to resolve the ideological debate, and Symmetrical Networks chairman and co-founder Kevin Padrick said his company would be willing to wait for voters to decide.
Our role is to provide the means in terms of construction, financing and operations, but because it is a municipal fiber broadband network, it is critical that the citizens be in favor of proceeding with their network, Padrick told The Review on Wednesday. We welcome the opportunity to provide information so the citizens of Lake Oswego can decide whether they want the benefits of a municipal fiber broadband network after considering all the information.
Lazenby and Padrick both said the more expensive, legal half of the contract negotiation process could wait until after the vote, and that the City and Symmetrical Networks could simply have a good-faith agreement about the general terms of the deal that would be described on the ballot.
Studebaker also suggested the 55-percent threshold as a safety margin when considering the results of the vote. Most of the council members appeared to agree on that number, although they did not directly vote on it.
Collins, ONeill and Manz voted with the mayor to send the issue to voters; Buck, Gudman and Councilor Jon Gustafson all strongly objected to the decision. As an alternative to the public vote, all three opponents advocated raising the 35-percent sign-up threshold to add a safety buffer and mitigate the financial risk.
Gustafson said the City has already spent money to conduct a phone survey, and that those results which showed that 79 percent of Lake Oswego citizens would support a City-owned network "if the price was acceptable" should be taken as an accurate indicator of public support. And Buck contended that the advance sign-up phase would be a better indicator of support than an advisory vote in the fall.
If were really worried about the risk, then what we want is a deposit and a commitment, Buck said.
Gudman also argued that the vote wouldnt lead to a greater council consensus. With so many of the contracts specific conditions listed under a single yes-or-no vote, he said, council members would be left with their own subjective interpretations of the result. He also expressed concern that since the precise terms of the contract have yet to be determined, we may end up with something different in front of us for where we want to go when the measure appears on the ballot.
Well go down the same rabbit hole that we did with the West End Building, he said.
The study session and the decision to send the issue to voters both received positive feedback from people involved in the broadband debate.
I found last night's discussion very collegial and thoughtful. I was particularly pleased that the councilors all agreed that broadband fiber is important to our community, said Duke Castle, co-founder of the Lake Oswego Sustainability Network and a broadband proponent. The question then became how do we do that in an affordable and judicious manner for the whole community.
"Putting what amounts to a $71 million decision in voters' hands is a good move, said Gerry Good, a member of the Lake Oswego Citizens Action League, which opposes the broadband initiative.
But not everyone was happy with the result. In a public Facebook post on Wednesday, Buck called the decision to put the issue on the ballot a political stall tactic and questioned why the council would choose to ask citizens about fiber broadband yet again, despite the widespread support revealed by the previous survey.
Sometimes, serving on the council is like staring at a perpetual spinning wheel of death, Buck wrote in his post. Fiber broadband is 40 times faster than what we have now, but this council is moving there at a dial-up pace. Loading loading loading .