Citizen's View: Broadband plan raises serious questions
The City of Lake Oswego is considering a public/private partnership to install a fiber-optic Internet network to all homes and businesses. The City would partner with a startup venture named Symmetrical Networks and its Lake Oswego affiliate, Sunstone Business Finance.
The City Council conducted a study session on Jan. 26 at which project concepts were presented. Reasons were presented about the benefits of a fiber Internet network, including:
-- Internet access is now an essential service and the need for greater speed is inevitable;
-- Symmetrical proposes Internet service to the home that provides speeds of up to one gigabit for $59.99 a month per residence, not including TV or telephone;
-- It is proposed that the network will be built if 35 percent of potential users agree to take the service. A professional survey estimated that the so-called take rate would be about 34.7 percent.
Beyond that, very serious concerns arise:
-- Define the bundled price with TV and telephone;
-- If more than 35 percent sign on, Symmetrical Networks would keep the additional profit. If less than 35 percent stay with the network, the City would be obligated to pay $197,000 monthly throughout a 30-year contract, or $2.4 million annually;
-- It is argued that if a private company builds and owns the network, it would be a monopoly, and that without competition, customer prices might be excessive. Therefore, the network should be owned by the City. But companies have already announced plans to provide wireless devices that would provide greater speeds to the user at very low prices (no cable, no fiber). That is competition, so high-speed Internet access would not be a monopoly;
-- Comcast currently provides high-speed broadband access at speeds up to 250Mbps. Comcast already has 45 miles of fiber-optic cable installed here, and plans to offer fiber to all homes and residences by the first quarter of 2017. Consumer prices are not yet announced (current Comcast prices for residences on fiber are very high);
-- Symmetrical Networks proposes that the fiber cables be strung overhead, but that could be unreliable during storms because of our trees; and
-- Symmetrical Networks has never done a comparable project. It is a start-up venture. If Symmetrical fails, what becomes of the network? And what is the Citys continuing obligation to its customers or to the investors that finance Symmetrical Network?
Each of these concerns should be addressed before the City agrees to this proposal.
Dave Beckett worked for more than 20 years as an executive for high-tech companies in the Silicon Valley and Silicon Forest. He currently serves on the Lake Oswego Citizens Budget Committee.