Citizen's View: Creating city-owned fiber network simply is not worth financial risks
Our city is considering building a fiber optic cable network. This is not a good idea and should not proceed. Here is why.
First, the city could be at risk for millions of dollars in payments to the company that builds the network. About one third of the households in the city would need to sign up for the fiber optic network to be viable. That is more than 5,000 households. The exact amount of dollar risk is unknown at this time, but it would certainly be in the millions of dollars. Where would the city get this money?
Our current city budget is certainly tight. City costs are rising, and we have a big PERS bill coming. Not a lot of extra money sitting around! We already found out what happened to the cost of a water project, and it wasnt pretty. Do we want another financial debacle?
Second, if this is such a good idea, why isnt it being done everywhere? Because of the risks. The city of Provo, Utah, created its own network, and it wound up costing them at least $35 million. It did not do well, and they sold it to Google for $1. Provo is three times the size of Lake Oswego. If this is such a good idea, why wouldnt cities throughout the country be doing it? They are not. Is Lake Oswego silly enough to do something a lot of other cities have ruled out?
Third, our city should not be competing with commercial enterprises of any type. Cities are not equipped with the skills and capabilities to compete. Cities are monopolies, not competitors. Comcast, which covers most of our city, has plans to increase Internet speeds and is doing so in other areas. Does the city really think that the existing providers will just stand still and let the city take away their business? Not likely!
Fourth, our city codes currently require all utilities to be underground. But to be economically viable, the fiber cable would require a waiver allowing it to be installed above ground. How will the city handle future requests from other utilities? If the city makes them go underground, will that be fair?
Fifth, our citizens do not really understand what getting fiber optic cable for $60 a month means. Many think they will get everything they currently get from their provider for $60, versus the $150 or more they now spend. Wrong! The city fiber would be a dark cable, which means there would be NO content just a pipe to the Internet. A household would get fast Internet, but nothing else. Homes connected to the citys network would still need the current provider for TV, cable channels and any other services they have. In other words, there would be two providers one for fast Internet and another for all the content.
Some say you could use Apple TV and an antenna, etc. But that is not easy to set up for everyone, so you would likely have to pay someone to do it. Your total monthly bill may decline, but by how much?
Lake Oswego prides itself on being a smart city, with above-average, better-educated households. Is Lake Oswego really better educated enough to take on the risk of a city fiber network?
Maybe we should think again.
Gerry Good is a Lake Oswego resident and a member of the Citizens Budget Committee.