Half a billion dollars -- that’s about what it would take to build a municipal fiber network in Seattle, and the other numbers aren’t very encouraging, either.
The city announced on June 9 the findings of a broadband study conducted by CTC Technology & Energy -- findings that mean that where broadband is concerned, the city will look elsewhere, for now, said Chief Technology Officer Michael Mattmiller.
The survey, which the city paid $180,000 to have completed, found that in addition to a $480 million to $665 million price tag for a fiber to the premises (FTTP) broadband buildout, the project’s fiscal sustainability would require a citywide take rate exceeding 40 percent at a monthly service fee of $75 -- an unlikely scenario given that even the nation’s most successful municipal providers, like Chattanooga, Tenn.’s EPB, achieve a broadband take rate of less than 35 percent.
The city’s broadband goal remains to provide the public with “equal, affordable and competitive broadband that approaches a gigabit standard,” Mattmiller said, but the findings of this report show that building a municipal network would put the city’s general fund at risk.
“It presents too much risk to the city," he added, "but that said, we’re going to continue looking for other models and other state and federal funding opportunities, which could cause us to reconsider."
Other approaches to improving broadband in Seattle include encouraging the private sector, as companies like CenturyLink and Wave expand gigabit services to an expected 125,000 homes by the end of the year.
And while taking on municipal broadband alone may be too big a risk, Mattmiller said, the city is keeping open the possibility to take on private partners that could make such an endeavor less risky.
“The broadband market has been changing incredibly fast just in the past six months, since the president mentioned the need for strong broadband access in his State of the Union address," he said. "And we’re starting to see some interesting joint ventures that allow cities to meet their policy objectives around equity and around economic development through broadband."
Upcoming broadband funding from the federal government is expected to be targeted toward the development of rural broadband, but federal stimulus could be made available to large cities like Seattle too. Chattanooga’s famed network received $111 million from the Department of Energy in 2009 for infrastructure upgrades initially designed to support a smart energy grid.
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