City leaders will have a chance to show how far they’re willing to go to make Lakeland a “gigabit city” in a series of meetings that begin with a workshop at 4 this afternoon. In advance of that meeting, here is a quick look at seven options for high-speed Internet offered by the city’s broadband consultant. (Consultant’s report | Powerpoint summary)
Magellan Advisors, which has an office in Clermont, was asked to make recommendations about how the city of Lakeland can capitalize on Lakeland Electric’s 330 miles of “dark fiber” to extend the telecommunications capacity of local schools, businesses and residents.
“This is comparable to the creation of Lakeland Electric,” Commissioner Keith Merritt told The Ledger, urging fellow commissioners to be bold.
Gigabit Lakeland, a citizens advocacy group, welcomes the report as a guide to a “structured, phased approach” to an eventual public utility, and urges supporters to sign a position and show up at a commission meeting at City Hall at 9 a.m. Monday.
The Magellan report gives commissioners a list of seven options, from which several will likely be chosen. Here is a summary from least intensive to most:
Formalize Broadband-Friendly Policies
The report lists several policies that would reduce the cost and bureaucracy for companies that want to expand broadband penetration. Among them are installing fiber-optic conduit whenever the city opens trenches for roads and other projects and maintaining a system to track broadband installations. The effort would take greater cooperation between city departments and is estimated to cost $100,000 a year.
A city wifi network that currently serves government buildings, parts of downtown and parks could be expanded into low-income neighborhoods to reduce the “digital divide.” The report acknowledges there could be some “slippery slope” complications and notes that the return on investment would be more in the realm of socio-economic improvements than dollars.
Connect Public Schools in Lakeland
The city could bid to become the “E-Rate” connectivity provider for the more than 50 public schools within the Lakeland Electric coverage area. With federal subsidies of up to 80 percent, the program could “keep money in the local economy and grow the network to benefit the larger community.”
Expand Dark Fiber Services
Lakeland could formalize and market its service that provides unused fiber optics capacity to large organizations such as Lakeland Regional Health. A private partner could be contracted to provide the “last mile” to customers, introducing a new player into the market and generating a revenue share for the city. A benefit would be that no investment would need to be made before customers join.
Launch as an Open-Access Provider
Rather than providing “dark,” or unused, fiber optics, this scenario would see the city become a wholesaler to providers who would in turn offer “lit fiber” connectivity to businesses. While the city would be responsible for managing an open network, it wouldn’t maintain a customer service burden. Services would likely start in the downtown core and in the business parks surrounding Lakeland Linder Regional Airport. Initial capital is estimated at $4.4 million, with positive net income by year seven and $650,000 free cash flow in year 10.
Launch as a Retail Services Provider
The city would offer voice Internet services faster than cable or DSL to local businesses and institutions, as well as connectivity between an organization’s local branches. Initial service areas would be downtown and near the airport. Monthly Internet costs to businesses would range from $110 for 50/10 Mbps to $800 for 1000/50 Mbps. Initial capital is estimated at $4.4 million, with positive net income by year five and free cash flow of $1.6 million over 10 years.
Launch as a Fiber to the Home Provider
The city would provide any combination of Internet, voice or television service to businesses and residents in competition with providers such as Brighthouse and Verizon. Assuming rates that would attract 45 percent of potential customers, the consultants project initial capital of $220 million to $270 million, with positive net income by year seven and free cash flow of $89 to $98 million over 10 years.
The Magellan report