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The scope of a possible city-owned internet service provider became more focused Monday as the City Commission’s broadband committee set a goal to build a fiber optics network to cover all of Lakeland city limits.
The proposed service territory of roughly 44,000 homes and businesses splits the difference between two other options, a more deliberate rollout based on pledged participation in individual neighborhoods and one that would cover the entire Lakeland Electric service territory of 112,000 homes and businesses.
To those living within Lakeland Electric’s market but outside the city limits, “We’re not forgetting about you, but we have to start somewhere,” Commissioner Justin Troller said.
Commissioner Stephanie Madden, a member of the committee, said she believed it was up to the city to build a fiber optics network as the major residential providers in the market — Charter and Frontier — had no interest in expanding service.
The committee, comprising the chairman, Troller, and Commissioners Madden and Bill Read, voted unanimously in favor of the middle option plan Monday. Eventually the decision on whether to build will go to the full commission.
The estimated price to complete the 3- to 5-year project — the creation, essentially, of a new utility in Lakeland with infrastructure, leadership and employees — is estimated at $97 million, according to Magellan Advisors, the city’s broadband consultant.
To cover the entire Lakeland Electric service territory, Magellan estimated it would cost the city $227 million and take up to 10 years start seeing revenues exceed expenses.
“I think people are excited for it,” Troller said at the conclusion of the committee meeting. He said he believes the commission can make the case to residents on the basis of economic development and a perceived need to replace a major pillar of Lakeland’s municipal budget — the city’s lease of Lakeland Regional Health Medical Center — at least by 2040 if not much sooner.
Magellan estimated the new enterprise would take between four and seven years to start seeing annual revenues fall below annual expenses, and could provide an estimated $10.5 million in profit that could in part or in whole be paid to the city government as a dividend — lowering the city’s tax dependency.
Saying he acknowledged that “something this large doesn’t sit well with some people,” Troller encouraged his colleagues on the commission — all seven attended the committee meeting — to go out and talk to residents about what they want.
An idea of pricing
Magellan’s business plan also presented potential pricing for the services that would be offered by the new city enterprise: internet, telephone and television.
For internet service only, per month:
- $19.99 for a 25-megabit connection.
- $49.99 for a 200-megabit connection.
- $59.99 for a 400-megabit connection.
- $99.99 for a 1-gigabit connection.
Packages that include television range from $74.99 per month to $164.99 per month, based on the speed of the connection and the number of channels included.
For the so-called “triple play” packages, which includes telephone, television and internet service, prices range from $119.99 per month to $199.99 per month.
“These prices will change as you get closer to implementing,” Magellan CEO John Honker told commissioners Monday. “Pricing in the competitive market is never as static or a fixed number.”
Compared to the incumbent service providers in Lakeland, the prices are “slightly lower than the existing pricing in the market,” Honker said.
Troller said he opposed the privately owned providers’ tendency to attract customers with limited-time deals, gimmicks and variable pricing.
Magellan’s business plan, delivered on schedule Monday, includes guidance on starting the new enterprise from picking leadership to hiring technical support staff members. What it lacks, however, was details on deployment and details about financing, issues dependent on decisions made Monday.
The committee is set to meet again in two weeks after some of these details are worked out.
Following are two documents: Magellan’s presentation today summarizing their proposal followed by the latest draft of their business plan for Lakeland:
Draft business plan:
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