Consultant: Lakeland Well Situated to Build Internet Provider

fiber opticsUrgency inflected a meeting of the city’s broadband task force Thursday, and though little new information emerged about the ongoing process to create an internet service business plan, the city’s consultant assured commissioners it was on schedule to meet the Aug.5 deadline.

That business plan, being created by the city’s broadband consultant, Magellan Advisors, is expected to answer many of the big questions and outline the what-ifs if the city decides to undertake the creation of a new public utility.

Magellan CEO John Honker said the six-month, $139,000 fact-finding and planning process had been accelerated on account of the city’s wishes and when completed, it will have information about expected investment costs, pricing, products, projected market penetration, return on investment forecasts and a slew of other information.

But Honker did offer some top-level market research data completed earlier this year, and said Lakeland was in a good position to successfully build a retail internet service provider.

On a scale of 10 measuring feasibility, Honker said Lakeland was a “7.5 to 8.”

“Because you have a lot of infrastructure (and already built a 330-mile fiber optics backbone network) and a good demographic, it’s an opportunity above the median, definitely,” Honker said. “Many communities your size are either demographically challenged or plant (infrastructure) challenged.”

Commissioner Justin Troller urged his colleagues to discuss the final report as soon as possible, on Aug. 5 if possible. The third-term commissioner is nearing the end of his 12th and final year on the board and time is running out for him to have a vote on a project he says will be as important as the decision to found Lakeland Electric.

Opening a city-owned internet service provider will put Lakeland’s technological future in its hands — rather than in control of major telecoms who have been reluctant to expand internet speeds and access in Lakeland — and provide a number of benefits to the city, Troller has said on multiple occasions.

“I doubt they’re going to do the investment,” Troller said of the retail internet service companies Thursday. “They told us years ago they’re done investing in our community, we’re a secondary market.”

Chief among the benefits, Troller says, is giving Lakeland’s residents and businesses access to gigabit-speed internet service, roughly 10 times faster than top-tier residential services available from private companies operating in the city today. It will also provide a non-tax source of revenue for the city in the same way Lakeland Electric pays a dividend for the operation of the government.

On top of that, the service can be operated profitably at a lower cost, Troller contends.

The city’s largest risk in creating a municipal broadband utility will be competition from the incumbent providers, most notably Spectrum and Frontier Communications.

“There are risks in this business,” Honker said. “This is a competitive business. There are risks in any competitive business.”

As part of the planning process, Magellan surveyed thousands of Lakeland residents and hundreds of businesses by email. According to the company’s findings, based on 850 residential responses, 49.9% of consumers are content with their internet provider, 34.6% are not satisfied and 15.5% have no feelings.

Among the 149 business customers that responded to the survey, 45% were satisfied, 37% were dissatisfied and 18% had no feelings, Honker said.

The survey also found that 3% of residents do not have internet access at home, with another 4% relying on cellular devices for access. Of those 3 percent, a little more than two-thirds did not have it because of cost, Honker said.

The number of surveys answered provide a 95% confidence interval and a 3% margin of error, Honker said.

More in-depth market information is being reserved so as not to tip off incumbent providers, Honker said. It is not clear if that information will be shared publicly in the future.

“We’re not funding this to help all the competitors with their problems,” Commissioner Scott Franklin said.

In the meantime, Honker and commissioners said the incumbent providers will be taking steps to limit the threat of a government-run internet service provider.

Commissioner Stephanie Maddens said she was frustrated to see Frontier and Spectrum signing up neighborhood homeowners associations to long-term contracts. She said she would urge those HOA leaders to wait and see before making any lasting decisions.

That won’t be the end of it, Troller added.

“They’re going to come at us full steam, eventually,” he said.

WIth the final report, Troller said he wanted to see not only the quantifiable aspects of the business plan spelled out, but also the intangible benefits like making Lakeland more tech-friendly, and with greater access to today’s broadband-intensive media.

And he said he will share the experiences of other municipalities that have built public internet service providers.

“We’re not reinventing the wheel here,” he said, adding “We’re not the only ones. It’s not something new, and we’re, in my opinion, a decade behind.”

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