Minutes after city commissioners approved a 20-year partnership today with Summit Broadband of Orlando to provide high-speed Internet service to Lakeland residents and businesses, the CEO of the company told reporters the company should be ready to serve its first local customers within four months.
Kevin Coyne said it’s too early to say what Summit services will cost consumers. “I hate to say a number because we haven’t done the pricing analysis, but I can tell you that when you look at your current service provider, my guess is that it is going to be less than that one.”
For most residents between I-4 and the Polk Parkway, the only current residential provider is Charter Communications’ cable-based Spectrum Internet. Residents of some suburban neighborhoods also are served by Frontier’s FiberOptic network, and Frontier has posted yard signs in central Lakeland saying service is coming.
City commissioners voted 5-1 today to approve a contract that will allow Summit to build on the city’s 350 miles of fiber optic cables to provide high-speed Internet, video and phone services.
Commissioner Mike Musick voted against the contract, saying he was uneasy with locking the city into a 20-year commitment and that he feels the partnership would give Summit an unfair advantage over competitors. Commissioner Sara Roberts McCarley did not attend today’s meeting.
The deal found at least one high-profile critic in former Commissioner Justin Troller, who had pushed for years for Lakeland to establish a municipal Internet utility. The current commission balked at the estimated $250 million estimate to do so and opted instead for a public-private partnership, resulting in today’s deal.
“Once again we give away Lakeland citizens’ assets away for political expedience,” Troller posted on Facebook this afternoon. He accused the commission of “turning over the city of Lakeland’s fiber infrastructure to the private sector to make millions off of the investment that everyday taxpayers have made for decades. The city settled for peanuts on broadband because it was the easy way out.”
Neither Troller nor any other residents criticized the Summit deal at today’s meeting.
The only resident who spoke about the deal was the Rev. H.B. Holmes, a cable and Internet entrepreneur who has worked with Summit to identify broadband needs in low-income communities.
“Summit has been a great partner in regards to making sure that the urban community, the underserved community’s needs are going to be met,” he said. “Coming right out of the box, we have about 10 minority businesses that we are going to look to scale up that don’t have quality, adequate broadband services.”
Coyne confirmed that the 10 businesses referenced by Holmes are among the first 13 that his company has conferred with about providing broadband services.
Summit plans initially to pass by 20,000 houses in its initial buildout, Coyne said. He estimated that would take 500 route miles of fiber optics and will take 18 months to install.
Coyne told commissioners Summit plans to offer speeds up to 10 gigabytes for both uploading and downloading. They’ll be serving residential, business, hospitality, education and wholesale customers, he said.
Summit already has reserved space in the Cologix data center in Lakeland and has equipment on order, Coyne said.
Commissioner Stephanie Madden, an ardent supporter of broadband expansion, answered Musick’s concern about the length of the contract, saying that the city had to provide a long enough contract to make it worth it for Summit to make a major investment.
The contract obligates Summit to invest at least $20 million in the first five years. Coyne told commissioners during their agenda study session on Friday that Summit’s investors have agreed to investing at least $50 million.
Coyne addressed Musick’s concerns about competition by saying that he fully expects incumbent providers to step up their game in Lakeland as they see Summit begin to erode their market share. Until now, they haven’t had a reason to invest in updated technology, he noted.
Coyne said that the agreement will provide the city with “additional revenue to continue to invest in your community.”
In the first years of the agreement, Summit will pay the city of Lakeland $144,000 per year. As revenues increase, they will switch to paying the city 10 percent of gross revenue on Internet services.
Other highlights of the proposed partnership:
- The city will continue serving its existing nine dark fiber customers, including Lakeland Regional Health; the revenue stream brings in $543,000 a year, officials said.
- Summit will serve all new residential and business customers; that includes current city customers who expand to new facilities, such as Lakeland Regional’s upcoming behavioral health clinic.
- Summit will handle all installation, maintenance, billing and customer service for its customers.
- The city will retain ownership of its fiber network and will continue to maintain the fiber it owns.
- The city will provide up to $100,000 over the life of the contract to “augment” fiber in locations where there are less than six strands that Summit can use.
- Fiber might need to be augmented in places where splices result in speeds slower than 0.30 decibel per kilometer (0.30db/km). Summit can offset those costs against the 10% revenue share but not against the $144,000 annual minimum.
- The city estimates it will spend up to $250,000 per year over the first five years of the contract to support the project. City Manager Shawn Sherrouse said today that is less than the amount the city would spend anyway to maintain its fiber network.
- Summit will contribute at least $20,000 a year during the first 10 years of the contract toward the city’s effort to “bridge the digital divide,” ensuring free or low-cost Internet is extended into underserved communities.
Summit’s 2,700+ route miles of fiber-optics serves homes, businesses, hospitality and wholesale customers, with its largest clusters in metro Orlando, Lake County and the Fort Myers-Naples area. The company has worked on constructing networks for 20 years, Coyne told commissioners.
Summit was acquired last year by Grain Management, a Washington, D.C., private equity firm.