December 15, 2011

Colorado Utility Defeats Incumbents For Comms Services Rights

More than 100 municipalities in the United States have built or are in the process of building fiber networks. However, in some places, they must engage in legal and regulatory battles with incumbent operators if they want to sell certain kinds of communications services over their networks. (For more, see Utopia Is: Having Fiber To Your Home). Such was the case in Longmont, Colo.

In 1997, the city’s utility, Longmont Power and Communications, built a 18-mile fiber loop (with 144 fibers in the cable) to help manage its communications and to control its infrastructure. "It was a smart grid before the term was even invented," says Director Tom Roiniotis. "The new fiber could also be linked to additional departments within the city that would create a backbone system."

Other city agencies now have connections to the fiber network, which was funded via consumer electric bills, but the municipality ran into a snag when it wanted to offer communications services to private enterprises.

"Back in 1997, the city had the vision that the backbone could be leveraged to help partner with the private sector to accelerate higher speed connectivity," explains Roiniotis. "We did approach incumbent providers, both cable and telco, to see if they had interest. They did not."

Instead, the incumbents backed a 2005 state law preventing municipalities from selling telecommunications services. The Colorado statute does, however, allow cities to take the issue to ballot, allowing voters to decide whether the city should have the right to sell voice, video and data services. In 2009, Longmont did just that, but Comcast and Qwest spent $245,000 to defeat it, says Vince Jordon, co-founder of RidgeviewTel: "It was the most money spent in a single campaign in the city's history."

Two years later and a little wiser, the city again put the issue on the ballot. Although incumbents spent $300,000 in 2011 to oppose passage, voters sided with the city.

Perhaps Comcast and CenturyLink fought this battle so hard because Longmont, just outside of Boulder, is home to several high-tech company campuses, including DigitalGlobe, which takes satellite images for Google; Seagate, a maker of hard drives; Amgen, a biomedical manufacturer; and Intrado, a 911 database company. All of these are good prospects for business services.

Outlining Longmont Power and Communications’ next move, Roiniotis says, "We need to figure out what the next step needs to be in an open-meeting environment with city council. We're going to be talking to a lot of cities. We've always said we're willing to work with the incumbent. We're still open."

-Linda Hardesty