City eyes bonds for broadband build-out

LONGMONT — The estimated $40 million to $50 million needed to build-out Longmont’s high-speed broadband network may come in the form of private-activity bonds.

City officials are researching the bond plan, according to Gabe Santos, Longmont’s elected mayor pro-tem. The Longmont City Council is expected to discuss the private-activity bond research at a meeting slated for Tuesday, May 14.

Such bonds are tax-exempt, and can be used for various development purposes, including housing, utility infrastructure and redevelopment of blighted areas, according to information on the Colorado Department of Local Affairs website. The city could sell the bonds, which are allocated by the federal government.

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The Platte River Power Authority paid $1.1 million to install the 17-mile high-speed broadband network in 1997. Longmont voters in 2011 approved a measure to allow the city to sell broadband services to the community. The city owns and operates the broadband service.

About 40 companies have expressed interest in signing up for the broadband service so far, said Vince Jordan, broadband services manager at Longmont Power and Communications. An estimated 1,300 companies are within 500 feet of the broadband network infrastructure.

Even though it’s often expensive to run fiber-optic cable to buildings that don’t have it, the local economy is expected to benefit widely from companies having access to less expensive, faster broadband service, Jordan said.

“By putting money back into (company) pockets and upgrading levels of service so they operate more efficiently and effectively, we hope that translates into more jobs,” Jordan said. “We’re trying to make every dollar go a long way.”

Longmont Clinic was the first business to sign up for the city’s broadband network service. The medical clinic is transitioning to the Longmont service from its former communications and Internet providers CenturyLink and Blu IP, said Michael Jurey, networking and telecommunications specialist at the clinic.

The clinic expects to pay $389.85 per month for the city service, compared with the combined $2,000 per month it paid to CenturyLink and the Internet service provider, Jurey said.

Longmont Clinic was able to connect to the Longmont broadband network through leftover fiber-optic line, Jurey said. He said he had been following the progress of the city’s broadband service program and called to find out details before hooking up.

“The speed is three times faster,” Jurey said. “It allows the doctors to access their charts and digital imaging faster.”

CenturyLink Inc. (NYSE: CTL) did not respond to specific questions about the Longmont Clinic account. In general, CenturyLink Business “offers a wide array of connectivity and managed services, as well as bundled solutions that are specifically tailored to the needs of individual businesses,” C.J. Powell, a Denver CenturyLink spokeswoman, said in an email. The telecommunications company is based in Monroe, Louisiana.

CenturyLink Business pricing starts at $85 per month for services including business phone, business email, Web design and hosting and 20-megabyte Internet upload and download bandwidth, according to its website.

Blu IP, which has a Longmont phone number, did not return a request for comment.

CenturyLink has invested close to $20 million in its network in Longmont in the past five years, Powell said.

Philadelphia-based Comcast Corp. (Nasdaq: CMCSA) also is a commercial and residential telecommunications provider in Longmont. Comcast offers faster speeds on the commercial side, said Cindy Parsons, a Denver Comcast spokeswoman. Specific commercial pricing can vary, she said.

“Pricing is customized, based on the needs of the business customer,” Parsons said.

Jordan said the city’s potential upload and download speeds and low pricing has businesses “excited.” Larger upload and download bandwidth speeds help make bigger files move more quickly over the Internet — from computer-aided design, or CAD, drawings, and X-rays, to audio files and videos.

For 50-megabyte speeds, Longmont charges $154.95 per month, Jordan said. A 250-megabyte-speed service costs $499 per month.

Because of Longmont Power and Communications’ current limited budget, Jordan has a simple business hook-up strategy. If a business will pay more in monthly fees in two-and-a-half years for the service than it costs to hook them up, the cost is free upfront. If it costs more to hook up a business than it’s estimated that they’ll pay in that time period, the company pays the estimated difference.

“We’re getting them paid back over time,” Jordan said, “so we’re doing everything we can to get them up and running, given the budget constraints.”

In all, a full broadband network build-out someday could be available to 4,000 companies in Longmont, Jordan has said in the past. Monthly fees for the new service may be cheaper than that offered by private companies, because all residents already are electricity customers, and the government department does not need to make a profit as a private company does, Jordan has said.

Before Jordan moved to his current job, he was president of RidgeviewTel LLC, a Longmont-based company that operates telecommunications networks mostly in southern Colorado. Jordan sold his shares in the company to his former partners in spring 2011, he said. RidgeviewTel, in partnership with StarNet LLC, owns and runs the city’s Wi-Fi network.