Estes Park studying municipal broadband options

ESTES PARK — Town staffers are studying a plan for high-speed municipal broadband service that an economic-development official called “a potential game-changer for southwest Larimer County.”

The proposal for 1-gigabit Internet for homes and businesses in the Estes Valley and beyond was presented by Glenwood Springs-based NEO Fiber Consulting at a July 28 Town Board of Trustees study session. Of five options presented by NEO, a municipal broadband service being run as a utility was considered the best choice.

“Now it’s up to us to thoroughly research the feasibility of the town establishing a broadband service utility, considering our financial and operational abilities and the best interests of the community’s future,” said Mayor Bill Pinkham in a media release.

Given enough customer interest, the service could be expanded to cover the entire area served by the Estes Park Light and Power Division, which covers the town, plus areas along Colorado Highway 7, U.S. Highways 36 and 34 and areas to the north. Jon Nicholas, president and chief executive of the Estes Park Economic Development Corp., said he’s still trying to grasp the full potential of what that could mean.

“It’s a game changer for us because we can attract year-round businesses that are location-neutral or IT software-development focused,” Nicholas said. “But it’s also a game changer for southwest Larimer County because home-based businesses would have access to 1-gig Internet as well as our hotels and downtown businesses.”

Nicholas said such an offering, combined with the mountainous area’s quality of life, could be a major economic driver — especially combined with the expansion of state “Enterprise Zones” announced last week by the Colorado Economic Development Commission. That panel included Estes Park and the canyons that surround it in its designated list of zones in which businesses can qualify for a wide range of tax credits.

“Essentially, we could add 1-gig Internet to a host of enterprise-zone programs,” Nicholas said.

High-speed broadband could be a lure for tourists as well, Nicholas said.

“Even though this is primarily a fiber-to-home and fiber-to-business service, individual  businesses could offer WiFi to their customers,” Nicholas said. “If you went to your hotel, there could be a direct fiber link to that property. If you have a bigger pipeline into your property, you could potentially have more broadband to share.”

The Town Board instructed staffers to come back with an implementation plan, probably by September, Nicholas said. “The planning document has cost estimates and revenue estimates by neighborhood. They could start with a ‘Phase 1’ on a smaller scale, but if a certain percentage of customers are interested and the full plan were to be implemented, you’d have high-speed broadband as part of a municipal utility stretching from Allenspark to Glen Haven.”

Glen Haven, northeast of the town along Devils Gulch Road, was especially hard hit by the floods of September 2013 and has been slow to recover.

The draft business plan NEO presented to the town would provide a service offering competitive broadband Internet speed and cost to business and residential customers, sustainable funding obtained entirely through user fees, an approximate 10- to 12-year debt retirement of about $30 million of infrastructure build-out costs, and a source of revenue to the town similar to that provided since 1945 from the Light and Power Division.

NEO estimated that residential customers could have 100 megabits per second of download speed for $50 to $60 a month and 1 gig per second for $70 to $95. It estimated that businesses would pay $150 to $180 a month for 100 Mbps and $300 to $400 per month for 1 gig. All of the potential pricing options would provide services at a small fraction of the current cost of obtaining high-speed Internet in the area now, NEO told the board.

NEO Fiber examined five different models of broadband-service delivery that included municipal involvement. Among them, the only two models deemed financially viable were retail services to businesses and homes, or just service to businesses.

“Based on the financial analysis, this would be a municipal utility,” Nicholas said. “The utility could choose to contract with private contractors for construction, service and support, but it’s not anticipated that this would be a franchise model like an old-fashioned cable-company model.”

The NEO report concluded that it would not be financially attractive for the private sector to provide speed- and cost-competitive broadband, given the Estes Valley’s comparatively small customer base and resulting small potential for a revenue stream, as well as private business’ high initial capital costs, higher-than public-sector borrowing costs and its need for higher return on investment than in the public sector.

In February, 92 percent of Estes Park voters supported removing Colorado’s restrictions on the ability of the town to directly or indirectly provide telecommunications services — echoing a similar vote by Longmont residents a few years back that has led to that city’s installation of its 1-gig “NextLight” service. In a survey conducted by NEO, 93 percent of Estes Valley respondents said they would be interested in accessing a faster, more-reliable broadband network.

NEO representative Diane Kruse recommended that the town not provide television or telephone services, leaving those services to existing private providers.

NEO’s work was funded as part of a $300,000 grant to the town from the federal Economic Development Administration.