Developer: Let’s bring broadband into valley
A developer thinks his company could create a broadband network for Grand Junction that would attract enough customers to make it viable.
Grand Junction City Council had a first look at some of the numbers for the first of a three-pronged broadband plan Monday night during a workshop. The city is in a contract with SiFi/Nokia for a preliminary engineering study and Think Agency for a demand survey to determine if building a fiber network in Grand Junction would work.
If built, the $70 million network paid for by certificates of participation taken out by the city could provide high-speed, affordable broadband to nearly 28,000 residential homes and 4,759 businesses — a total 681 miles of construction. Construction could be completed in up to two-and-a-half years. A number of internet service providers could contract to use the infrastructure, which reduces the financial risk to the city, according to Ben Bawtree-Jobson, chief executive officer for SiFi Networks.
“We believe this is a very valuable market,” he said, answering councilors’ questions about the viability of a public-private partnership for broadband.
The work done and under discussion is the first milestone in which councilors have committed. If they choose at their Feb. 1 meeting to continue further with the process, the city will receive more detailed construction plans and financial figures. If not, the city will be out $50,000, according to the agreement. Councilors also can back out after the second milestone is met for a price of up to $200,000 for the work done until that time. If they choose to proceed, the city would enter into negotiations to create a fiber broadband network.
According to the results of the survey, respondents included 491 residential broadband users and 137 business owners. An additional 23 business owners attended events to give more detailed information on their broadband needs.
In the first 12 months of operation, 40 percent to 45 percent of people would switch internet services and an additional 10 percent to 20 percent would switch in the following years.
The numbers are based on monthly broadband pricing of $70 a month for 1-gigabit service; $60-$70 for speeds of 200 megabytes per second; and $50-$60 for broadband speeds of 75 megabytes per second.
Some councilors said they needed at least a few days to digest the numbers and determine if they wanted to move forward. Some were concerned about taking out $70 million in COPs, and questioned the ramifications for not being able to pay off the lease payments. At the end of 30 years, the city would own the infrastructure.
Bawtree-Jobson said he believed the “take-rate” or the numbers of customers who would sign on to use the network would exceed initial, conservative projections in the 60 percent range. That would make the network even more viable for the city and SiFi.
Councilor Rick Taggart said he needed more detailed information to answer constituents’ questions “simply and precisely” when queried about the project.
Councilor Chris Kennedy said he was comfortable with the proposal and is in favor of proceeding to the next milestone. Kennedy is the regional broadband director for Region 10, which is a nonprofit organization helping to bring broadband to six counties in western Colorado.
“I’m very familiar with all the players in the room,” he said. “The initial point of the demand survey is (to answer), “Is there enough demand?’ It seems to me the answer is coming back as a resounding yes.”
The complete broadband feasibility study is on the city’s website at gjcity.org under a link for the Jan.16 meeting