Officials firm up details on broadband Internet initiative

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Officials firm up details on broadband Internet initiative
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By Chris Teale (File photo)

Alexandria’s efforts to improve its broadband Internet and cable television offerings made progress last month, as a budget memo released by city staff revealed more details about the proposal.

The city issued a request for information last summer and received 10 responses, all from companies in the private sector. Officials look likely to replicate what has been done in neighboring jurisdictions and build a fiber optic network to connect city facilities like schools, libraries and recreation centers.

Private companies then would be able to rent use of the fiber infrastructure and provide service to residential and commercial users through a public-private partnership.

“The idea is that we’re doing some of the work for them, hence the private partnership angle of this, so they don’t have to build from scratch,” said Vice Mayor Justin Wilson. “Then they’re going and providing the service directly to consumers.”

The price tag for the project is around $8 million, according to a budget memo sent by city staff on March 23. That number is based on what Michael Stewart, the city’s deputy finance director, said were rough architectural assumptions on how the more than 80 city facilities can be connected, the amount of cable required and the cost to dig up the road and install it.

Stewart said the price could change in the future, depending on how the price of fiber optic cable fluctuates, but that it was arrived at in part by seeing the prices other localities got for the same product.

Funding is slated to come from a variety of sources, including from the city’s capital budget if approved by city council during the ongoing fiscal 2017 budget negotiations. The Federal Communications Commission also awards grants under its E-Rate Modernization Program to connect schools and libraries to broadband, something officials said this project should be in line to receive if all goes according to plan.

“The way the E-Rate program works, they’re looking to give money to school systems and library systems where they can make a really good business case to say, ‘If they own their own fiber rather than leasing it, they’ll save money over time,’” said Stewart. “We think that our project offers a really good business case, so making the argument that this is a great investment of E-Rate funds, we think we’ll be able to make a strong argument.”

The city currently has a contract with Comcast to connect city facilities that Wilson said is set to expire in June. That will be renegotiated and extended, although Wilson and Stewart said the telecommunications giant is looking to get out of the business connecting municipal facilities nationwide.

With publicly owned fiber optics in place, both agreed it will save the city money in the long term through leasing to private companies and not paying rent to Comcast.

“We’re building an asset that then we can partner with the private industry to leverage,” Wilson said. “Private companies are going to come in and say, ‘OK, we want to use the city’s fiber network in this area of the city for us to provide service.’ We’ll negotiate with them and lease it out, like we do today with Comcast, Verizon and others for access to our right-of-way.”

“The price that we’re paying for that lease is anticipated to just continue to rise indefinitely, and at some point they’re going to take it off the table and say they’re not going to lease this anymore,” Stewart said. “To compare that against a debt service payment over the next 10 years or 20 years, however long we want to issue bonds for, we think it’s actually going to save us money to do that.”

City council will consider whether to lend its funding support to the project during its budget add/delete process, which goes on this month. Stewart said he anticipates funding for the next two to three years, with the design phase set to begin this summer if it gets council’s go-ahead.

Stewart said there also will be conversations with utility providers like Washington Gas and Dominion Virginia Power among others, as well as the city’s public works department in an effort to minimize the number of times streets are dug up for construction. He said synchronization hopefully would make the change as undisruptive as possible.

Wilson said the desire for better Internet and television options beyond Comcast is something he hears about often from businesses and residents, and greater competition may foster better service in the city.

“This is something our community is yearning for, and this is a way we can help provide it, and I think in a way that protects the taxpayers at the same time,” he said. “It’s a vintage public-private partnership. We did the RFI and we got some great interest, and I think it started our creative juices flowing here and we were coming upon a model that I think will be very helpful for us.”

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