Quiet campaign for Longmont muni FTTH bonds

by Steve Blum • , , , , , ,

Cards not on the table yet.

Judging by the lack of ripples in cyberspace, the upcoming $45 million broadband bond election in Longmont, Colorado is not generating a boisterous debate. Granted, it’s difficult to gauge Rocky Mountain political temperatures from beachside in California, but signs of passion, pro or con, are few.

The city’s electric utility published a promotional piece that focuses on the upside of the proposed citywide fiber-to-the-home network and downplays the negatives. The brochure dissembles about the risk to electric ratepayers

Are my electric rates expected to increase to repay this bond?
No. Although the bonds are backed by the LPC enterprise fund in order to obtain favorable interest rates, the electric and broadband operations are independent from an accounting perspective. The broadband feasibility study shows solid financial viability and that broadband revenues will be sufficient to cover all of the costs associated with providing the broadband services.

The city gets “favorable interest rates” because bonds backed only by broadband revenue are reckoned to be particularly risky, with interest rates running two to three times higher. As residents of Provo discovered, broadband bond payments backed by electric service revenue do end up on electric bills when the business model turns sour, even if Google steps in and buys what’s left. The city has kept the details of its feasibility study under wraps, but the summary presentation it released appears to rely on optimistic take rate assumptions with no provision for the inevitable competitive backlash from Comcast and CenturyLink, the same two major incumbents that successfully contested Provo’s system in the marketplace.

A citizens committee was formed to campaign for the ballot measure, but outside of an August meeting and a handful of blog posts, Friends of Fiber hasn’t made much noise (h/t to Community Broadband Networks for the pointer). Its Meetup group has 32 members and one lightly attended follow up meeting and its Facebook page has attracted 81 “likes”. Given that 22,000 votes were cast in 2011 when muni broadband was last on the ballot, that’s not very many. On the other hand, that measure passed by a margin of 61% to 39%, so maybe there’s not a lot of need for rhetorical fireworks.

According to the local paper, “there has been no registered opposition campaign”, but the Friends of Fiber did spot a suspiciously anti-broadband push poll back in September. A CenturyLink rep spoke against the project at a city council meeting, but Comcast hasn’t come out of the shadows.

Election day is next Tuesday, 5 November 2013.